Newscasts - US Markets Briefing: Big tech's AI splurge worries investors
31/10/2024 19:00
Click the following link to watch video: https://share.newscasts.refinitiv.com/link?entryId=1_bl4e3wmh&referenceId=1_bl4e3wmh&pageId=Newscasts Source: 'Reuters - Business videos' Description: Megacaps led Wall Street down on Thursday, on investor worries about whether the massive capital expenditure on AI announced by tech giants Meta and Microsoft will pay off. Short Link: https://refini.tv/4f6dyV9 Video Transcript: Big Tech's AI splurge worries investors. Welcome to your US Markets Briefing. I'm Elena Casas. Mega-cap stocks have pushed the NASDAQ down this Friday by as much as 2.3% earlier, as investors digest just how much the Big Tech firms plan to spend on rolling out AI. Shares of Meta dropped 3% and Microsoft fell 6%, despite both companies beating profit estimates when they reported last night. Both announced massive capital spending, Microsoft rose to $20 billion, while Meta is expected to dedicate even more and that has investors nervous. I do think that what's happening, especially with Meta, is investors are focused now immensely on the huge amount of capital expenditures that Meta has claimed, they're going to spend on these build outs upwards of $40 billion this year. An amazing number and I think investors are starting to now wonder well, what will we get from that $40 billion, how is that going to translate directly into your earnings improvements? And I think that's what we're worried about today. Tomorrow focus may return to the US economy with October's crucial jobs report. Its forecast to come in at just 113,000 jobs gained less than half the previous months, as two hurricanes and the strike at Boeing hit employment. Ahead of that, Labor Department data showed new jobless claims fell to 216,000 last week. Well, other data showed the Fed's preferred measure of inflation rising in line with forecasts and consumer spending stronger-than-expected, Treasury yields edged up on those numbers. On the results front, earnings are out from Exxon and Chevron on Friday, like other oil giants, they've already flagged lower crude prices and narrower refining margins. European rivals BP and TotalEnergies both posted steep drops in profit this week. Investors will be listening out for an update on the two US companies tussle over assets in Guyana. Well, today oil prices ticked up by about $0.50 a barrel at last check. That's on reports OPEC+ is set to delay an increase in output that's planned for December, a decision on that could come as early as next week. And the VIX Index, Wall Street's fear gauge, touched its highest since early September, as investors get nervous about the coming election with only two trading days to go. Polls still show the vote is too close to call with Vice President Kamala Harris gaining ground with women but losing male voters to Donald Trump. And that's your US Markets Briefing