Microsoft Trading forecasts and signals

The US stock market retains a corrective mood, the drivers of which are the lockdown in China, the revision of US consumer demand and confidence benchmarks by economists, as well as changes in the positive forecasts of company management by the end of this year. Over the past two weeks, the S&P 500 has lost 5.06%. The strengthening of the dollar and the tightening of the PREP put additional pressure on high-risk assets.Macro data confirm the persistence of inflationary pressure in the United States. The consumer price index for March is expected to have increased by 1.2% mom and 8.5% YoY. At the same time, there are signs of a softening of the imbalance of supply and demand in the labor market, which may contribute to a slowdown in wage growth as a factor of inflation. In the next two weeks, the focus will be on US GDP growth data for the 1st quarter, data on household incomes and expenditures, business activity and labor market dynamics.Technical pictureThe reporting season for the 1st quarter of this year is in full swing, and almost 80% of S&P 500 companies exceeded market expectations. Last week, the S&P 500 index tried to turn up, but active sales on April 25-26 stopped this attempt. The RSI and MACD indicators confirm the strengthening of the bearish trend, and in the absence of positive triggers in the short term, the index is likely to continue its downward movement.In such a situation, investors begin to actively study their portfolios and review assets. The main thing is to be guided by the rule of optimal diversification, due to which it is possible to increase the stability of investments at the time of correction.Ideas and recommendationsWhen forming a portfolio, special attention should be paid to the energy, industrial, financial, raw materials and technology sectors, as well as look at the securities of manufacturers of essential goods and representatives of the healthcare industry. It is better to choose those issuers that have left or improved their forecasts for the current year, for example, Microsoft, Procter & Gamble, Intuit, Boston Beer, UnitedHealth.JPMorgan Chase & Co. presented mixed results for the 1st quarter of this year, generally reflecting the general trends of the banking sector. The dynamics of net profit fell by 42% YoY and by 20.3% QoQ, which did not meet analysts' expectations. Net interest income continues to grow slowly due to the inflow of funds for deposits and the expansion of the loan portfolio. In addition, the management approved a new $30 billion buyback program, which should be launched from May. Given the continued strong positions of JPMorgan, the recommendation for securities is to "hold" with a target at around $ 150.Gap Inc. announced the departure of the head of the Old Navy brand, a key division for the company. The share of this segment in Gap's revenue is 50%. The company's products belong to the low price segment, and due to delays in supply chains, there is a shortage of goods, which, in turn, leads to lost profits. The change of the CEO of the key direction for GAP may negatively affect the financial performance of the company, which were already under pressure. In this regard, the target price for the securities has been reduced to ...

Microsoft Corp. reported a profit of $16.73 billion ($2.22 per share) in the 3rd quarter of the fiscal year, compared with $15.46 billion ($2.03 per share) a year earlier. Revenue for the reporting period increased from $41.71 billion to $49.36 billion. According to the forecast, the corporation's profit was expected to be $2.18 per share, and revenue – $49.05 billion.Thus, the company increased its net profit in the reporting period by 8%, revenue by 18% due to strong results in all business segments.Microsoft shares on the Nasdaq premarket on April 27 are growing by 3.81%, to $280.52 per ...

Cybersecurity in modern realities will be in trend for a long time. This can be fairly judged by the data on the demand for shares of companies engaged in such activities. It has grown steadily in the last two years.At first, the rise was due to the coronavirus pandemic that swept the whole world. Office employees were sent en masse to the remote, but employers were obliged to ensure their computer security, as they continued to access corporate data over the Internet. We needed private virtual networks and VPNs, equipment with security software, etc. There was even a new concept - SASE, under which an IT model with the functions of network and security services was hidden.The rise, which began in 2020, continued in 2021. But then there was a general decline in the securities market of IT companies. The reason was the announced plans of the Fed to tighten its monetary strategy. But after the beginning of the conflict in Ukraine and the news about the increased hacker cyberattacks on government websites, the situation has changed. Demand began to grow actively again.According to official financial statistics, subsidies to the cybersecurity sector increased by $150 million in 2021. It is difficult to say how much they will grow this year, given the current situation. Nevertheless, due to the relevance of the topic, it is now worth considering the option of investing in shares of cybersecurity companies.CrowdStrike is the undisputed leaderCrowdStrike (CRWD) occupies one of the leading positions in the cybersecurity sector. The direction of its work is to ensure the protection of services and computer systems.The company has its own autonomous AI-driven platform with a cloud architecture. It can collect a huge amount of data from the ecosystem in which the endpoints are combined. In a day, AI is able to process approximately 1 trillion signals about violations that threaten security. He not only blocks attacks, but also learns in parallel. Thanks to this, the