Must read: central banks, Vodafone, bitcoin, Alphabet

GLOBAL MARKETS

It is a mixed market open across Europe with the STOXX 600 modestly lower alongside the FTSE 100, while the DAX is trading flat and the CAC is in the green.

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In the UK, Vodafone Group (LSE:VOD) is among the biggest losers down around 5% after its Q3 trading update revealed a 0.5% decline in UK organic service revenue and operating profit decreased by 52.7% to 0.5 billion euros due to M&A.

Hikma Pharmaceuticals (LSE:HIK) is also suffering after Brookfield Private Capital said it isn’t planning to make an offer for the company.

Software stocks, however, are bouncing back on the FTSE 100 after this week’s brutal sell-off with London Stock Exchange Group (LSE:LSEG) up around 6% at the top of the leaderboard, closely followed by Experian (LSE:EXPN) and RELX (LSE:REL), both up by 3-4% with bargain hunters buying the dip in anticipation of a potential recovery. 

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Focus turns to key interest rate decisions today from the European Central Bank and the Bank of England. Both are anticipated to keep rates unchanged at 2% and 3.75% respectively.

In the US, futures are pointing to a mixed market open with the Nasdaq leading the charge, while the Dow is in the red reversing some of yesterday’s moves when the tech-heavy Nasdaq shed 1.5%. Advanced Micro Devices Inc (NASDAQ:AMD) shares plunged over 17% after its sales outlook disappointed.

Bitcoin continues to suffer, as $70,000 looks like the next key support level to watch. BTC has shed nearly 20% against the US dollar this year alone and is down almost 40% over the last six months, caught up in the broader risk-off mood and geopolitical turmoil that has pushed investors away from riskier assets towards safe havens instead.

ALPHABET

Alphabet Inc Class A (NASDAQ:GOOGL) reported fourth-quarter results which beat on the top and bottom line.

However investors were initially spooked by its high level of spending. Google’s parent company is planning capex this year of between $175 billion (£129 billion) and $185 billion, almost double year-on-year.

Shares recouped initial losses in the post-market session to trade just modestly lower as investors came to the conclusion that its strong results supported its AI spending spree. Its closely watched Cloud division beat the street with sales growth of 48% and Google’s Gemini AI assistant saw monthly users rise by 100 million to an impressive 750 million. However ,YouTube ad revenues came in slightly lighter than forecasts due to tough year-on-year comparables versus Q4 2024 when the US election supercharged spending. 

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Shares have performed very well over the last year, gaining just over 60%, sharply outperforming NVIDIA Corp (NASDAQ:NVDA), Microsoft Corp (NASDAQ:MSFT) and Amazon.com Inc (NASDAQ:AMZN). Alphabet has enjoyed a series of price target upgrades in light of its earnings including from JP Morgan, HSBC, RBC and Piper Sandler.