Intel’s Disappointing First-Quarter Forecast Damages Market Sentiment
Tech giant Intel (NASDAQ:INTC) released a disappointing first-quarter revenue forecast after the market close on Thursday. This has weighed on market sentiment as the semiconductor manufacturer has been one of the best performing companies over the last year, with its stock up 75% during that period. Intel expects to post revenue in its current three-month period of $12.2 billion to $13.2 billion, well below Wall Street projections of $14.5 billion.
According to LSEG data cited by Reuters, Intel’s stock fell 10% on Friday.
Underlying U.S. Price Growth Rises, Aiding Potential Inflation Cooling
Despite the impact of Intel’s forecast, any losses in the stock market were tempered by data showing that underlying U.S. price growth rose by 0.2% in December. Many economists believe this rate, if sustained, could help cool inflation back down to the Federal Reserve’s target. The “core” personal consumption expenditures price index, which excludes volatile items like food and fuel, increased by 2.9% compared to the year-ago period. However, this was a deceleration from 3.2% in November and slower than estimates of 3.0%.
Coupled with Thursday’s solid gross domestic product figures, the data could influence the Federal Reserve’s approach to potentially lowering interest rates from more than two-decade highs.
Earnings Season Updates: T-Mobile, American Express, Visa, and Western Digital
The earnings season continued on Friday, with T-Mobile US (NASDAQ:TMUS) reporting that its stock was down 0.5% after missing its profit target for the fourth quarter. However, the wireless carrier forecasted monthly bill-paying phone subscriber growth for the year above estimates, anticipating consumer interest driven by its wide 5G coverage and promotional offers.
American Express (NYSE:AXP) stock rose 2% after the credit card giant beat full-year profit expectations, despite raising its loan loss provisions in preparation for a potential increase in loan defaults.
In contrast, Visa (NYSE:V) stock fell 1.8% after offering tepid second-quarter sales guidance. The world’s largest payments processor forecasted an uptick in net revenue during its current period ranging from the “upper mid- to high single-digit,” implying a slowdown from the 11% increase posted in the corresponding period in 2023.
Meanwhile, Western Digital (NASDAQ:WDC) stock fell over 4% after the data-storage products maker reported a wider-than-expected quarterly adjusted loss due to structural changes implemented in its flash and HDD businesses.
Oil Prices Fall, But Weekly Gains Expected on U.S. Economic Growth and Chinese Stimulus
Oil prices fell on Friday, retracing some of the previous session’s strong gains, but are still on track for significant weekly gains. By 09:35 ET, U.S. crude futures traded 0.5% lower at $76.97 a barrel, while the Brent contract dropped 0.3% to $82.22 a barrel, after reaching the highest levels since December during the previous session.
The strong weekly gains are attributed to healthy U.S. economic growth and signs of Chinese stimulus. Data released on Thursday showed that the U.S. economy expanded more quickly than expected in the fourth quarter, reaffirming economic resilience from the world’s largest crude consumer. Additionally, China, the world’s second-largest oil consumer, announced deep cuts to bank reserves earlier in the week to spur economic growth, while oil supply disruptions in the Red Sea continued.
Gold Futures Rise, Euro Strengthens
Gold futures rose 0.3% to $2,023.65/oz, while EUR/USD traded 0.2% higher at 1.0871.
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