platform's capabilities to provide protection against cyber attacks are constantly increasing.About 50% of Fortune 100 companies are CrowdStrike customers. The company shows good growth dynamics. The customer base expanded by 75% in 2021. Today it includes more than 14.6 thousand companies. Accordingly, the profit also increased (by 69%), which amounted to $1.3 billion. A free cash flow of $411 million was generated (67% more than in 2020). The issuer's market share increased by 4% and amounted to 14.2%.According to forecasts, CrowdStrike has excellent potential for development. It will reach its "ceiling" in the very distant future. In the meantime, the expansion of the targeted market guarantees the company the possibility of stable progress. Analysts are confident that the market will more than double by 2025 (from $55 billion to $116 billion). The issuer's good prospects are indicated by the fact that already now, being at the initial stage, CrowdStrike has achieved a long-term adjusted gross profit.C3.a1 - AI on guardUndoubtedly deserves attention C3.ai (AI), engaged in the creation of algorithms that allow the implementation of AI in large and very complex enterprises. With the help of the company's products, operational efficiency and corporate security are improved, the risks of illegal transactions aimed at money laundering are reduced.By the end of 2020, the issuer's profit increased by 71% against the background of the overall rise of the IT industry. In 2021, the pace decreased slightly, but income growth was also recorded, only more modest — by 17%. The indicator reached the level of $183 million.Objective facts speak in favor of the company. Its clients include such well-known brands as AstraZeneca, Baker Hughes and Shell, as well as one of the partners is the US Air Force. Balance C3.ai sufficient to compensate for all costs with a small amount of free cash flow.And yet, at the end of 2021, the issuer's shares collapsed by almost 80%, which was caused by investors' concern about the slowdown in income growth. They were also worried about the lack of new large customers and the increase in losses. But in 2022, the situation began to improve. At the end of the first quarter, C3.a1 revenue amounted to $111 million, free cash flow — $20 million. The company has about a billion dollars in cash and investments.Representatives of the company assure that by the end of 2022 an impressive profit will be received - 35-36% more than last year. Now there are no obstacles to growth, which means it will be stable and planned. This is facilitated by the expansion of the targeted market, which should reach $271 billion by 2024. Consequently, the prospects for the coming years have C3.ai very good.Fortinet Inc - at the forefront of cybersecurityFortinet Inc. (FTNT) specializes in the field of information security systems. It offers technological solutions based on the integrated Fortinet Security Fabric platform for automatic detection and reflection of digital attacks. Protection can be used for data stored in the cloud (works for Amazon Web Services, Microsoft Azure, Google Cloud, Oracle Cloud), on IoT devices and endpoints of corporate networks. The company's products are capable of providing full-fledged network and infrastructure security.The result of 2021 showed an increase in the issuer's securities by 75%. In February of this year, the financial statements for the last quarter and for the year as a whole were published. Quarterly revenue reached the level of $963.6 million – 29% more than in the 4th quarter of 2020. Annual profit exceeded $3.3 billion, showing an increase of 29%. A free cash flow of $1.2 billion was generated.Financial success is explained by the increased demand for the company's products. In 2022, it plans to launch a new FortiGate 3000F firewall based on its own NP7 and CP9 processors. The product will provide support for the creation of hybrid IT architectures that are used to more effectively implement digital innovations and increase the dynamics of business growth. The new firewall will have the highest performance in its sector.According to analysts' forecasts, the company's revenue should reach $4.3 billion this year. That is, the indicator will grow again by at least 29%. Fortinet Inc. securities are currently trading with a P/S multiplier slightly below 15, but this indicator is higher than the historical average. Judging by the company's recent successes, its shares will outperform the market, which makes them attractive for investment in the long term.Qualys - cloud-based digital security systemQualys (QLYS) has its own cloud platform at its disposal to provide system protection against cyber attacks. It has the most extensive information base on vulnerability signatures. Thanks to the company's products, customers can improve and automate corporate security processes while reducing costs. The partners include Amazon Web Services, Microsoft Azure and Google Cloud Platform cloud services.Qualys helps clients to collect and analyze a huge amount of information. The company's solutions make it possible to detect and qualify threats in time, and then issue recommendations for their neutralization. The customer base today includes 19 thousand enterprises from 120 countries, among which there are many large and well-known (from the Forbes Global 50 list — almost 65%, from the Global 500 - 45%).Qualys actively reacts to all changes in the cybersecurity technology sector, keeps its finger on the pulse, and therefore offers its customers the most modern solutions. One of the latest innovations is Context XDR. This product is designed for full-scale data tracking at all levels (network, cloud, applications, end devices), timely detection of potential threats and their neutralization.According to the latest report presented in February of this