SUPERNEWS

Macro

Alphabet Hits $2T on Dividend News, Yen Rebounds Amid Global Gains

Tech earnings boost U.S. markets; Yen sees volatility amid global mixed reactions and mild inflation data.

By Bill Bullington

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4/29, 06:58 EDT
S&P 500
iShares 20+ Year Treasury Bond ETF
iShares 7-10 Year Treasury Bond ETF
Alphabet Inc.
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Key Takeaway

  • Alphabet's shares surged 10% on dividend news and a $70 billion buyback, pushing its valuation over $2 trillion.
  • Asian markets rose, with Japan's Nikkei up 0.81% and China's Shanghai Composite gaining 0.79%, amid positive global cues.
  • Yen strengthens significantly against the dollar, hinting at possible Japanese intervention to support the currency.

Tech Earnings and Inflation Data Propel Markets

On Friday, April 26th, U.S. stock markets closed higher, buoyed by robust earnings from tech giants and mild inflation data. Alphabet's announcement of its first dividend and a $70 billion buyback plan sent its shares soaring by 10%, pushing its valuation over the $2 trillion mark. This move underscored the company's transition from an AI laggard to a more aggressive stance, as noted by 11 analysts revising their forecasts post-Q1 results. Meanwhile, the Federal Reserve's key inflation gauge, the PCE price index, reported a rise to 2.7% in March from February's 2.5%, slightly above the anticipated 2.6%. This data, coupled with strong tech sector performance, led six of the eleven main S&P 500 sectors to close higher, particularly communication services, technology, consumer discretionary, and materials.

Global Markets Respond to U.S. Cues

Asian markets opened the week on a positive note, with Japan's Nikkei 225, Australia's S&P/ASX 200, India's Nifty 50, China's Shanghai Composite, and Hong Kong's Hang Seng Index all posting gains. This uptrend was led by sectors such as Electrical/Machinery, IT, and Telecoms Services, reflecting a ripple effect from the U.S. market's positive close. Conversely, European markets showed mixed reactions in early trading, with the European STOXX 50 and Germany's DAX experiencing slight declines, while France's CAC and the U.K.'s FTSE 100 traded higher. Commodities saw varied movements, with crude oil trading lower, while natural gas, gold, silver, and copper posted gains.

Yen's Volatility and Asian Equity Surge

The Japanese yen experienced significant volatility, initially weakening past 160 per dollar before rebounding to 156 amid speculation of intervention by Japan's Ministry of Finance (MOF) to support the currency. This movement occurred during a public holiday in Japan, highlighting the yen's sensitivity to speculative trading. Finance Minister Shunichi Suzuki expressed concern over rapid foreign-exchange movements, indicating a readiness to act against excessive volatility. In contrast, Asian equities, particularly in Greater China, demonstrated strong performance, with the ChiNext index surging almost 4% and the Hang Seng index advancing by 1.3%. These movements underscore the divergence between currency volatility and equity market strength in the region.