Strengthening PMI figures in the US and Europe have done little to help boost sentiment, as traders await the key Microsoft earnings report, says Joshua Mahony, senior market analyst at online trading platform IG.
Equities lose traction despite some encouraging PMI figures
“Equities find themselves in the red once again, as investors struggle to gauge whether todays set of mixed PMI surveys provide grounds for optimism or pessimism. Eurozone services brought the one notable area of outperformance, as the sector unexpectedly rose back into expansion territory. However, despite improved readings across both manufacturing and services sectors in the US, it is a case of good news is bad news as it eases pressure on the Fed to consider pivoting anytime soon. ”
Microsoft earnings due, with big tech expected to see demand suffer
“Microsoft earnings provide the big corporate story of the day, with investors and traders alike expecting to see the giant lose traction on both earnings and profit-front. The decision to slash 10,000 jobs does highlight a bloated business which had grown its workforce by a whopping 77,000 since the beginning of the pandemic (+47%). Today’s Microsoft earnings report is expected to highlight the need to bring costs under control, as rising interest rates and recession fears bring concerns that demand will collapse over the course of 2023. ”
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.