Microsoft Trading forecasts and signals

Microsoft shares have increased in price by more than 35% since the beginning of the year, but it seems that this is far from the limit. MSFT are growing much faster than NASDAQ, as a result of which many investors have a desire to close a position and fix a profit. Below are the reasons that make us believe that the potential for long-term growth remains and patient investors will be rewarded for their trust. The main drivers of Microsoft's development are such areas as cloud business and technologies for improving the efficiency of work processes. All this is accompanied by an ever-growing demand for both equipment and software. The annual revenue of the cloud business (Azure) in 2020 increased by 24%, the business segment (Office 365 and Dynamics 365)-by 16.2% and the PC – by 12.1%. It is unlikely that many people are ready to argue with the fact that the company's activities will be successful in the foreseeable future: analysts expect EPS growth to double, to $16 in the next five years. The pandemic strengthened Microsoft's position: the amount of cash on the balance sheet increased from $65 billion to $72 billion in a year and a half. Thus, not only revenue is actively growing, but also profitability, which serves as additional support for high stock prices. It is also worth noting an important nuance – 80% of MSFT trading days are traded no further than 5% of the maximum marks (the last 5 years). This means that an investor who decides to take a profit and open a new position after the next tangible correction will most likely have to spend quite a lot of time waiting for the right ...

The marketOn July 28, US stock exchanges ended trading in different directions. The S&P 500 declined by 0.02%, remaining at 4,401 points, the Nasdaq rose by 0.70% due to record quarterly results from AAPL, GOOGL and MSFT, and the Dow Jones lost 0.36%. The sectoral dynamics also turned out to be modest. Oil and gas companies looked the best (+0.97%), among the outsiders were the sectors of non-cyclical consumer goods (-0.87%) and utilities (-0.69%).Company newsThe aircraft manufacturer Boeing (BA: +4.2%) presented decent quarterly results. Analysts note the gradual recovery of the industry after the recession due to the pandemic.Alphabet (GOOGL: +3.2%) reported higher than expected for the quarter. Positive dynamics can be traced in all segments, especially in the direction of digital advertising.Apple's financial results (AAPL: -1.2%) exceeded expectations. The main driver of growth was iPhone sales. But investors are concerned about the continuing problem of supply chain disruption.We expectGlobal stock markets are showing mostly positive dynamics. At the upcoming auctions, investors are expected to win back significant events that occurred the day before. Yesterday's FOMC meeting did not bring any surprises: the rate was kept at the level of 0-0.25%. In addition, the regulator will continue to buy back assets until it sees significant progress in macroeconomic metrics. The regulator's position on inflation has also remained unchanged: it considers the current high indicators to be a temporary factor. In addition, the FOMC members did not begin to discuss the possible tightening of the PREP, while there were no hints that this issue will be considered in the near future. The markets practically did not react to the announcement of the results of the meeting, so today, probably, quiet trading is coming.The focus of investors' attention is still the publication of corporate reports, which are very strong and beat market expectations on a record. At the same time, the impact of inflation on costs and prices remains an important negative factor in many industries.The day before, the White House and representatives of both parties reached an agreement on the main points of the $550 billion infrastructure package.Asian stock markets showed positive dynamics. Hong Kong's Hang Seng rose by 3.30%, China's CSI 300 rose by 1.89%, Japan's Nikkei 225 added 0.74%. EuroStoxx 50 is up by 0.33%.Risk appetite is weak. The yield of 10-year treasuries is kept near 1.25%. Brent crude futures are trading near $75 per barrel. Gold is rising to $1,817 per troy ounce.We expect that the S&P 500 will hold the upcoming session in the range of 4370-4420 points.MacrostatisticsToday, data on the number of applications for unemployment benefits will be released: it is expected that they will amount to 380 thousand against 419 thousand in the previous period. Also today, the index of incomplete sales in the real estate market for June will be published. It is expected that the increase will reach 0.3% mom against 8.0% mom in May.Technical pictureTechnically, the S&P 500 continues to move in a long-term uptrend. On the eve of the broad market index consolidated in a narrow range. The RSI indicator continues to form a triple "bearish" divergence, threatening a short-term correction. The nearest support is located near the trend line at the level of 4300-4320 ...

