WS #13094
The dominant signal in this window is the after-hours earnings reports from Amazon and Apple, following a strong regular session led by Microsoft's 15% surge. Amazon crushed estimates with $5.75 EPS vs $1.82 consensus, driven by AWS revenue growth of 37% (fastest in 18 quarters) and AI/chips businesses each exceeding $25B annualized run rates. However, Amazon's free cash flow turned sharply negative (-$7.6B trailing 12 months) due to massive capex, now guided to $220B for 2026. Apple beat on EPS ($2.02 vs $1.89) and revenue ($109.4B vs $108.65B) but fell 8% after hours on weak services revenue ($30.74B vs $31.22B) and soft Q4 guidance of 9-11% revenue growth (below 12% consensus), citing supply constraints and memory chip shortages. The macro backdrop includes US GDP slowing to 1.5% Q2, Fed holding rates with 3 dissents favoring hikes, and yen surging 2.6% on suspected BOJ intervention. Geopolitically, Trump announced a deal for Hamas disarmament and Gaza transfer to a new Palestinian government, a potential de-escalation signal for Middle East tensions, though US strikes on Iran continue and a Russian missile crossed into Poland. The tech rally narrative is ESCALATING with MSFT's massive move, but AAPL's guidance miss creates a MAG7 carve-out signal that contradicts the broader tech optimism.
Topics
Key developments
- Amazon Q2 EPS $5.75 crushes $1.82 consensus, AWS growth accelerates to 37%
- Apple beats Q3 but falls 8% after hours on services miss and weak guidance
- Microsoft surges 15%+ on strong Azure growth and AI capex reassurance
- Trump announces Hamas disarmament deal, Gaza to be governed by new Palestinian government
- US Q2 GDP slows to 1.5% as trade deficit widens, but domestic demand remains strong
- Yen surges 2.6% on suspected BOJ intervention, dollar weakens broadly
- Russian missile enters Polish airspace, NATO scrambles jets
- Fed holds rates with 3 dissents, long-term yields spike to 19-year highs