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Microsoft (MSFT)

Daily Market Analysis - FRIDAY JULY 07, 2023Key News: USA - Average Hourly Earnings (MoM) (Jun) USA - Nonfarm Payrolls (Jun) USA - Unemployment Rate (Jun) During Thursday's trading session, the Dow Jones Industrial Average recorded a decline as robust job market data sparked expectations of further interest rate hikes by the Federal Reserve. This development subsequently led to a surge in Treasury yields, which raised concerns among market participants. The Dow Jones Industrial Average experienced a notable decrease of 1.1%, resulting in a loss of 366 points. Similarly, the Nasdaq and the S&P 500 also faced declines of 0.8% and 0.8% respectively. NASDAQ, SPX, and DJI indices daily charts Amidst the broader market decline, Microsoft Corporation (NASDAQ: MSFT) bucked the trend and achieved a gain of nearly 1% driven by optimism surrounding its advancements in artificial intelligence (AI). Morgan Stanley, a prominent financial institution, expressed confidence in Microsoft's position within the software industry, particularly in relation to the projected $90 billion growth opportunity in generative AI by fiscal 2025. In light of this positive outlook, Morgan Stanley increased its price target on Microsoft from $355 to $415, indicating a favorable investment potential for the company. Microsoft stock daily chart Despite the launch of its Twitter competitor app called Threads and the announcement by Meta CEO Mark Zuckerberg that it had garnered over 30 million sign-ups since its recent introduction, Meta (formerly known as Facebook) faced a reversal of its early-day gains. The company's stock failed to maintain its upward momentum, and the gains dissipated as the trading session progressed. The market response to Threads and Meta's overall performance suggests that investors and traders may have reacted differently to the news, leading to the subsequent decline in the stock price. Meta Platforms stock daily chart In the Eurozone, inflation expectations for the medium term experienced a decrease in May. The gauge measuring the 12-month expectation dipped from 4.1% to 3.9%. Despite this decline, the long-term (three-year) inflation expectations, which hold greater significance for the European Central Bank (ECB), remained unchanged at 2.5%. This level is notably higher than the ECB's target inflation rate of 2%. The latest flash core Consumer Price Index (CPI) estimates for June further strengthen the argument for proponents of tighter monetary policies within the ECB. These estimates provide substantial justification for those who advocate for a more stringent approach to monetary policy, given that inflationary pressures persist in the Eurozone. The ECB, as the central bank responsible for maintaining price stability, closely monitors inflation expectations and aims to keep them in line with its target. The fact that long-term inflation expectations remain above the ECB's target suggests that there may be a need for increased vigilance and potential policy adjustments to curb inflationary pressures. The divergence between medium-term and long-term inflation expectations underscores the complexity of managing inflationary dynamics in the Eurozone. The ECB will need to carefully assess economic data, including CPI estimates, to make informed decisions regarding monetary policy and strike a balance between supporting economic growth and maintaining price stability. EUR/USD daily chart Today, the economic calendar in the Eurozone is relatively light, implying that the movement of the EUR/USD exchange rate will primarily be influenced by the market's reaction to data releases from the United States. The market's response to US data is of particular significance, as it has a notable impact on shaping the direction of the EUR/USD exchange rate. Positive data releases from the US could strengthen the US Dollar and potentially lead to a decline in the EUR/USD pair, while weaker-than-expected data could exert downward pressure on the US Dollar, potentially favoring an upward movement in the EUR/USD pair. Additionally, the market remains highly sensitive to price-related developments. In this context, there is ongoing concern regarding the Bank of England's aggressive tightening expectations. Speculation suggests that the BoE could implement a significant 140 basis point increase in interest rates by January 2024. This projection, if realized, raises the possibility of a reassessment in the market. If investors revise their expectations and perceive the tightening as too aggressive or potentially detrimental to economic growth, it could pose downside risks for the British Pound. Consequently, the GBP/USD exchange rate could experience downward pressure. GBP/USD daily chart The EUR/GBP pair has witnessed a decline over the past two sessions; however, it may find support at its current levels and potentially make a move towards the 0.8600 mark once again. This shift in the pair's direction could be driven by the potential threat of a repricing of the previously overbought British Pound, influenced by the actions of the Bank of England. The recent weakening of the EUR/GBP pair suggests that the Pound has gained strength against the Euro. However, the current levels may act as a support zone, potentially leading to a reversal in the pair's direction. If the support holds, it could provide an opportunity for the EUR/GBP pair to regain some ground and move towards the 0.8600 level. The potential repricing of the Pound is a significant factor that could influence the pair's movement. If market participants perceive that the British Pound had become overbought or overvalued in relation to its fundamentals, they may adjust their positions accordingly, leading to a corrective move in the currency. This adjustment could contribute to a potential reversal in the EUR/GBP pair, benefiting the Euro and causing the pair to move higher towards the 0.8600 mark. EUR/GBP daily chart Yesterday's market sell-off was primarily triggered by the release of the minutes from the Federal Reserve, which revealed a greater inclination for