The market on the eveOn July 23, the US stock exchanges ended trading in the green zone. The S&P 500 rose by 1.01% to 4,411 points, the Nasdaq added 1.04%, the Dow Jones rose by 0.68%. Representatives of the communications services sector (+2.65%), as well as utilities (+1.28) remained the leaders of growth. The energy sector was trading worse than the market, which fell by 0.43%.Company news:Shares of Moderna (MRNA: +7.8%) reached record levels on the news about the permission for vaccination of children over 12 years old received from the EU regulator.The quotes of the consulting firm Robert Half (RHI: +7.3%) rose after the publication of a strong quarterly report: the company's revenue significantly exceeded forecasts.Intel securities (INTC: -5.3%) were under pressure from the deterioration of forecasts for the next quarter due to a shortage of chips.ExpectationsThe chief infectious disease specialist of the United States, Anthony Fauci, warned of the risk of new outbreaks of COVID-19 in states with a low level of vaccination due to the spread of the delta strain. A difficult epidemic situation is developing in Florida, which accounts for about 20% of newly detected infections. At the same time, the incidence does not yet exceed 350 cases per 100 thousand of the population with an insignificant mortality rate. The situation with the next wave of the epidemic does not cause serious concerns among investors.The dynamics of trading today will be determined by the expectations of important events for investors. The quarterly reporting season is in full swing. This week, Apple, Microsoft, and Amazon will present their results. It is possible that they will be able to exceed the expectations of investors. As of today, about a quarter of the companies included in the S&P 500 have reported, and 88% of them have earnings per share higher than forecast.The focus will also be on the FOMC meeting scheduled for July 28. However, the investment community does not expect important news from the Fed this time. Today, in our opinion, the market will be dominated by negative dynamics after the positive of last Friday.Asian stock markets closed mainly in the red zone. Hong Kong's Hang Seng fell 1.50%, China's CSI 300 fell 3.22%, although Japan's Nikkei 225 rose 1.04%. EuroStoxx 50 loses 0.85%.Risk appetite is weak. The yield of 10-year treasuries is 1.28%. The price for Brent futures rose to $74.1 per barrel. Gold is trading near $1801 per troy ounce.We expect that the S&P 500 will hold the upcoming session in the range of 4380-4420 points.MacrostatisticsThe monthly report on new home sales for June will be published (forecast: growth of 4% m/m after a decline of almost 6% m/m in May).Technical pictureTechnically, the S&P 500 continues to move in a long-term uptrend. On the eve of the broad market index reached a new high. The trading week ended above a significant resistance at the level of 4,400 points, and this was a positive signal. The RSI and MACD indicators indicate the likelihood of continued growth in the coming trading sessions, although a small technical pullback after a four-day rally is not excluded. The nearest target for the S&P 500 is 4450 points.Point of viewOn July 27, Microsoft (MSFT) will report for the second quarter. According to the consensus forecast of Factset, the corporation's revenue will grow by 16%, to $44.13 billion, non-GAAP EPS will increase by 30.8%, to $1.91. We believe that the Productivity and Business segment will be among the key drivers of financial performance growth due to the continued steady demand for cloud application solutions (Office 365 and Dynamics 365), as well as the positive situation in the online advertising market (LinkedIn). In addition, due to the active increase in demand for Azure cloud computing services, we expect very strong results from the Intelligent Cloud segment. We believe that the focus of investors ' attention will be forecasts for the next quarter and the rest of this year. Of particular interest are the margin indicators and expectations related to its prospects. Adobe and Oracle, which reported earlier, indicated an increase in operating expenses and investments.Also this Tuesday, the Alphabet (GOOGL) report for April-June will be published. The general market consensus assumes revenue growth by the maximum 46% y/y since 2028. The optimistic forecast is based on the effect of a low base (in the second quarter of last year, the Internet giant's revenue decreased by 1.7%) and is supported by favorable conditions in the online advertising market. The latter factor has already been reflected in the quarterly reports of Snap and Twitter. The focus is also on the results of the Google Cloud segment. Its revenue is expected to increase by 50% y/y, the most important metric for investors will be marginality, which has been negative so far. We believe that the actual results of Alphabet will exceed consensus forecasts, but the reaction of investors to the release may be ambiguous. Based on the analysis of the options market, we do not exclude the tendency to fix positions.On July 26, after the closing of the main trading, the quarterly reports will be presented by Tesla Inc. (TSLA). The FactSet consensus assumes a twofold, up to $11.5 billion, revenue growth year-on-year with an increase in EPS (according to GAAP) from $0.10 to $0.55. The volume of production and supply of electric vehicles in the reporting period increased by 15% and 9% q/q (2.5 times and 2.2 times y/y), respectively, for the first time in the company's history exceeding 200 thousand units. With this in mind, we are counting on Tesla's strong financial results for April-June. Management's comments on compliance with the guidelines, the situation with the shortage of chips, as well as operations with digital currency will be ...

