Today’s most important news for investors is discussed in this article. The Dow Jones Industrial Average decreased by 375 points, while the S&P 500 and Nasdaq Composite fell by 0.5% and 0.6%, respectively. This came after lower-than-expected U.S. gross domestic product growth of 1.6% in Q1 combined with a faster pace of inflation at 3.4%. These figures have raised concerns about the possibility of stagflation, which is slow economic expansion accompanied by high prices. Despite this setback, major indices are still expected to end the week positively, and traders will be keeping an eye out for Friday’s PCE reading.
Alphabet has reassured investors regarding its core advertising business and investment in artificial intelligence (AI). Alphabet reported Q1 earnings exceeding market predictions due largely to a 20% increase in YouTube ad sales. The company also announced plans to pay shareholders their first-ever quarterly dividend of $0.20 per share, along with repurchasing an additional $70 billion worth of shares. Shares increased by roughly 12% following the announcement.
Microsoft’s Q3 earnings report exceeded expectations for both revenue and profitability; however, its guidance on future revenues was weaker than anticipated due to a shortage in data center infrastructure necessary for AI deployment. The company stated that it would be spending more again during this quarter to tackle these supply issues further.
According to sources cited by CNBC’s Alex Sherman, Paramount Global and Skydance Media are progressing toward finalizing their merger deal sometime in May 2023. Under the proposed arrangement, David Ellison would assume leadership as CEO of Paramount Global while Jeff Shell takes on a president role. However, negotiations regarding CBS’ renewal agreement with Charter Communications remain an unresolved issue that could impact valuation estimates for this potential merger deal (Disclosure: Comcast is NBCUniversal and CNBC’s parent company).
CEO Bob Jordan suggested that Southwest Airlines might potentially consider altering its long-standing single-class, open seating policy. However, the airline has not yet made any final decisions regarding this matter as of now (Disclosure: Ryan Green, Chief Commercial Officer at Southwest Airlines mentioned in this article is also a member of CNBC’s Financial Advisor Council). Analysts have previously questioned whether Southwest would introduce premium seating or additional fees to match its competitors. Nonetheless, the airline has stated that it will not be charging for checked bags as people choose Southwest due to their no-bag fee policy.
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