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Morning Brief: Facebook shares surge 12% after smashing expectations

Thursday, January 31, 2019

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WHAT TO WATCH

It’s another busy day for corporate earnings. The biggest reports that investors will be paying attention to include industrial giant General Electric (GE) before the bell and e-commerce behemoth Amazon (AMZN) after the market close.

Amazon is expected to report earnings of $7.88 per share on $71.92 billion in revenue, according to analysts polled by Bloomberg.

General Electric stock has had a tough couple of years, but 2019 is off to a good start. Shares have rallied 20% in the past month, and as the company gears up for earnings on Thursday, Wall Street has made clear that it will be focused on what new CEO Larry Culp will say about the struggling areas of GE’s business.

Analysts polled by Bloomberg are expecting GE to report earnings of 22 cents per share on $32.33 billion in revenue during Q4.

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TOP NEWS

The logo for Facebook appears on screens at the Nasdaq MarketSite in New York's Times Square. (AP Photo/Richard Drew, File)

Facebook beats Q4 expectations, stock soars: Facebook (FB) reported better-than-expected Q4 results on Wednesday evening, beating on both the top and bottom lines. Revenue during Q4 came in above estimates at $16.91 billion. Consensus among analysts was for about $16.39 billion in revenue. [Yahoo Finance]

Tesla earnings miss expectations, shares slip: Tesla (TSLA) posted lower-than-expected earnings in the fiscal fourth quarter but eked out a second consecutive quarter of profitability, underscoring its ongoing struggles to sell affordable electric vehicles at scale. CEO Elon Musk also announced that Tesla CFO Deepak Ahuja is retiring, and will be replaced by Zach Kirkhorn, previously vice president of finance.[Yahoo Finance]

Fed holds rates, updates balance sheet policy: The Federal Reserve on Wednesday made two key changes that signal to investors an overhaul in how the central bank thinks about monetary policy and the economy. The Fed released a new statement that further outlines its view of the role that reducing the size of its balance sheet plays in setting monetary policy. It also maintained the target range for its benchmark interest rate at 2.25%-2.5%, an anticipated pause. [Yahoo Finance]

Microsoft cloud business booms 20%: Microsoft (MSFT) on Wednesday reported revenue of $32.5 billion, which was in line with expectations. Earnings per share came in at $1.08 per share versus analysts’ estimates of $1.09 per share. Microsoft’s cloud business, the cornerstone of the company’s pivot to cloud computing, raked in $9.4 billion of revenue in the quarter, up 20%. [Yahoo Finance]

U.S., China hold first day of trade talks: U.S. President Donald Trump will meet China’s top trade negotiator in the Oval Office on Thursday for high-level talks, with little indication that Beijing will bend to American demands to deepen economic reforms. [Bloomberg]

Deutsche Bank sees merger by mid-year if all else fails: Deutsche Bank AG’s top ranks are bracing for a potential government-brokered merger with rival Commerzbank AG by mid-year as they run out of time to turn Germany’s largest bank around. [Bloomberg]

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