The media reports about Microsoft's intention to buy Nuance Communications. The relevant deal may be officially announced in the coming days. It will amount to $16 billion. The scope of Nuance Communications includes the production of software and equipment. The developments of this corporation were used in the creation of some programs for Apple. Nuance Communications' revenue has been declining for several years. In this situation, its management considered the purchase offer from Microsoft very relevant. This deal will be beneficial for both companies. Microsoft hopes to increase its customer base through Nuance Communications. This will especially affect such areas of activity as healthcare and telecommunications, as well as financial services. Microsoft has acquired several companies over the past five years in an effort to expand its business. So, in 2016, the LinkedIn network was purchased. Then GitHub and ZeniMax were ...

Investing in CFDs on shares of well-known companies of the worldCFD is an abbreviation of Contract For Difference. CFD is a financial instrument that allows you to speculate on the difference in the prices of the main asset, which are shares or any other instruments.When trading CFDs, the security or precious metal itself is not purchased. That is, the trader does not receive a part of the company or a physical unit of the precious metal for management. On the one hand, this is a minus. However, a pleasant surprise of CFD trading may be that the trader does not have additional obligations in connection with the ownership of the stock.The opportunities for both buying and selling also apply to CFDs. For example, to make money on the fall in the price of the main asset, a CFD contract is sold.What stocks have become available for trading?Recall that the work is carried out not by the securities themselves, but by contracts for the difference in their prices.Margin leverage and other conditions for trading with CFDsTrading contracts for difference is marginal in nature. This means that a trader can trade CFDs with volumes several times higher than his margin collateral.Read more: What is a Leverage in ForexCommissions and spreads are also characteristic of CFDs. The spread is a natural market phenomenon, namely the distance between the nearest prices of buyers and sellers. Every trader who has ever traded currency instruments or already existing ones on the CFD platform is well familiar with spreads.The transfer of an open position to the next day also entails the write-off or accrual of swaps. The swap table can be found on this page.Time of trading CFDs on sharesSince real shares are traded on physical exchanges, their trading time is limited by the working time of the exchange. This means that, for example, when trading CFDs on Google shares, you need to focus on the working hours of the NASDAQ exchange.Shares of other IT companies - Apple, Microsoft - are also listed on NASDAQ. But IBM is already trading on the New York Stock Exchange - NYSE, which is open from 9.30 to 16.00 local time. NASDAQ also operates during these hours.It is important to remember that exchanges are closed and opened every working day. This means that there is a high probability of gaps - 5 times a week. To prepare in advance for possible price gaps, it is worth following the release of economic news.Read more: What is the New York Stock Exchange (NYSE)Dynamics of stock pricesA new tool in a trader's portfolio is always a good thing, because stocks, for example, show a different price dynamics than currency pairs. The new price dynamics makes it possible to apply other trading strategies.Read more: How to invest in stocks and what you need to knowAs for the time horizons of trading, CFD speculation can be performed on both weekly and minute timeframes, and everything in between. CFD per share is the same instrument, in terms of trading opportunities, as a currency pair. Therefore, both short-term trading and long-term being "in the stock" are possible.The stock market differs from the foreign exchange market by a smaller volume, but a large variety of instruments, as well as by centralization. An important feature of the stock market is that companies whose shares are traded on stock exchanges are grouped into sectors, for example: banking, IT, automotive, oil production, etc. This division into sectors directly determines the trading strategies applied to stocks. For example, some popular strategies involve multidirectional trading in shares of one sector to insure against risks across the sector, or multidirectional trading in different sectors to insure against risks across the market as a whole.Read more: The main components of a Trading StrategyStock chart analysisFor the first time, technical analysis was widely used in stock markets. Then, with the advent of the Forex market, he continued his development on currencies that were more popular among traders for technical reasons.Trading algorithms and Stock marketsFor advanced traders who have a deep understanding of manual trading on other instruments, the appearance of CFDs means new niches for their robot trading algorithms.Read more: Trading robots on the stock ...

