Alphabet, Google’s parent company, announced a profit miss, which will set a negative tone for the rest of the technology sector. The company’s investment in high-margin cloud solutions and offerings is taking a toll on profits as expenses jumped 35%. Google falls behind Amazon, which has seen solid growth coming from the cloud space through Amazon AWS. The news that Google acquired Fitbit, a hardware maker, is also putting pressure on the stock although the fact that Google is moving away from search is considered to be a sensible portfolio management move.
Boris Johnson persevering
UK PM Boris Johnson will attempt to win MPs’ confidence for the third time today after losing yesterday’s vote. GBP/USD has remained at nearly the same level since last week ahead of today’s vote, which will require a simple majority. Mr Johnson is trying to hold a snap election in December and has won support of Jeremy Corbyn, the leader of the opposing Labour Party.
U.S. interest rates
The U.S. Federal Reserve is to announce the interest rate this week. Investors will be eager to assess the Fed’s thinking in determining rates. Given the performance of equities in recent weeks and a record unemployment rate, the equity markets appear to be pricing in positive news, similar to bonds.
Risk of crypto credit blowup
The rapid expansion of crypto credit is showing all the classic signs of a pending blow-up: undeveloped lending management, increased risks and too much money following too few borrowers. Finance observers say the real risk that cryptocurrency faces is highly leveraged crypto-based derivatives managed by unexperienced retail investors.