People walk past the New York Stock Exchange (NYSE) on Wall Street on July 12, 2022 in New York City.
Angela Weiss | AFP | Getty Images
Here are the most important news items that investors need to start their trading day:
1. A lot more earnings to go
Markets have kept their heads above water so far this month, even as economic data point to a potential recession and corporate earnings have been mixed, at best. On the latter point, more than 70 companies listed on the S&P 500 have reported quarterly results this earnings season, with about two thirds of them performing better than expected, according to Refinitiv. So there’s a while to go yet, and investors will zoom in especially on the guidance companies offer, as economic concerns grow. On the earnings docket Wednesday: BoeingAT&TTeslaIBMLevi Strausslive markets updates here.
2. Microsoft’s slowdown
Microsoft signage is seen at the company’s headquarters in Redmond, Washington, January 18, 2023.
Matt Mills Mcknight | Reuters
Microsoftslowest revenue growth since 2016, and its outlook indicated that bad trends would continue. The tech giant said Tuesday it expects revenue growth to continue to slow down. Microsoft’s Windows and Office businesses experienced a dropoff at the end of last year, and more declines are likely coming as the personal computer market shrinks again. New business growth for the company’s Azure cloud unit also softened in December, which doesn’t bode well for the early part of this year. “In our commercial business we expect business trends that we saw at the end of December to continue into Q3,” finance chief Amy Hood said.
3. Why inflation is sticky
NEW YORK, NEW YORK – JANUARY 12: Eggs are seen on a shelf at Pioneer Supermarkets on January 12, 2023 in the Flatbush neighborhood of Brooklyn borough in New York City. An outbreak of avian influenza, also known as the bird flu, has driven a shortage of eggs as well as an increase in prices in stores throughout some parts of the country. (Photo by Michael M. Santiago/Getty Images)
Michael M. Santiago | Getty Images News | Getty Images
Inflation is still high – the consumer price index for December was up 6.5% vs a year earlier – but it’s slowing down. That’s good news for consumers, but only up to a point. Many companies have raised prices, but just because costs come down, it doesn’t mean they’re going to lower prices across the board, either, as CNBC’s Melissa Repko and Amelia Lucas explain. One reason: Many companies have locked in long-term contracts that set prices months in advance for goods and shipping. Also, companies that were squeezed by higher costs earlier are going to want to see their profit margins improve. “We don’t take something that was $1, move it to $1.10 and then a year or two later, move it to $1,” Utz Brands
4. Tesla’s impact on car prices
New Model Y electric vehicles are parked in the early morning in a parking lot at Terminal 5 of the capital’s Berlin-Brandenburg Airport. Due to space constraints on the site from the new plant of the U.S. electric car manufacturer Tesla in Gr?nheide, are several thousand new electric vehicles in the parking lots at the airport BER.
(L to R) Rupert Murdoch, executive chairman of News Corp and chairman of Fox News, and Lachlan Murdoch, co-chairman of 21st Century Fox, walk together as they arrive on the third day of the annual Allen & Company Sun Valley Conference, July 13, 2017 in Sun Valley, Idaho.
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