The S&P500 index is one of the main and most popular stock barometers of the American market. It can be used to objectively judge what dynamics are developing in the market as a whole, whether the majority of American stocks are declining or vice versa, the market as a whole is growing. This is the main function of the stock index - to demonstrate the overall dynamics of the entire market at once. Moreover, according to the dynamics of the index, which includes almost all sectors of the country's economy, it is possible to judge the overall economic growth and development of the country's economy.The beginning of the calculation of the S&P500 index was laid back in 1957, when the analytical agency Standard and Poor's for the first time began to maintain lists for stocks that formed the basis of the index. From the same period, the official calculation and publication of the index as an exchange barometer of the American market begins.The main ideology of creating the S&P500 index was to make a broad market index that covers all key sectors of the economy and represents them as representatively as possible by the best and largest companies. At that time, the Dow Jones Industrial Average Index was the most popular, but it reflected only the dynamics of the largest companies in the industrial sector, there were separate sectoral indices, but there was no large-scale broad market index for the largest companies in the country.The S&P500 index is the estimated value of a virtual basket of shares of the 500 largest American companies from various sectors of the economy. These are the largest companies by capitalization. The capitalization of all companies included in the S&P500 index, which is essentially the capitalization of the index itself, exceeds $23.16 trillion. This is about 70% of the capitalization of the entire US stock market.However, at the moment, due to the rapid development of financial markets, stock indexes are something more than just market barometers. First of all, this concerns the S&P500 stock index, and in order to understand what the stock index really is now, we will consider with you a few key points about the S&P500 index:Characteristics of the S&P500 indexTypes of the S&P500 indexThe composition of the S&P500 indexStructure of the S&P500 indexCalculation of the S&P500 indexRebalancing the S&P500 indexHow to invest in the S&P500 indexConclusionCharacteristics of the S&P500 indexAs already mentioned, the S&P500 index includes the TOP 500 largest companies by capitalization from various sectors of the economy. But in fact, at the moment the index includes 505 companies and the index is not a static basket of stocks. Its composition and structure are regularly reviewed, companies can be excluded from the index, new ones are added, the weight of a particular company changes. The S&P500 index has quarterly rebalances in March, June, September and December.Read more: How to invest in stocks and what you need to knowThe index is calculated using the weighted average method, and the free-float of companies acts as a weighting factor in the index, that is, the share of their shares in free circulation.The S&P500 index is calculated in several currencies on various exchange platforms. So, in addition to US dollars, the index is also calculated in Australian and Canadian dollars, in Hong Kong dollars, francs, euros, pounds, yen, Singapore dollars, as well as in Brazilian reals and Mexican pesos.Types of the S&P 500 indexThere are also as many as three forms of calculating the S&P500 index. The main index is calculated exclusively based on the price values of the shares included in it, this is an index with the stock ticker SPX, but there are also other calculation options taking into account the capitalization of the dividends of the companies included in the index (ticker SPXT) and the net price and dividend yield of the index, net of taxes (ticker SPTR500N).For clarity of comparison, we can see what kind of profitability all three types of index calculation showed every year since 2008. Total returns is the total return of the index, the price increase plus the company's dividends. Price returns is only the return due to price growth and Net total returns is the total return of the index, both price and dividend, net of taxes.The composition of the S&P500 indexAs already noted, the S&P500 index includes the largest companies by market capitalization, but in the index itself they are still "weighted" by the free-float indicator. Thus, the largest share in the weight of the index is not necessarily occupied by the company No. 1 in terms of market capitalization.At the moment, the company that has the largest weight in the S&P 500 index is Apple (AAPL). The weight of the Epl in the index structure is slightly more than 4%. In general, the first TOP ten companies of the index make up 21.2% of the weight of the entire index.The list of the largest companies, in terms of weight in the index, is as follows:The first places are occupied by Apple (AAPL), Microsoft (MSFT) and Amazon (AMZN), and the world-famous company Johnson and Johnson (JNJ) closes the top ten.Structure of the S&P500 indexIn terms of the composition of the index, the S&P500 index represents all the leading sectors of the US economy:The largest sector in the index is the information technology sector, due to such giants in the index as Google (GOOGL), Apple (AAPL) and Microsoft (MSFT). The