A look at the day ahead in U.S. and global markets from Mike

Dolan

A volatile week for Wall Street megacaps looks set to end with a

positive twist as Microsoft ( MSFT ) and Alphabet

earnings wowed the gallery overnight, while the yen plunged anew

in Asia as the Bank of Japan left policy on hold.

After a day in which Meta's outsize spend on

artificial intelligence appear to spook investors and sent both

its stock and the wider tech sector into tailspin, its rivals

appeared to steady the ship overnight.

Google-parent Alphabet announced its first-ever dividend and

a $70 billion stock buyback, sending its stock surging nearly

16% after the bell. Microsoft ( MSFT ) beat estimates for its quarterly

revenue and profit, driven by gains from adoption of artificial

intelligence across its cloud services, and its shares jumped

more than 4% in extended trade.

Snap was another outsize move, with its shares

soaring nearly 30% in Frankfurt after the owner of the photo

messaging app beat expectations for quarterly revenue and user

growth.

It wasn't all sweetness and light, however, and chipmaker

Intel's ( INTC ) shares dived more than 8% after it forecast

second-quarter revenue and profit below market estimates and was

seen to be trailing in the booming market for AI components.

Nevertheless, the upshot for the wider market has seen

Nasdaq futures jump back more than 1% overnight and S&P500

futures were up about 0.8% - with Friday's earnings diary topped

by Big Oil names such as Exxon Mobil and Chevron.

Asian and European bourses also rallied on Friday and the

VIX stock market volatility gauge remained in check near

Thursday's lowest point in about two weeks.

But much of the macro market focus in Asia today has been on

the plummeting and increasingly volatile Japanese yen -

which skidded more than 0.5% to another 34-year low at 156.82

per dollar as the Bank of Japan stood pat on its still-easy

monetary policy.

It swung wildly in London trading hours as traders grew wary

of official action to stem its slide, although no actual

intervention was detected yet and it retained much of the day's

losses.

The Bank of Japan kept interest rates around zero and

highlighted a growing conviction that inflation was on track to

durably hit 2% in coming years, signalling its readiness to hike

borrowing costs later this year.

But the yen dropped amid a lack of clear guidance on the

future rate hike path and the still yawning rate gap between

Japan and the rest of the developed world.

With the dollar actually softer against other major

currencies after Thursday's surprising miss in the headline U.S.

gross domestic product reading, yen weakness against the dollar

was pervasive elsewhere too.

The U.S. economy grew at its slowest pace in nearly two

years in Q1 but the number was partly depressed by a surge in

imports and this sign of solid domestic demand and an

acceleration in inflation gauges for the quarter reinforced

expectations that the Federal Reserve would not cut interest

rates before September.

Nevertheless, Treasury yields backed off recent

highs on Friday as traders awaited the release of Fed's favored

PCE inflation gauge for March later in the day.

Although the headline rate of PCE inflation is expected to

have ticked up a notch to 2.6% last month, the core rate is

forecast to have slipped to 2.7%.

In dealmaking, Anglo American rejected rival miner

BHP Group's ( BHP ) 31.1 billion pound ($39 billion) takeover

proposal on Friday, saying the bid significantly undervalued the

London-listed miner and its future prospects.

Key diary items that may provide direction to U.S. markets later

on Friday:

* US March PCE inflation reading, Dallas Fed trimmed mean PCE,

University of Michigan's final April sentiment index

* US corporate earnings: Exxon Mobil, Chevron, AbbVie, Colgate

Palmolive, T Rowe Price, Aon, HCA Healthcare, Roper

Technologies, Charter Communications, Centene, Ball,

LyondellBasell, Phillips 66

* German Chancellor Olaf Scholz hosts NATO Secretary-General

Jens Stoltenberg in Berlin in preparation for the alliance's

75th anniversary

(By Mike Dolan, editing by Gareth Jones

[email protected])