Sunday , April 18 2021

Microsoft breaks the threshold of $ 1 trillion



Major movements

Microsoft Corporation (MSFT) vaulted in an elite group of stocks today, as it has crossed the $ 1 trillion market-cap threshold today. Only Apple Inc. (AAPL) and Amazon.com, Inc. (AMZN) have previously achieved this feat.


To set how impressive this is in perspective, if you were to compare MSFT's market limit to the country's annual gross domestic product (GDP), it would rank 17th in the world – just behind Indonesia and just before the Netherlands survey of the International Monetary Fund in 2018).


Microsoft cleared this monumental hurdle by jumping 3.31% on Thursday after scattering Wall Street's revenue and revenue estimates when it released its numbers on Wednesday night after the market closed. The company calculated revenue estimates for $ 740 million and revenue estimates of $ 0.14 per share – coming from $ 30.6 billion and $ 1.14 per share, respectively.


During the company's conference call, management further excited investors by saying that it expects a double-digit increase in revenues and operating revenues for the fiscal year – an impressive success for a company that has the size.


Perhaps the most exciting thing about this naked move is that it shows that in certain segments of investment such as technology, like the economy, there is still a very positive impetus, which could keep the market moving higher during 2019.


Nasdaq Composite and S & P 500

There was Microsoft and Facebook, Inc. (FB) – who rose 5.85% today after winning non-GAAP earnings estimates of $ 0.27 per share – was the only S & P 500 component reporting revenue over the past 24 hours , most likely, new all-time highs.


Unfortunately, for those looking for an index to break higher, the S & P 500 was frail with negative surprises from 3M Company (MMM), United Parcel Service, Inc. (UPS) and Altria Group, Inc. (MO). 3M fell 12.95% on Thursday, after missing revenue of $ 0.27 per share, the UPS fell 8.13% after missing estimates for $ 0.04 a share, and Altria dropped 6.03% after the missing revenue for $ 0.01 per share. Maybe tomorrow will be a happy day for the S & P 500 when it can finally break higher.


Luckily for the Nasdaq Composite, did not have to worry about 3M, UPS and Altria, as they are all listed on the NYSE. This left the index of technological difficulties to run higher. Nasdaq reached a new intraday high of 8,151.8 before closing at 8,118.7.










Risk indicators – Extension of problems

The energy sector faces some internal divergences between independent oil exploration companies and petroleum refining companies, as cracking continues to increase. The crack spreads trace the difference between the cost of entering the process of refining oil – crude oil – and the output of the process – gasoline.


When the spread of the cracks becomes narrower, it shows that the cost of crude oil becomes more expensive compared to the price of gasoline. Conversely, when crack breakage becomes widespread, it shows that the price of crude oil decreases compared to the price of gasoline.


At present, the spread of cracks becomes wider. This is great news for oil refiners such as Valero Energy Corporation (VLO), HollyFrontier Corporation (HFC) and Marathon Petroleum Corporation (MPC) – as this means that their profit margins will spread, as they pay a relatively lower price for crude oil they buy and can charge a relatively higher price for gasoline they sell.


The wider spread of cracks is not a great news for independent oil research companies – such as Apache Corporation (APA), Devon Energy Corporation (DVN) and Pioneer Natural Resources Company (PXD) – because this means that the product they sell, crude oil, does not command such a high price.


If this divergence in performance continues as the disruption spreads, the energy sector can continue to lag behind in the technology and financial sector.










Bottom line – potential everywhere

The S & P 500 is still consolidating just below its highest level, but the index has much potential to break higher. It looks like it could use the right combination of earnings announcements – more earnings will disappear than misses – to push it through the edge.










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