second largest sector is the healthcare sector and the third is the financial sector. The lowest weight in the index is occupied by the telecommunications sector, the metallurgy and mining sector, as well as the real estate sector.Calculation of the S&P500 indexBelow we will look at the basic principles of calculating the index. As we have already noted, the S&P500 index differs from many other indices in that the weighting factor for calculating the index is not just the market capitalization of the company, but the capitalization of the free-float, that is, the share of shares that is in free circulation.The free-float indicator for companies can change quite often, therefore, in order to accurately follow the calculation principles, the index needs periodic rebalancing, which, according to the plan, take place once a quarter.In addition, there are separate criteria by which companies, in principle, get into the index, and if they no longer meet these criteria, they are excluded and new ones come to replace them.Rebalancing the S&P500 indexThe company itself, the index operator S&P Dow Jones Indices in its monthly monitoring report on the index defines the following criteria for entering the S&P500 index:criteria for entering the S&P500 indexAll companies in the index must be registered in the United States.The company's market capitalization should be at least $6.1 billion.The number of issued shares in free circulation of the company must be at least 50%.Companies included in the index must be successful and profitable. In particular, a mandatory criterion is that the company must have a profit from operating activities over the past 4 quarters.The index includes only liquid ordinary shares of the company, for which there are high trading turnover and which have a sufficient market trading history.When a company is included in the index, the industry factor is taken into account. In order for the index to be representative and serve not only as a purely exchange barometer, but also reflect the real economic situation, the industries in the index have approximately the same weight as the structure of the real US economy. And this is also guided by the index committee when including new securities in the index.New companies that meet the criteria for inclusion in the index cannot endlessly replenish it, so many companies that largely cease to meet at least one of the described criteria for inclusion in the index are excluded from it. So for the last more than 75 years of the index's existence, more than 1000 companies have been excluded from it. That is, in fact, during this period, the index made two asset turns, and the average period of a company's stay in the index is about 30 years. However, of course, there are many such companies in the index that have been in it since its formation.Based on these criteria, we understand that the companies that are part of the S&P500 index are among the best companies according to key criteria for investors. This is the scale of the company, its profitability, a high free-float, which in fact means low dependence on manipulation and large shareholders, as well as high liquidity of the company's shares. Thus, we see that the S&P500 index was created with the goals of practical investment application.As a result, the index is not a static basket of stocks, but in fact, due to the selection criteria, the process of managed, but long-term investment is carried out in it. That is, this index is a kind of fund with low management activity. However, this leads to the fact that the index actually demonstrates very high and, most importantly, stable results in terms of profitability for long periods of time. That is why 85% of all actively managed funds and managers of trust management strategies cannot beat the S&P500 index in terms of profitability for a long period of time, over 5 years. And only 15% manage to do it.From all this, we can conclude that the S&P500 index itself is an attractive and interesting investment object. Therefore, in the next part of our article, we will look at how you can invest directly in the S&P500 index.How to invest in the S&P500 indexSince the S&P500 index is a purely settlement basket of securities, in fact, it is impossible to purchase the index itself on the exchange. Knowing the composition and structure of the index, you can duplicate it, but due to the number of securities and weight coefficients, in order to duplicate the S&P500 index, you will need an amount of more than a million dollars. This is certainly not suitable for all investors, and moreover, it will be difficult and very time-consuming work, in a constantly changing market, to form a portfolio of 500 securities and at the same time accurately maintain the share of each paper relative to the entire portfolio.Therefore, a number of special tools have been created for investing in the index. Most of them allow you to deal with the stock index in the same way as with a stock, you can buy and sell it literally in two clicks in the exchange terminal.Below we provide a complete list of all available tools for investing in the S&P500 index, and then we will analyze each class of tools separately in detail.List of available tools for investing in the S&P500 index:ETFs for the S&P 500 indexETN on the S&P 500 indexS&P 500 Futures and OptionsNext, we will consider each class of tools in more detail.Read more: What are futures: