Amazon Eruption , China Repression

Amazon finishes a breathtaking earnings season for Internet platform companies, but the EU takes the edge off the euphoria with a new antitrust ruling against Apple. Chinese regulators are also abolishing on their homegrown Internet giants. The Eurozone plunged back into recession in the first quarter as expected, and stocks and oil are consolidating after exhausting their near-term upside potential. Personal income and spending data and consumer sentiment numbers are due later from the University of Michigan.

Amazon rounded off a banner earnings season for Internet platform companies, posting a net profit of over $8 billion for the first quarter, more than triple the previous year’s result. Familiar drivers were at play: revenue from Cloud hosting rose 32%, while the company’s advertising business grew by nearly 70%, albeit from a lower base.  Amazon stock was up 2.4% at a new record high in premarket trading,

Chinese regulators expanded their crackdown on the country’s biggest Internet companies, imposing tough new rules aimed notably at their financial services arms. Companies including JD com, Meituan, Xioami and Didi Chuxing were ordered to set up financial holding companies that will be subjected to clear capital requirements, reducing their profitability. he move broadly mimics the action taken recently against Alibaba affiliate Ant Group, and also follows a $1.6 billion fine levied this week on Tencent for past antitrust violations.

U.S. stock markets are set to open lower later, retreating from record highs on profit-taking at the end of another strong month.

While earnings season has largely lived up to sky-high expectations, pockets of weakness such as Twitter and Pinterest along with the awareness of high valuations are making it harder to advance any further, at least in the near term.

Official data confirmed that the Eurozone economy slipped back into recession over the turn of the year, with first-quarter gross domestic product data showing a decline of 0.6%, leaving GDP down 1.8% on the year. The figures, which were stamped by the effects of prolonged lockdowns and a slow start to the vaccination campaign, were still marginally better than expected.

The Eurozone’s inflation rate accelerated to 1.6% in April, from 1.3% in March, as the familiar pattern of base effects pushed the headline inflation rate closer to the ECB’s medium-term target. Nonetheless, excluding food and energy, prices rose only 0.8%, in line with the bank’s assessment of weak underlying dynamics.