year, the revenue growth of Qualys was 16%. In 2021, the company made a profit of $109.8 million. GAAP net income is over $21.8 million ($0.55 per diluted share). According to the forecast, sales will grow by 12.8% in 2022.Microsoft and Google did not stay awayRealizing the prospects of business in the field of cybersecurity, two global giants decided to join it — Microsoft and Google. Both have already started reporting on their achievements.According to Microsoft (MSFT), the profit from projects in the field of protection against cyber attacks has already reached $10 billion. More than 40 thousand enterprises have become clients of the company in this direction. It is planned to expand the customer base by 40% annually. The issuer also wants to become one of the industry leaders as soon as possible. To this end, last year RiskIQ, specializing in protection against phishing attacks and virus software, was bought out for $500 million. Microsoft also became the owner of CloudKnox Security, which occupies the first position among competitors in the field of access rights management to cloud services.The company began to add cybersecurity tools to its Office 365 system. She launched a strategy to promote information security services along with the promotion of her own cloud platform. With a successful scenario, Microsoft has every chance to bypass already recognized leaders such as Okta, CrowdStrike and Splunk.Google is not far behind, which this year intends to buy Mandiant, which specializes in cybersecurity. If approval is received from the regulator, the transaction will lead to an increase in the attractiveness of the company's cloud service for customers. And this will give you a chance to join the leaders of the industry.Alphabet (GOOGL) Google is participating in the race. In 2022, the company became the owner of Siemplify, which develops security management systems, solutions for automating protection and timely repelling threats. The products of the Israeli startup are planned to be implemented in Chronicle.Cybersecurity segment companies preparing for IPONetskope, Illumio and Menlo Security are of interest to potential investors. They are just preparing for an IPO, but they show good potential. Netskope managed to raise about $300 million and was valued at $7.5 billion. Illumio's figures are a little more modest: fundraising in the amount of $225 million and an estimate of $2.75 billion.It is worth paying attention to the developer of algorithms for cybersecurity systems Darktrace (DARK). The IPO took place in the spring of 2921. Another interesting contender is SentinelOne, which successfully carried out the listing last summer. It releases cybersecurity software and in the near future, according to experts, may become a leading competitor to CrowdStrike.The cybersecurity segment has huge prospects for investment, but it is still poorly disclosed, the securities of the companies listed in the review may seem expensive at the moment, but it should be taken into account how fast the information security direction is developing and how quickly the profitability of issuers is ...

The market the day beforeThe trading session on February 9 ended with the growth of the main American stock indexes. The S&P 500 rose 1.45% to 4,587 points, the Dow Jones gained 0.86%, and the Nasdaq increased 2.08%. All sectors included in the broad market index closed in the black. The growth leaders were companies from the communications industry (+2.45%), real estate (+2.39%) and information technology (+2.31%).Company newsEnphase Energy (ENPH: +12.0%) exceeded the consensus forecast for profit and operating margin for the fourth quarter. The company was able to overcome logistical problems, earning record revenue.Microsoft (MSFT: +2.18%) will implement new principles for its app marketplace, including open access for developers, to comply with antitrust requirements amid plans to acquire Activision Blizzard (ATVI).CVS Health (CVS: -5.5%) exceeded preliminary estimates for revenue for the last quarter, but did not meet expectations for earnings per share. Management confirmed the forecast for EPS for 2022, but lowered the estimate for cash flow, which, however, is higher than the pre-pandemic level.ExpectationsToday, data on consumer inflation in the United States for January will be published. At the moment, this is the main economic indicator that determines the Fed's policy. It is possible that the spread of the omicron strain has restrained the growth of consumer spending, including on services. Preliminary estimates by Bank of America indicate a slowdown in the rate of increase in wholesale prices for used cars in comparison with the levels of 2021, which may smooth out inflationary pressure. Nevertheless, the cost of rent, which is more than a third in the price index, is likely to remain at a high level.On Wednesday, the chairman of the Federal Reserve Bank of Cleveland, Loretta Mester, said that she considers it appropriate to accelerate the pace of QT in the current conditions and supports the sale of mortgage bonds as part of a balance sheet reduction to rebalance the portfolio structure and increase the share of treasury securities. Mester does not deny the negative impact of the omicron strain on business activity in the near future, but expects inflation to smooth out by the end of the year by reducing demand and solving problems in supply chains. The president of the Federal Reserve Bank of Atlanta, Rafael Bostic, has already noted a slowdown in price growth. He also added that macro data and the reaction of the economy to them will be decisive for the Fed in deciding on a more aggressive rate hike. However, according to the official, the regulator is likely to raise it three or four times this year, each time by 25 basis points (bp).At the moment, the market is already laying