types, features, advantages and risksETFs for the S&P 500 indexAn ETF is a traded exchange-traded fund, an ETF is bought on an index, like a regular stock (we wrote more about ETFs in this article). This is the most affordable and most popular way to invest in the index. ETFs on the index can be from different ETF operators and can be of different types. ETFs that pay dividends and clearly repeat the price movements of the index and ETFs that reinvest dividends and essentially repeat the S&P500 index with the ticker SPXT are an index that is calculated taking into account dividends.ETFs for the S&P 500 indexIn any case, the main feature of an ETF is that its task is to track the index values as accurately as possible and this is a way of investing that almost directly brings the investor closer to the same way as completely duplicating the index with a basket of securities. Moreover, there is almost a real duplication of the index, since the ETF operator management company physically buys shares in the necessary proportions and constantly monitors and balances the portfolio so that it corresponds to the index value as accurately as possible. And the ETF itself is only a tradable part of a global fund of securities with an index structure. In practice, the discrepancy between the values of the index itself and the ETF of the traded ETF for it is only a few points.ETFs for the S&P500 index are traded on various major global platforms in America, Europe and Asia. The largest and most famous platform where ETFs are traded is the NYSE Arca section of the New York Stock Exchange. By the way, the most liquid instrument in the world with the highest trading turnover is currently traded there – this is the SPDR SP 500 ETF Trust (ticker SPY).Read more: What is the New York Stock Exchange (NYSE)ETN on the S&P 500 indexETN (Exchange trade notes) – a traded exchange note. This is a very young financial instrument that has not yet received such a wide distribution as an ETF. From an external point of view, if we compare ETFs and ETNs for the S&P500 index, they are almost 100% identical, but by their nature and form of education they are fundamentally different tools.ETN is a note, which means that it is a debt instrument, similar in nature to bonds. ETN is issued by banks and, in essence, it is a debt obligation of the bank to repay at the end of the note's circulation period an amount equal to or equivalent to the value of the S&P500 index.From the point of view of investors in the index in the case of ETN, the main thing is to understand the main features of investing in this tool:ETNs will 100% accurately repeat the dynamics of the S&P500 index, since it is not based on real assets that require rebalancing and adjustments – this is the bank's debt obligation, which is calculated exactly with the value of the S&P500 index;The difference in risks. If an ETF operator leaves the market, then this practically does not carry a significant risk for investors, since any ETF is based on a real basket of securities, which will then be sold and paid out to participants in proportions. Investing in an ETN is taking on the risk of the financial condition of the bank, which may default on an ETN exactly the same as on a bond. At the same time, as a reward, the bank is paid a significantly higher commission for managing the fund than in the case of ETFs.ETNs have their own maturity and are redeemed in the same way as a bond.ETNs are gaining significant popularity in the investment community and are also traded on leading exchange platforms. The main platform where ETNs are traded on the S&P500 index is the Tel Aviv Stock Exchange (TASE).S&P 500 Futures and OptionsThese tools also provide an opportunity to access the purchase of the S&P500, but these tools are still used more by speculative players than by investors due to their nature and calculation properties. We can also say that such instruments carry increased risks of investing in the S&P500 in the form of the emerging leverage effect and require special skills from the investor to correctly and safely invest in the index.S&P 500 Futures and OptionsFutures and options on the S&P500 index are traded on special exchanges - the Chicago Mercantile Exchange (CME - Chicago Mercantile Exchange) and the Chicago Options Exchange (CBOE - Chicago Board Options Exchange).Read more: Chicago Mercantile Exchange (CME): history, structure, advantages and featuresConclusionIf it did not seem simple and attractive to invest in indices in general and in particular in the S&P500 index, it is still worth considering that, firstly, this is primarily a very long-term investment, and secondly, despite the rather strict selection criteria, the turnover of assets in indices is always quite low, it is low in particular in the S&P500 index, which means in practice for an investor investing essentially in a wide market, with all the disadvantages, as well as entire industries and individual companies. Along with the best and most top companies, investors are simply forced to invest in less attractive companies in addition. In this regard, at most market phases, it is a point, selective investment in a portfolio of carefully selected securities that is more effective than a continuous purchase of the entire market.We are supporters, in most cases, of a point-based approach to investing, when it is necessary to form a diversified, but as selective as possible portfolio of ...