Having rallied six days in a row, it should not come as a surprise that US equity markets took a pause while investors took stock to decide whether current valuations deserve another push higher. With the S&P 500 trading at 18 times earnings, it pays to be prudent when it comes to stock selection. Some tech stocks in particular are in focus, as after having soared on projected potential, valuations are starting to play catch up as competition rises. One example is Netflix. Having soared earlier this week on better-than-expected earnings and projected potential, it fell more than 5% as Amazon nailed a deal to stream HBO while AT&T ventures into online streaming with the Chernin Group. AT&T lost 3.8% despite Q1 earnings beating estimates, as subscription revenues weighed. The Nasdaq led declines with losses of 0.9% while the S&P500 and the Dow lost 0.2% and 0.1% respectively. The tech-laden index may reverse some of those losses tonight, however, with upbeat earnings from Apple and Facebook after the bell. Apple shares jumped 8% in extended trading after earnings defied expectations to come in tops in the first quarter of the year. Profits soared as much as 7% from a year ago, with EPS of $11.62 versus $10.17 expected. With the triple announcements of an increased share buyback, an increase in quarterly dividends as well as a stock spilt, the plethora of positives should help push the stock up the leader board in the Nasdaq tonight. Facebook also came in ahead of expectations, reporting a 72% rise in sales in Q1. Profits trebled to $642m from a year ago as mobile advertising revenues soared. The social media stock rose some 4% in extended trading, though small in comparison to its usual double-digit rally following an earnings announcement. Tonight we will be monitoring earnings out of Microsoft, Amazon, Caterpillar and GM to name a few. In the currency space, the dollar traded mixed against majors, falling against the yen and euro while rising against the pound and the Aussie. Following yesterday’s miss on inflation, the Aussie dollar sold off deeply on the view that the RBA is in no rush to hike rates. Slower manufacturing activity in China further escalated the decline, pushing the AUD/USD below the realms of 0.93. With the currency hovering around current support levels of 0.928, the risk remains on the downside unless the USD side of things starts to weaken. Meanwhile, the Kiwi soared half a cent against the dollar after the RBNZ hiked rates by 0.25% this morning. While the rate hike was widely expected and should have been priced in, markets were more startled by the outright concern over high inflation levels and the need to tighten as long as they remain elevated. In the commodity space, crude oil slipped after crude inventories hit a record high, and with China continuing to show signs of a slow-down. Brent finds a support, meanwhile, near the 109 levels, from the ongoing crisis in Ukraine.

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