down five increases in the key rate by 25 bps, while expectations of a 50 bps increase are increasing already in March. A slowdown in the monthly rate of price growth will signal that inflation is under control and will not require strengthening the "hawkish" policy of the Fed.Stock markets in Southeast Asia have demonstrated multidirectional dynamics. The Nikkei Tokyo Stock Exchange index rose 0.42%. China's CSI 300 adjusted by 0.26%, Hong Kong's Hang Seng added 0.38%. The index of the Australian stock Exchange ASX rose by 0.30%. EuroStoxx 50 added 0.18% from the opening of trading.Brent crude futures are trading at $91.55 per barrel. The price of gold is $1,835 per troy ounce.In our opinion, the S&P 500 will hold the upcoming session in the range of 4540-4590 points.MacrostatisticsThe US consumer Price Index (CPI) for January will be published today. Annual price growth is expected to accelerate to 7.3% after 7.0% in December, while monthly rates will be 0.4% after 0.6% in December.Technical pictureThe S&P 500 has approached the level of the 50-day moving average, demonstrating the smoothing of volatility in recent days. The RSI has overcome the 50-point mark, reflecting the short-term predominance of bullish positions. The MACD indicator indicates the continuation of the uptrend, however, the downside risks remain against the background of the publication of macro data. Support for the broad market index remains at the level of the 200-day moving average near 4440 points.In sightToday, the report for October-December 2021 will be published by Twitter (TWTR). According to the consensus forecast, the issuer's revenue will increase to $1.58 billion (+22.5% YoY) with a decrease in adjusted EPS from $0.38 to $0.34. Apple's amended privacy policy should have a less significant impact on Twitter compared to Facebook, since the microblogging service is monetized mainly through advertising aimed at promoting brands, and it is less sensitive to this factor compared to direct response advertising. We believe that after the first ever decline in Facebook's active audience, investors will focus on the dynamics of Twitter's audience, which previously grew at an unsatisfactory pace. Competition for users' attention among social networks is intensifying. The consensus forecast assumes an increase in Twitter's DAU to 218.5 million against 211 million in the last quarter. We believe that the actual expansion of the audience again may not meet expectations. We will also follow the comments of the new CEO of the company, Parag Agrawal, who can indicate the updated vectors of Twitter's ...

Microsoft (MSFT) continues to pleasantly surprise investors by reporting better than market expectations for the fourth quarter.The issuer's revenue grew by 20% (against +22% in the last quarter), surpassing the consensus of analysts and the initial forecast of management by 2% and 2.5%, respectively. Adjusted diluted EPS increased by 22%, exceeding market-wide expectations by 6.9%. According to the results of the last quarter, the dynamics of exchange rates did not affect the financial performance of the company.Cloud products remain the key driver of revenue growth: sales in this segment increased by 32% to $22 billion. Revenue of Productivity & Business Processes increased by 19% YoY on the background of the expansion of the Office Commercial products and Office Consumer products subsegments by 14% and 15%, respectively. The number of Microsoft 365 Consumer subscribers has grown to 56.4 million. Dynamics segment dynamics slowed down slightly (to 29%), while the Dynamics 365 cloud product continues to show high growth rates (+45%), which, according to the CEO, allowed the company to increase its market share in the segment, including thanks to one of the solutions for the metaverse (Connected Spaces). Revenue growth from LinkedIn also remained at a high level (+37% YoY). The monthly number of active Teams users increased to 270 million, while the CEO noted an increase in the share against the indicators of PSTN and IP telephony providers. In particular, about 90% of Fortune 500 companies already use Teams Phone.Intelligent Cloud revenue increased by 26% YoY versus +12% last quarter, Azure growth was 46% due to an increase in the number of data centers. The CEO noted the strong demand for Azure Arc (an environment management solution): the number of users tripled year-on-year. The digital doubles service attracted a major industrial player - Ecolab. The head of Microsoft also stressed the high demand for code/no-code solutions of Power Apps (+161%) and the expansion of the use of the product by Airbus, Centrica, H&M and J&J.The growth of the More Personal Computing segment was 15% due to strong industry trends in the PC market, as well as a significant increase in demand for the new OS (+26%), Surface devices (+8%) and search services. In the gaming segment, the number of Game Pass subscribers has reached 25 million.Despite a slight decrease in cloud gross margin, GAAP operating margin increased by 1 percentage point YoY, to 43%. This is partly due to the postponement of expenses to future periods.Gaidens for the first quarter assumes sales growth of 17.3% due to an increase in commercial orders by 32%. Profit is expected to increase by only 5.4%, partly due to slight margin pressure and a higher tax rate.We assess the issuer's results as strong: revenue growth in key product niches remains stable, margins and profits have significantly exceeded market-wide estimates, management has improved its operating margin forecast for the full fiscal year (within market expectations). However, we believe that in the second half of 2022 - the first half of 2023, Microsoft's operating margin will be under pressure amid the effect of a high base and increased costs.We are raising the target price for MSFT paper to ...

