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Stock market wobbled by banking woes

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Equity markets were broadly lower on fresh concerns from First Republic Bank. However, positive earnings from Alphabet and Microsoft helped uplift major after-hours indices.

Investors continued to navigate a tough trading environment as major economic data and more earnings were rolling in.

Alphabet – Technology earnings gave a sense of relief

Shares of Google-parent Alphabet saw good results and announced a further $70 billion in stock buybacks. The CFO also mentioned the headwinds looming in the economic environment, and that uncertainty still hangs over the market.

Microsoft- Upbeat result boosts sentiment

Shares of Microsoft are moving much higher in the after hour as it hints on strong IT spending as the technology earnings season set in full scale.

Azure, the cloud unit, saw revenue jump 31%, which is better than expected. The PC unit saw record sales of $13.3 billion, much higher than the $12.3 billion expectation. This could also be a shiny sign of a PC refresh cycle that makes it good for chip companies.

First Republic – Fresh Concerns on deposits

Shares had plummeted aggressively with concerns about its plunging deposits after it announced its latest earnings result. As the turmoil had largely subsided for regional banks, First Republic pressed new wounds and could shake confidence in the sector.

We have some options on the counter, which may further dent our return for April given that there is news of possible seizure by FDIC as the company is said to have been struggling to find buyers for its large asset balance to boost its balance sheet.

With the news looming, we saw a deep dive in major indices. We have closed major options at a significant loss to protect our capital. As hindsight, with good results from the tech, some indices have recovered, but our losses have been booked. While it is a painful loss and frustrating, it is a learning lesson because had the tech earnings, which we cannot predict to be bad, things could be worst.

Probably, I will write a post on this.

What’s on the menu today?

From 8.30 pm onwards. we will have multiple data roaming in. High on the list is the Core Durable Goods Order.

It is 26 April, Wednesday 9 am in Singapore and 9 pm in New York. What a challenging week of trading thus far. We are now in preservation mode to protect our positions from eroding all of our effort for April.

We hope it has been a profitable April for you!