Amazon (AMZN), Microsoft (MSFT), Alphabet (GOOG), and Intel (INTC) have all reported their March quarter results since yesterday's close. Each of those companies topped analysts' average earnings expectation, yet the S&P futures are up a mere point while the Nasdaq 100 futures are down four points.
What's the hold up? Well, not all of the reports were pristine enough to work market participants into a bullish fervor, especially after the market -- and the technology sector in particular -- has already had a big run ahead of those reports.
Typically, one would expect these heavyweights to carry the day. They might still, but for the time being, they are competing with other forces, including the weight of high expectations, and acknowledgment from President Trump that the U.S. could have a "major conflict" with North Korea if diplomacy doesn't work, and the not-so-surprising chatter that the administration's tax reform plan looks poised to encounter pushback in Congress.
In other words, there is a political shadow being cast over the earnings reports and the stock market again that has tempered the bullish enthusiasm seen earlier in the week.
There will certainly be an effort to pin today's relatively lackluster stance on the weak first quarter GDP report. Resist buying that idea.
The market was well aware of the lowly projections for first quarter GDP ahead of the report and that didn't deter several averages from hitting new record highs this week.
Those lowly projections, featuring a meager 0.2% growth forecast from the Atlanta Fed's GDPNow model, were not far off base. According to the advance estimate from the BEA, first quarter GDP increased at a seasonally adjusted annual rate of 0.7% (Briefing.com consensus +1.1%) while the GDP Price Index increased 2.3% (Briefing.com consensus +2.1%).
The main drag on growth in the first quarter was the change in private inventories, which subtracted 0.93 percentage points. A downturn in government spending subtracted 0.30 percentage points.
The key takeaway from the report, however, was that the growth in personal consumption expenditures was decidedly weak, increasing just 0.3%, which was the weakest growth in more than seven years.
Fortunately, there was some notable strength in nonresidential and residential fixed investment. Combined those two areas contributed 1.62 percentage points to first quarter growth. Net exports added less than 0.1 percentage points.
Real final sales, which exclude the change in private inventories, were up 1.6%. That was actually an acceleration from the 1.1% growth rate seen in the fourth quarter, yet it still isn't all that strong.
Separately, the first quarter Employment Cost Index showed compensation costs increased 0.8% (Briefing.com consensus +0.6%) on the heels of a 0.5% increase for the fourth quarter. The first quarter uptick was paced by a 0.8% increase in wages and salaries and a 0.7% increase in benefits. Compensation costs for private industry workers increased 2.3% year-over-year.
In terms of focal points today, the Employment Cost Index will understandably take a backseat to the GDP report and the major earnings reports, which have also included results from ExxonMobil (XOM), Starbucks (SBUX), Chevron (CVX), and Western Digital (WDC) to name a few more.
For the full rundown, be sure to visit Briefing.com's Earnings Results page.
In the meantime, know that the result of the news bombardment since yesterday's close is a market trading relatively flat at the moment.