The firm forecast second-quarter revenue of some $28 billion, almost $2 billion above analysts’ estimates, and it announced a 10-for-1 stock split. Its shares, which have tripled over the past year, jumped above $1,000 in extended trade and added another $140 billion in stock market value.
The news has been enough to lift S&P500 futures out of Wednesday’s mild funk and they were up about 0.5% ahead of Thursday’s bell. Nasdaq 100 futures are up almost 1%.
And the ongoing rise of Wall Street to ever higher records has seen implied equity volatility crater, with the VIX “fear index” plumbing its lowest since November 2019 on Thursday at just 11.54.
Perhaps even more remarkable given the stubborn Fed noises, equivalent Treasury market volatility gauges are also subsiding and the MOVE index fell to its lowest since February 2022 – before the Fed tightening campaign started.
That may be partly due to the fact that U.S. central bank appears to prepared to leave interest rates unchanged for several more months. Indeed some private sector bankers, such as Goldman Sachs boss David Solomon, now see no rate cut this year.
While there were signs from its latest meeting minutes on Wednesday that some hawkish policymakers were willing to lift rates again if necessary, not least due to a loosening of financial conditions evident in surging stocks, the impact was muted as the meeting was before the softer April inflation data.
As a result U.S. Treasury yields ticked up only modestly, with rates markets now homing in on weekly jobless numbers and May business surveys later on Thursday for guidance.
Softness in housing data on Wednesday also kept up hopes for a cooling economy, and futures markets still retain 40 basis points of Fed easing for 2024 – significantly more than the 34 bps money markets now seen from the Bank of England.
