Amazon’s turn to slide

It’s just another day, another Big Tech earnings announcement, another set of revenue beats, another pledge to invest massively in AI and infrastructure — and another negative market reaction.

This time, it was Amazon’s turn to get refused by investors. The company’s revenue grew 14% year-over-year — better than expected — with AWS revenue up 24%, reaching about $35.6 billion for the quarter - the fastest growth in about 13 quarters. Profit came a touch below expectations. But what triggered the 11% slump in after-hours trading was the pledge of a huge $200 billion spending plan, roughly $50 billion more than expected, which will weigh on profits.

As such, Amazon joins the list of Big Tech companies that don’t get the approval to spend this much. The market says no — this is too much spending.

At the open today, Amazon could be pushed below the 200-DMA, and maybe below the $200-per-share level. Microsoft is down almost 30% since its November peak; investors particularly disliked slower growth in its cloud unit amid massive capital being thrown at AI tools. Meta is down more than 12% despite revealing that its AI efforts are leading to higher revenue. In vain, investors dislike the huge investment plans here as well.

Google is the only company that stands out in this crowd. Its stock fell as much as 7% in the hours following its earnings announcement — the selloff was also triggered by a massive $175–185 billion spending target for 2026. But investors rushed to buy the dip, and the stock closed the session just 0.60% lower than it started. That was an amazing performance. Likely, this was due to the 48% growth in Google Cloud, seen as early proof that their TPU chips will make a difference — potentially diverting revenue from chip sector heavyweights — and that Gemini will grow market share with big and PAID partnerships, starting with Apple.

Nasdaq futures are down again this morning. The US dollar is licking its wounds after a slump in Asia. Silver rebounded off the $64-per-ounce mark, almost a 50% slump since last Thursday’s peak at $121 — remember, that was just a week ago. Gold retreated to $4’655 before rebounding, and Bitcoin — oh dear — is getting hammered along with tech stocks, dropping to levels many thought impossible. It briefly plunged below $60’000 per coin overnight, well below the $70’000 support many experts cited — the average cost of mining Bitcoin. That theory, that Bitcoin’s price wouldn’t fall below mining costs, is being tested in this selloff. There’s no convincing answer to what the bottom might be. It will be determined by appetite for this highly speculative asset with limited use cases. Michael Burry warns this selloff could lead to a “death spiral,” though he is known for dramatic statements — and he likely closed his hedge fund before this tech selloff began. Realistically, this selloff reminds investors that Bitcoin’s multi-year one-sided trend is over. Bitcoin is volatile and risky, and institutional investors may get cold feet. Technical levels suggest the coin is in a bearish consolidation zone, under pressure below the $80–82k range.

Elsewhere, the US dollar was surprisingly better bid yesterday despite ugly job numbers. US companies announced the highest number of job cuts for any January since the post-GFC recession of 2009, according to Challenger. More than 180’000 jobs were lost — a 118% increase from a year earlier — and hiring intentions fell 13%, the weakest in the company’s 17-year record. Amazon, UPS and Dow are responsible for almost half of the job cuts — AI is a factor, but not the main driver.

In all cases, this week’s incomplete jobs figures continue to point in the same direction: the US jobs market is weakening. It would be interesting to see the official jobs data — but alas, a partial government shutdown prevents us from getting another perspective on the darkening picture. What’s sure, however, is that the US labour market is calling for Federal Reserve (Fed) support, if inflation allows. The next CPI update is due next Friday.

Elsewhere in FX, the EURUSD failed to reverse losses and could not hold above the 1.18 mark, despite the European Central Bank (ECB) leaving rates unchanged yesterday. Lagarde said the euro area economy remains ‘resilient’ and the outlook broadly balanced. She offered no guidance, downplayed the euro’s latest strength, but warned that tariff risks persist.

Across the Channel, the Bank of England (BoE) also maintained rates untouched, though the vote was very tight, prompting traders to ramp up bets that the BoE will cut rates — 60% probability in March, 90% in April. Cable fell and is now testing a major Fibonacci support, the 38.2% retracement of the November–January rise, which could determine whether the positive trend continues or the pair returns to the bearish consolidation zone. At this point, only waning appetite could keep Cable afloat.

Last but not least, Japan heads into a snap election this Sunday. The USDJPY is stabilizing just below 157. Stakes are high for Sanae Takaichi: she is willing to consolidate her political power and clear the way for aggressive fiscal spending — partly in defence and tech — to boost growth. A victory would likely boost equities (especially defence and tech), weigh on JGBs and weaken the yen. But here’s the catch: any move toward 160 sharply raises the risk of FX intervention, which could quickly kill the rally.

If Takaichi loses, however, the story flips. Fiscal ambitions stall, equities will likely lose momentum, JGBs catch a bid and the yen may strengthen, with USDJPY potentially drifting back toward the low 150s.