🧯Stocks wobbled with mixed corporate earnings🔫

Major indices are down as optimism that breathes life into the financial markets is shifting their wind given the stormy clouds forming with the latest earnings results from the significant corporate that signalled a downpour is still happening on the economy.

For one, we saw Nasdaq rise sharply in the after-hour after the announcement of Microsoft results but swing deeply in red after poor guidance was issued. Likewise, the PMI data for S&P’purchasers’ managers’ index came in at 46.8, which is higher than the 46.0 forecasts, with a better reading from the service index of 46.6 points to a higher possibility of a soft landing, which helps to cushion off some risk-off sentiment.

Nonetheless, with Microsoft’s weaker guidance, indices may start to show cracks in the rally unless new positive corporate earnings arrive.

💻Microsoft – A mellow earnings that are ok, but guidance is rocky💸

The tech giant posted a slightly better-than-expected result, mainly powered by its cloud computing business. Yet, this piece of result is shadowed by weak guidance for the March quarter,

There is a clear sign of weakness seen in the PC software business. Azure public cloud business is the highlight hit estimates, which is a relief, but the business outlook on IT spending continues to be a nervous point for investors.

At one point of the after-hour trading, it rose by 5% only to give up the gains during the guidance call. The weaker guidance is expected to roll the market when it opens. As we had made some positions after hearing the good news (totally forget about the guidance call, lol, so learn from our mistakes), we might book some losses on that.

More earnings will be released before the market opens, and let’s see the wave of sentiment again.

It is 25 January 2023, Wednesday, 10.05 am in Singapore and 9.05 pm in New York. It is a pretty data-light day, and all focus will be on corporate earnings. See you when the market opens.