further tightening of monetary policy than previously anticipated. This direction gained further momentum with the release of strong employment-related data, namely the ADP payrolls and ISM services reports, which indicated that the US labor market remains robust and is expected to continue performing well. The ADP payrolls report for June showcased an impressive addition of 497,000 new jobs. However, it is important to note that a significant portion of these positions were in lower-paid service roles, which could have implications for wage growth and overall economic recovery. In addition to the employment data, the prices paid component of the ISM services report indicated a slowdown, reaching its lowest level in three years. This decline in price pressures suggests that inflationary pressures might be easing, potentially influencing the Federal Reserve's decision-making process regarding future monetary policy actions. The combination of the Federal Reserve minutes highlighting a stronger inclination for tightening, along with positive employment data and easing price pressures, contributed to the market sell-off observed. Investors and traders reacted to these factors, reassessing their positions and adjusting their expectations accordingly. US Employment Change The resilience of the labor market presents a challenge for the Federal Reserve in its pursuit of achieving its target inflation rate. Despite the possibility of a potential decrease in headline Consumer Price Index (CPI) to 3% in June, the task of returning inflation to the desired level becomes increasingly difficult. Today's release of the US nonfarm payrolls report for June has the potential to further reinforce optimism about the US economy. A strong jobs report would provide evidence of a robust labor market, indicating economic strength and potential future growth. However, there is also a concern that such a positive report could lead the Federal Reserve to overestimate the economy's resilience and prompt them to raise interest rates more aggressively than necessary. The market has already priced in these expectations, as reflected by the recent rise in yields. The anticipation of a stronger economy and the possibility of more aggressive rate hikes by the Federal Reserve have contributed to an increase in yields. This pricing-in of expectations suggests that there is a level of caution in the market regarding the potential actions of the central bank and the impact they may have on various sectors. Balancing the need to support the labor market with the goal of achieving the desired inflation rate remains a challenge for the Federal Reserve. The nonfarm payrolls report for June will be closely watched by market participants and policymakers alike, as it has the potential to shape future monetary policy decisions and market expectations. As always, it is important to monitor economic data releases, central bank statements, and market sentiment to gain a comprehensive understanding of the current landscape and make informed decisions regarding investments and trading strategies.
by FOREXN1
9
MICROSOFT Remains a buy as long as the 1day MA50 holds.Microsoft / MSFT turned sideways inside the 4 month Channel Up after it hit the 350 Resistance (and All Time High) and got rejected. The price is now approaching the bottom of the Channel Up and the 1day MA50. The 1day MA50 has been supporting since January 26th. As long as it holds, buy and target 360. If the price closes a 1day candle under it, sell and target 315. A closing under the 1day MA100, can initiate a bearish reversal. Notice: the 1day RSI is holding its Rising Support, keeping the momentum bullish. Follow us, like the idea and leave a comment below!!
NASDAQ:MSFTLong
by TheCryptagon
6
Daily Market Analysis - THURSDAY JULY 06, 2023Key News: USA - ADP Nonfarm Employment Change (Jun) USA - Initial Jobless Claims USA - Services PMI (Jun) USA - ISM Non-Manufacturing PMI (Jun) USA - JOLTs Job Openings (May) USA - Crude Oil Inventories During Wednesday's trading session, the Dow Jones Industrial Average concluded the day with a decline, driven by the release of the Federal Reserve's meeting minutes for June. The minutes indicated a growing interest among policymakers in resuming interest rate hikes. However, in the tech sector, major players showcased mostly positive performance. Notably, Meta (formerly known as Facebook) soared to a 52-week high as anticipation mounted for its upcoming Twitter competitor. Specifically, the Dow Jones Industrial Average recorded a decrease of 0.38%, translating to a decline of 129 points. Similarly, both the Nasdaq and the S&P 500 experienced a modest 0.2% decrease during the trading session. Dow Jones Industrial Average Index daily chart The release of the Federal Reserve's meeting minutes from June, which occurred on Wednesday, shed light on the members' sentiment regarding future rate hikes. The minutes revealed that a significant majority of the members, described as "almost all," expressed support for the notion of resuming rate hikes. This position was motivated by concerns about persistently high inflation levels, which were deemed "unacceptably high." Furthermore, the minutes indicated a hawkish stance among some members, with a preference for raising rates rather than pausing during the June meeting. These members highlighted their worries about a tight labor market, recognizing that such conditions could potentially drive up wages and inflation even further. However, while the discussion expressed a general inclination towards resuming rate hikes, the decision to implement such actions in July will largely depend on upcoming data. Pantheon Macroeconomics suggests that the forthcoming data expected to be released this week and next will play a crucial role in shaping the Fed's decision-making process. It is worth noting that approximately 90% of traders, as indicated by the Fed Rate Monitor Tool, anticipate that the Federal Reserve will indeed resume rate hikes in July. Effective Fed Funds Rate Investor concerns regarding a potential global economic slowdown were heightened due to underwhelming services data