Worse-than-expected earnings from technology giants Amazon and Twitter sent the Nasdaq down last night.

US equities eased earlier gains and ended lower, mainly dragged down by technology shares. The Nasdaq lost 40 points – or 0.63% - while the Dow Jones ended 0.39% higher at 21,796 points – a record high. 

Amazon’s profits fell to a seven-quarter low, and it forecast a further drop in profits next quarter due to heavy investment in warehouses and other infrastructure spending. The company’s earnings per share (EPS) fell to 40 cents, indicating a 71% miss compared to the street forecast of $1.42. 

Twitter posted decent earnings and revenue growth in the second quarter. Growth in average monthly users, however, remained flat, indicating weak future growth prospects in its earnings. Twitter’s share price tumbled over 14% overnight.

The unfavourable sentiment has spread over to Asian markets this morning, with most equity futures indicating a lower opening. Investors are waiting for US GDP number this evening, which are likely to significantly impact the equity and currency markets. The US dollar index rebounded last night as the euro retraced from its three-year high due to profit-taking activities. If tonight’s GDP data shows strength in the US economy, the dollar could be supported, and set for a rebound. 

In Singapore, the UOB Group reported a 5.5% increase in net profit YoY, in line with market expectations. This comes after an impressive 22% jump in earnings from OCBC bank a day ago. Singapore Airlines (SIA) announced an 8.6% YoY drop in its net profits last quarter, mainly due to the absence of a one-off gain recorded in the same period last year. The Singapore Exchange (SGX) reported a 10.9% jump in its quarterly earnings, mainly from growth in its derivatives business. Earnings were in line with market expectations. 

Technical analysis:

US NDAQ 100 - Cash

  • SuperTrend (10,2) sloped upwards
  • Broken down below the 10-Day Simple Moving Average and 61.8% Fibonacci extension level
  • Momentum indicator MACD is likely to form a bearish crossover if the market continues to head south


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