Zuckerberg lowers the stock markets | Finansavisen

At four o’clock on Thursday, the Meta price was down by 13 percent, after the Facebook owner announced disappointing earnings prospects and unexpectedly large investments. However, both the top and bottom lines surprised positively in the first quarter, and the Zuckerberg share is still up by 140 percent in a year.

Meta makes up about 3 percent of the S&P 500 and 5 percent of the Nasdaq 100, so the dramatic decline put a damper on these indexes as well. The two were respectively 1.4 and 1.8 per cent lower at four o’clock, after three consecutive days of gains.

It didn’t help that another IT giant, IBM, plunged 9 percent. Here, turnover disappointed, with an annual growth of a miserable 1.5 per cent. The company has only managed to meet top line expectations in two of the past five quarters. Both the software and consulting operations did worse than expected, while the drop in income in the infrastructure division was slightly less than expected.

Ford fared better, with a price drop of around 1 percent. Like its rival GM, the American car manufacturer reported unexpectedly strong earnings in the first quarter. Again, the reason was skyrocketing demand for trucks and other vehicles for business, while the electric car business slowed down. Ford somehow missed analysts’ revenue estimates.

Furthermore, the new GDP figures came from the USA, where economic activity increased by an annualized 1.6 per cent from the fourth to the first quarter. Growth was the weakest since the second quarter of 2022 and down from 3.4 percent in the previous three-month period. In advance, the economists had envisaged a level of around 2.5 per cent, and the outcome was worse than even the lowest estimate.

At the same time, inflation, measured by the “GDP deflator”, was an annualized 3.1 percent — 0.1 percentage point more than the consensus estimate and almost twice as high as in the fourth quarter. Evil tongues immediately spoke of “stagflation”, and the yield on ten-year US government bonds rose to 4.74 percent, the most in almost six months.