from China. However, the impact of these concerns on the broader market was somewhat mitigated by the strong performance of prominent technology companies. Notably, Meta (previously known as Facebook) experienced a significant surge of over 3%, reaching 52-week highs. This impressive performance came ahead of the launch of Meta's rival Twitter app, Threads, scheduled for Thursday. It is noteworthy that Twitter had recently announced its decision to temporarily restrict the number of posts users can read on its platform. Meta Platforms stocks daily chart Despite Apple's 0.6% decline, the company's market capitalization remains above $3 trillion, demonstrating its significant value in the market. In contrast, Microsoft experienced a slight increase in its stock price. Wedbush, a prominent research firm, predicts that Microsoft will also join the exclusive $3 trillion club alongside Apple by early 2024. This projection is based on the belief that advancements in artificial intelligence (AI) will be a major driver of Microsoft's growth and valuation. Wedbush noted in a statement on Wednesday that, considering the potential of AI and through a sum-of-the-parts valuation, Microsoft's overall value should propel it to the esteemed $3 trillion club within the next few years. Microsoft stock daily chart During the US Independence Day holiday, major currencies displayed a noticeable trend of trading within narrow ranges in relation to the US dollar. Among the G10 currencies, the New Zealand dollar (NZD) emerged as the top performer. This could be attributed to the unwinding of long positions in the Australian dollar/New Zealand dollar (AUD/NZD) pair, which likely contributed to the NZD's relative strength in the market. AUD/NZD daily chart Throughout this week, European markets have faced consistent declines, with yesterday's losses being notably significant. The downward trend in the markets is expected to persist today. The market weakness witnessed yesterday was primarily fueled by concerns surrounding disappointing services Purchasing Managers' Index (PMI) data from both China and Europe. These underwhelming data releases have heightened worries about a potential global economic slowdown. Furthermore, the increasing risks related to interest rates have contributed to weakness in sectors such as basic resources, energy, and financials, amplifying the overall market downturn. These negative sentiments have had a spill-over effect on Asian markets as well, reflecting the widespread concerns about the global economic landscape. Employed Usually Works Full time Chart US Employed Persons status Today's highly anticipated release of the ADP payrolls report is expected to show a robust figure of 225,000, slightly lower than the previous month's 278,000. Despite this slight decrease, it is important to note that the current level of job vacancies suggests that we are unlikely to see a weak jobs report in the upcoming months. Consequently, it is less probable that the labor market will serve as the catalyst for the Federal Reserve to signal a pause in its policies in the near future. US Purchasing Managers Index (ISM) The Federal Reserve has expressed concerns regarding the persistence of services inflation, highlighting its potential impact on the economy. Today's ISM services report is anticipated to reveal a modest uptick in headline activity, reaching around 51.3. However, special attention will be given to the prices paid component, which experienced a decline to 56.2 in May, marking a three-year low. This data will provide insights into the pricing pressures faced by service providers. As for Independence Day, please note that trading hours may be affected due to the holiday in the United States. The Unemployment Rate is a key economic indicator that measures the percentage of the labor force that is unemployed and actively seeking employment. It provides insights into the health of the labor market and is closely monitored by economists, policymakers, and market participants.
by FOREXN1
15
Part 3 | All 7 Big Tech | QQQ Sp500 Price level Trend Guide- QQQ still doesnt have a hourly downtrend confirming so daily lower high is not set. - SPY weekly bullflag confirm, so far no follow through yet but we ran out of time so it doesnt count as a rejection for me until i see hourly downtrend - TSLA potentially shaping up an equilibrium - NVDA bull break above 420 back into its all time highs sideways chop zone - AMZN fifth rejection from its 131 chop zone still above support though - GOOGL still the weakest only tech in a daily downtrend - MSFT went form daily downtrend to uptrend today - META same as AMZN in a chop zone rejection 5th time from its resistance.
NASDAQ:AMZNShort
by ArcadiaTrading
Part 2 | All 7 Big Tech | QQQ Sp500 Price level Trend Guide- QQQ still doesnt have a hourly downtrend confirming so daily lower high is not set. - SPY weekly bullflag confirm, so far no follow through yet but we ran out of time so it doesnt count as a rejection for me until i see hourly downtrend - TSLA potentially shaping up an equilibrium - NVDA bull break above 420 back into its all time highs sideways chop zone - AMZN fifth rejection from its 131 chop zone still above support though - GOOGL still the weakest only tech in a daily downtrend - MSFT went form daily downtrend to uptrend today - META same as AMZN in a chop zone rejection 5th time from its resistance.
NASDAQ:QQQShort
by ArcadiaTrading
Part 1 | All 7 Big Tech | QQQ Sp500 Price level Trend Guide- QQQ still doesnt have a hourly downtrend confirming so daily lower high is not set. - SPY weekly bullflag confirm, so far no follow through yet but we ran out of time so it doesnt count as a rejection for me until i see hourly downtrend - TSLA potentially shaping up an equilibrium - NVDA bull break above 420 back into its all time highs sideways chop zone - AMZN fifth rejection from its 131 chop zone still above support though - GOOGL still the weakest only tech in a daily downtrend - MSFT went form daily downtrend to uptrend today - META same as AMZN in a chop zone rejection 5th time from its resistance.
NASDAQ:QQQShort
by ArcadiaTrading
1