This week in the markets
- The Fed left interest rates unchanged, which seemed to upset some investors.
- Google’s stock fell nearly 7.5%, which was its worst one-day stock drop since 2012.
- Apple reported earnings of $58 billion, much of which came from online services.
The Fed continues to leave rates unchanged
On Wednesday, the Federal Reserve announced that it plans to continue to hold interest rates steady at a target range of 2.25% to 2.5%. In recent weeks, President Trump has urged the US Central Bank to lower interest rates in order to boost the economy. The Fed announced that although growth in household spending and business investments have slowed, unemployment has remained low — which is one indication of a strong economy. The Fed raised rates four times last year but has indicated that it does not foresee rate hikes at all this year. The Central Bank aims to keep inflation steady and encourage full employment by toggling the discount rate, which is the minimum interest rate set by the Fed for lending to banks.
Investors didn’t seem happy about the Fed’s plans to keep interest rates steady, as major market indexes were down slightly on Thursday. The S&P 500 was down 0.21%, Nasdaq dropped 0.16%, the Dow Jones Industrial Average (DJIA) decreased 0.46% at Thursday’s close. However, all three market indexes were still positive for the month of April.
Google had its worst stock drop since 2012
Google’s parent company Alphabet Inc. had its worst day since 2012 on Tuesday, when the company’s stock fell nearly 7.5%. The reason for the sudden drop may have been Google’s first-quarter earnings report, which reported missing revenue estimates. The internet giant blamed product changes in ads for the shortfall but didn’t give much more explanation. Hey, Google. You good?
Apple reports positive earnings from an unexpected source
Apple released its earnings report this week which were above analysts’ expectations. The company reported $58 billion in quarterly profits. However, much of sales revenue came from an unexpected source: Online services and wearables. In fact, sales for the iPhone were down 17.33% year-over-year. Apple’s CEO Tim Cook announced that its services revenue, which includes subscriptions like Apple Music and iCloud, and Apple’s Wearables business, which includes products like AirPods and the Apple Watch, are vital to the company’s growth. Apple is no longer a one-trick iPony!
And now for your weekly Lionomics wrap-up. ?
Lionomics: Finance made easy
This week in Lionomics, we discussed the differences between three of the major market indexes: The S&P 500, the Nasdaq, and the DJIA. Find out why not all market indexes are created equally. ?
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