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Microsoft and Alphabet outperform, PacWest deposits stabilize, UBS voices concern over lending slowdown. — Liza TetleyIn a boost for big tec [View in browser]( [Bloomberg]( Microsoft and Alphabet outperform, PacWest deposits stabilize, UBS voices concern over lending slowdown. — [Liza Tetley]( Tech beats In a boost for big tech, Microsoft and Google parent Alphabet rose in premarket trading after posting earnings that topped projections. [Microsoft’s results showed resilient corporate cloud-computing demand](, and the company gave an upbeat outlook for AI services. “We are committed to leading the AI platform wave and making the investments to support it,” Chief Financial Officer Amy Hood said. [Alphabet also added to optimism on the sector](, with its cloud unit turning a profit for the first time and its search business weathering the economic conditions well. Regional banks Midsized US banks rallied in premarket after PacWest Bancorp said deposits stabilized toward the end of March and “[rebounded nicely](” in April, easing worries over the lender’s health after earlier banking turmoil. First Republic Bank also paced gains, after yesterday’s sharp slump fueled by its worse-than-forecast drop in deposits. The lender is considering [divesting]($50 billion to $100 billion of assets, in an attempt to reduce the mismatch between its assets and liabilities, according to people familiar with the matter. Lending slowdown UBS strategists struck a cautious note on credit conditions, saying that [the pace of lending following March’s banking crisis looks “concerning.”]( The strategists led by Matthew Mish said bank commercial and industrial loan growth is nearing levels associated with a recession, while corporate bond issuance also looks set to drop. They expect spreads across investment-grade notes, high-yield bonds and leveraged loans to widen further this year, and suggest that traders prioritize non-cyclical investment-grade debt and high-yield utilities. The Swiss bank’s economists see a US recession in the third quarter. Futures bounce US stock futures are looking better today, with contracts on the tech-heavy Nasdaq up 1.2% as at 5:37 a.m. in New York on the back of those positive big tech results. S&P 500 futures are up 0.4%. Treasury yields are lower, with a measure of the dollar weakening on recession fears. Gold prices rise as traders look for havens, while most other metals decline. Oil prices are ticking back up after yesterday’s fall. Coming up… It’s a quiet day for economic data, with just US wholesale inventories for durable goods for March coming up at 2:30 p.m. But it’s busy on the corporate earnings front, with Meta, Boeing, CME Group, EQT, Hilton, Roku, Thermo Fisher, American Tower and Spirit Airlines all reporting. What we’ve been reading Here’s what caught our eye over the past 24 hours: - [UK companies looking to list abroad](weigh on stock market - Russia trained troops from [Belarus on tactical nuclear warheads]( - A closer look at [Elon Musk’s bid to dominate global car making]( - China’s [positive earnings season]( seen reigniting the country’s stocks - [Nomura’s Frankfurt offices]( were raided as part of a tax scandal probe - The [world’s largest crypto exchange is facing mounting legal pressure](bbg://news/stories/RTPNGQTP3SHS) - Half of American mothers have[no retirement savingsÂ]( And finally, here’s what Joe’s interested in this morning Futures are up this morning, in part because last night's tech earnings came in so strong. As of the moment that I'm typing this, Microsoft shares are up over 7.5%. But everyone's gonna be talking tech. So instead, let's go back to the theme of the week: Consumer-facing companies, pricing power, and inflation. On Monday I wrote about [Proctor & Gamble](. Then yesterday [I wrote about Coca-Cola](. Since then we've gotten a few more big ones, including Pepsi, which just delivered another phenomenal quarter from a pricing perspective. All around the world, volumes for drinks and snacks have kind of gone nowhere, while prices have jumped nicely. [Here's the key table from the press release](: I highlighted the global numbers, but also just look up at Frito-Lay North America numbers. 16% revenue growth. No volume growth! Remarkable stuff. But from an inflation standpoint, maybe we're once again seeing signs that we're past the peak of this approach. Here is Pepsi CEO Ramon Laguarta on yesterday's call: "We’re seeing a deceleration of inflation, not a reduction of cost, but a deceleration of inflation. And we think that with the pricing that we’ve taken already in most of our business around the world, that should be sufficient. Obviously, there are some markets, highly inflationary markets around the world where we might have to take additional pricing. If you think about Argentina, Turkey, Egypt those kind of markets where the currencies are suffering, but the majority of our pricing is already done." That being said, it doesn't make sense to look for some rapid deceleration. Here's CFO Hugh Johnston from the call: "From a revenue standpoint, I think generally speaking, you see the consumer continuing to buy our products. Elasticities are still holding up quite well across most of the globe. And then despite the fact that we’re taking pricing driven by the inflation that we’re facing into." While not consumer facing per se, it's worth noting that like other companies, Pepsi clearly seems to be seeing easing labor markets and supply chains. From Laguarta again: "...operationally, the business is better. We’re seeing better labor availability, better flow of materials, suppliers are obviously getting better as well." Meanwhile, just quickly, we also got earnings from Chipotle and McDonald's yesterday. Both companies are doing extremely well, though with some subtle differences. Chipotle specifically says that since the end of Q1, it continues to see strength across customer segments. Here's CEO Brian Niccol: "One, the higher income consumer continued to come and hardly came in a little bit faster pace from a frequency standpoint and then we did see some I'll call it recovery in the lower-income consumer, still not all the way back to where it was call it a year ago, but an improvement from where it was over the last six months. So, we've seen nice improvements across all of our income cohorts and we continue to see great strength in the higher income." On the other hand, [McDonald's is saying that it's seeing some resistance to price increases]( going on that leads it to believe a mild recession may be in the offing. Meanwhile, here's a datapoint from CEO Chris Kempczinski that the Fed probably wishes it had on its daily dashboard: Follow Bloomberg's Joe Weisenthal on Twitter [@TheStalwart](. Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. Before it’s here, it’s on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can’t find anywhere else. [Learn more](. Want to sponsor this newsletter? [Get in touch here](. 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