Today is Wednesday, January 26, 2022.
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Microsoft Saved by Good Guidance
Shares of Microsoft (Nasdaq: MSFT) originally fell 4.16% in after-hours trading on Tuesday because of negative earnings, but finished up 1.22% due to good guidance.
Financials: Microsoft reported earnings per share of $2.48 and revenue of $51.7 billion; both were better than what was expected.
In the Cloud: Revenue for Microsoft’s intelligent cloud business increased 26%. Likewise, revenue for Azure and other cloud services increased 46%.
The Problem: While Microsoft beat expectations in nearly every category, many investors were not satisfied with the rate of growth and expected more in the numbers.
Guidance: Later on Tuesday, Microsoft announced in the earnings call that it projects quarterly revenue guidance between $48.5 billion to $49.3 billion, which was better than expected. This lifted the stock price up.
Final Thoughts: Microsoft is up 24% in the past year. It is one of the strongest big tech stocks, but some investors may choose to avoid big tech during this volatile year.
Notable Earnings Today: Intel (Nasdaq: INTC), Tesla (Nasdaq: TSLA), Boeing (NYSE: BA), AT&T (NYSE: T), Freeport-McMoRan (NYSE: FCX), Lam Research (Nasdaq: LRCX), Abbott Laboratories (NYSE: ABT), Levi Strauss (NYSE: LEVI), Nasdaq (Nasdaq: NDAQ), ServiceNow (NYSE: NOW), Anthem (NYSE: ANTM), Lending Club (NYSE: LC), Progressive (NYSE: PGR), Seagate Technology (Nasdaq: STX), Kimberly-Clark (NYSE: KMB), Las Vegas Sands (NYSE: LVS), Corning (NYSE: GLW), Xilinx (Nasdaq: XLNX), Knight-Swift Transportation (NYSE: KNX), Qualtrics (Nasdaq: XM), Aspen Technology (Nasdaq: AZPN), Automatic Data Processing (Nasdaq: ADP), CACI International (NYSE: CACI), Crown Castle International (NYSE: CCI), Duke Realty (NYSE: DRE), Edwards Lifesciences (NYSE: EW), Fanuc (OTCMKTS: FANUY), General Dynamics (NYSE: GD), Hess (NYSE: HES), Meritage Homes (NYSE: MTH), Norfolk Southern (NYSE: NSC), NovaGold Resources (NYSEAMERICAN: NG), Packaging Corp. of America (NYSE: PKG), Plexus (Nasdaq: PLXS), PTC (Nasdaq: PTC), Raymond James Financial (NYSE: RJF), Silicon Motion Technology (Nasdaq: SIMO), SLM (Nasdaq: SLM), Teradyne (Nasdaq: TER), United Rentals (NYSE: URI), Vertex Pharmaceuticals (Nasdaq: VRTX), Whirlpool (NYSE: WHR), Silgan Containers (Nasdaq: SLGN).
Notable IPOs Today: Eagle Point Credit Company Inc. (NYSE: ECCV), Special Opportunities Fund, Inc. (NYSE: SPE), BIP Bermuda Holdings I Limited (NYSE: BIPI), Global X Disruptive Materials ETF (Nasdaq: DMAT), Satellogic Inc. Class A Ordinary Shares (Nasdaq: SATL), Murphy Canyon Acquisition Corp. Unit (Nasdaq: MURFU).
Notable Equity Crowdfunding Campaigns Ending Today: DeoBioSciences (NetCapital), Everyday Contacts (Wefunder), Centric Wear (StartEngine).
Notable Economic Events Today: Goods trade balance (8:30 a.m. ET), Retail inventories (8:30 a.m. ET), New home sales (10:00 a.m. ET), Crude oil inventories (10:30 a.m. ET), FOMC Statement (2:00 p.m. ET), FOMC press conference (2:30 p.m. ET).
Dogecoin Pops on Musk Tweet About McDonald’s
The price of Dogecoin jumped 7% on Tuesday after Elon Musk tweeted, “I will eat a happy meal on tv if McDonald's accepts Dogecoin.”
Background: Musk has been promoting Dogecoin for some time, and is at least partially responsible for the rise of Dogecoin in the past year.
Response: McDonald’s (NYSE: MCD) did not respond to the tweet on Tuesday, but the stock did drop 1.16%.
Final Thoughts: There are several businesses that already accept Dogecoin as payment, such as the Dallas Mavericks and airBaltic. If McDonald’s accepted Dogecoin, the price of the crypto would likely go up.
Early 2022 Stock Market Correction, Explained
An early 2022 sell-off in the stock market has investors on edge.
Numbers: After the first three weeks of January, the Dow Jones Industrial Average is down 6.25%, the S&P 500 is down 9.18%, and the Nasdaq Composite is down 14.49%. In particular, technology stocks are down big.
Catalyst: This dip in stock prices, especially in tech, might be due to the likelihood of the U.S. Federal Reserve hiking interest rates several times in 2022.
Big Picture: A dip in consumer spending coupled with inflation is also impacting the broader market.
Final Thoughts: Investors should consider a portfolio adjustment if they want to have a positive 2022.
Trends to Watch
No Surprises Here: Stocks Trading on Fumes Probably Aren't Keeping the Fed (Bloomberg)
Sign of the Times: Logitech turns in strong quarter, but CEO says supply chain woes still held back sales (CNBC)
No Place Like Home: Spring is in the ... housing market? Home prices are surging early this year. Here's why. (USA Today)
Good List: 4 Financial Apps That Help Individual Investors Get Started in 2022 (The Wall Street Journal)
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