European markets look set to end the week on a softer note after a weak Asia session and some late profit taking in the tech sector heading into the US close, which saw both the S&P500 and Nasdaq close lower on the day.

We’ve seen a veritable earnings bonanza from the tech sector over the past week or so with Netflix, Alphabet and Facebook surprising to the upside, so hopes were high that Amazon would follow suit.

Amazon earnings overnight saw profits decline 77% on the quarter and this prompted a late sell off in the share price in after-hours trading. Despite this, the share price remains well above $1,000 a share and Amazon’s revenues did rise 25% to $38bn. The reason for the decline in profits was down to its investment in its Prime Video division as it takes on Netflix for new subscribers, as these two leave Apple behind in the TV and video content stakes.

Investors need to be wise to the fact that adding subscriber numbers and market share requires new content and that costs money, and between them Amazon and Netflix are spending over $10bn between them over the next year or so, which means they need to start pricing that in.

The earnings bonanza continued today with Barclay’s latest results for Q2, which were disappointing on the headline numbers as a result of one off costs, due to the disposal of its Africa business, and weak investment banking revenues Like Lloyds yesterday the bank also set aside further sums in respect of PPI.

Stripping out the one-off items the results showed that revenues in its investment bank were lower to the tune of 10%, and profits were even lower, however the underlying business numbers were still slightly better than analyst forecasts, once all the incidentals had been stripped out.

BT Group is also lower as the company looks to get to grips with the problems in its Italian business. The underlying business saw revenues in line with forecasts, but due to a £225m charge in respect of the problems relating to its Italian business, profits in Q1 fell to £418m. On the plus side its broadband and mobile businesses saw subscribers increase.

On the plus side British Airways owner International Consolidated Airlines saw an increase in profits of 14%, and said that it expects the rest of the year to be similarly positive, a somewhat more upbeat picture than we’ve heard from its budget airline peers of Easyjet and Ryanair.

It would appear that the company has managed to put to one side the problems that saw a massive power outage hurt its brand earlier this year. The company has set aside £60m in respect of compensation claims with respect to this incident. While pre-tax profits rose 28.6% to €706m it is still obvious that some parts of its long haul fleet could do with significant updating.

US markets look set to open lower with Amazon likely to open on the back foot after a disappointing reaction in after-hours trading to its latest quarterly update.

Starbucks also disappointed as the coffee giant fell short on profits, prompting a similar sell off after hours. The company announced that it would be closing all its Teavana stores. It would appear that American shoppers are either losing their appetite for tea, or it could simply be that fewer shoppers are visiting shopping malls due to the growth of on-line shopping. It is likely that it is the latter that is the problem as opposed to the former.

Chip maker Intel fared a little better with a beat on the headline number as well as revenues.

CMC Markets is an execution only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.