Geoffrey Smith 

Investing.com — The first quarter earnings season is at its peak after Google parent Alphabet reports and Microsoft (NASDAQ.) updates. Before that, updates will come from a variety of thousans such as GE, GM, and Pepsi. China’s central bank placed a ceiling on the Yuan and has (sort of) stopped the rot from Chinese stock market stocks, at least for the moment. American Petroleum Institute issues weekly product and crude estimates. Elon Musk’s acquisition of Twitter continues to cause shockwaves in both Washington and the markets. What you need to know about the financial markets for Wednesday, April 26th. 

1. Microsoft and Alphabet kick-off Big Tech’s 1Q

Big Tech’s earnings season kicks off (if you exclude Tesla (NASDAQ:)) with results from Google parent Alphabet and Microsoft after the closing bell.

Azure, the company’s Cloud-hosting division, is expected to continue its steady growth in earnings for quarter two. The more intriguing release will likely be the, whose model is based on advertising and will be examined for signs of inflation. Alphabet stock fell nearly 20% since its peak in late 2013, despite a strong revenue growth.

Investors are also likely to scan the company’s comments for any read-across to its YouTube service from Netflix’s problems with market saturation, which may lead to the streaming giant competing with it for advertising.

2. PBOC promises additional support. Yuan stabilizes after the FX reserve ratio is cut

The Chinese central bank put a floor under the yuan and – up to a point, the local stock market – by saying it was looking at further ways to support the economy. The yuan, which has been falling at its fastest rate since the PBoC’s devaluation in 2015, ticked up against the dollar in response. Following Monday’s 18-month-high, the dollar lost 0.1%.

The central bank said it will “increase prudent monetary policy support to the real economy, especially for industries and small businesses hit hard by the pandemic,” a reference to the massive demand shock reverberating through Shanghai and other cities due to extensive lockdowns.

On Monday, the PBoC had also cut the reserve requirement it imposes on banks’ holdings of foreign currencies, increasing the availability of dollars on the local market.

3. As the bounce wears off, stocks will open lower; earnings flood underway

U.S. stocks are set to open lower later, unable to build on Monday’s solid bounce, which was driven by perceptions that the repricing of interest rate expectations had gone far enough.

They were at 6:20 AM ET (1120 GMT) and had fallen 109 points or 0.3% each, respectively.

It’s a huge day for quarterly earnings, with United Parcel Service (NYSE) Pepsico (NASDAQ:) Already out with higher-than-expected results General Electric Raytheon (NYSE), Raytheon(NYSE:), Warner Bros Discovery, (NASDAQ) and DR Horton are due prior to the bell. Visa (NYSE), Mondelez [NASDAQ:], General Motors (“NYSE”), Texas Instruments (“NASDAQ:”) and Chipotle will report after the close.

The data calendar meanwhile is dominated by ,  the Conference Board’s survey, and house prices for March, while a will also provide interest in the debt markets.

4. Twitter Aftershocks

Elon Musk’s agreement to buy Twitter continues to reverberate through both financial markets and Washington. The deal has been welcomed by conservative voices, who see the move as a welcome counterbalance to a liberal-dominated media landscape, while others (including the Washington Post, without any identifiable trace of irony) have railed against the purchase of an important mouthpiece by the world’s richest man.

Twitter founder Jack Dorsey said the move would “take Twitter away from Wall Street” and restore it to its original function.

Musk, however, relied on Wall Street heavily to raise the cash for his acquisition. Morgan Stanley (NYSE:) MS has organized some $12.5 billion in financing for the deal, secured against Musk’s holding in Tesla. Twitter stock trades 4% less than the agreed $54.20 purchase price.

5. Oil consolidates around $100; API estimates due

Overnight, crude oil prices settled at $100 per barrel. The market is still concerned about Covid developments occurring in China. Beijing districts have begun a week of mass testing, while Shanghai’s lockdown still continues.

It was a 0.2% drop in futures at $98.39/barrel at 6:37 AM ET. Futures rose 0.1% to $102.25/barrel at the same time, thanks to the increase of Libyan output.

As usual, at 4:30pm the American Petroleum Institute reports its weekly estimate for U.S. crude- and fuel inventories.