The market the day beforeOn January 26, trading on American stock exchanges again ended with a correction of the main indices. The S&P 500 adjusted by 0.15% to 4,350 points, the Dow Jones lost 0.38%, the Nasdaq added 0.02%. Nine of the 11 sectors included in the broad market index showed a decline in quotations. The most noticeable drop was shown by issuers from the real estate industry (-1.66%), suppliers of raw materials (-1.02%), as well as the industrial sector (-0.82%). IT companies closed in the black (+0.72%) and issuers from the financial sector (+0.27%).Company newsMicrosoft (MSFT: +2.9%) reported strong growth in cloud, gaming and Windows software for the second quarter of 2022 and presented a positive guidance for the next quarter.Texas Instruments (TXN: +2.5%) exceeded the market-wide forecast for revenue and profit. The high demand for semiconductors from automakers and industrial enterprises contributed to the revenue growth.Abbot Labs (ABT: -2.6%) posted strong commercial results for the fourth quarter, exceeding market expectations. At the same time, the forecast for 2022 is quite conservative.ExpectationsFollowing the results of yesterday's meeting, the Fed expectedly kept the key rate at the same level in the range of 0-0.25% and confirmed the current schedule for curtailing the QE program. From February, the volume of asset repurchases will be reduced from $60 billion to $30 billion, the program is scheduled to be completed in early March. During the press conference, Fed Chairman Jerome Powell stressed the strong performance of the labor market and the stability of inflation, which will exceed the target of 2% for at least a year. The majority of FOMC members agreed that the level of full employment in the economy has been reached, and this is a key condition for the start of the base rate hike cycle. According to the derivatives segment of the CME FedWatch service, market participants assume that with a probability of 86%, the regulator will start raising the rate in March. The Fed also published the general principles of reducing the balance sheet, indicating that, according to the expectations of FOMC members, the sale of assets from the regulator's portfolio will begin after an increase in the target range of the rate. The exact parameters of the balance reduction will be discussed at the next meetings.The US regulator noted that a sharp increase in the incidence of COVID-19 in recent months has affected many sectors of the economy, but monetary measures have contributed to an improvement in consumer activity and employment. The epidemic situation will continue to put pressure on the economy in the medium term. It is possible that the Fed will lower its GDP growth forecast in March. Recently, the IMF adjusted down a similar indicator for the global economy for 2022 from 4.9% to 4.4% due to the expected decline in the growth rates of key markets in the United States (from 5.2% to 4.0%) and China (from 5.6% to 4.8%) amid epidemic instability, high inflation and supply chain disruptions.Stock exchanges in Southeast Asia ended trading in the red zone. Tokyo's Nikkei stock Exchange index fell by 3.14%, China's CSI 300 adjusted by 1.96%, Hong Kong's Hang Seng lost 1.99%. The EuroStoxx 50 has dropped 0.63% since the opening of trading.Brent crude futures are trading at $88.91 per barrel. The price of gold is $1814 per troy ounce.In our opinion, the S&P 500 will hold the upcoming session in the range of 4300-4350 points.MacrostatisticsUS GDP data for the fourth quarter of 2021 will be published today. According to the consensus forecast, the growth rate will be 5.5% QoQ.Technical analysisThe S&P 500 remains below the 200-day moving average, although it shows high volatility: during the trading day, the index rose above 4440 points. The RSI has dropped below 30 points and is in the oversold zone, which indicates a strong bearish trend. The MACD indicator indicates the continuation of the correction development and does not show a signal for a reversal. The nearest support has shifted to 4250 points.In sightOn January 27, the results for the first fiscal quarter of 2022 will be published by Apple (AAPL), one of the leaders of the consumer electronics market in the world. According to the consensus forecast of FactSet, the issuer's revenue will grow by 6.6%, to $118.7 billion, with an increase in adjusted diluted EPS by 12.7%, to $1.89. We believe that there is a high probability that the company's financial performance may fall short of market-wide expectations due to the pressure associated with the shortage of semiconductors. In particular, in the last quarter, the lack of these elements led to the fact that Apple lost revenue by $6 billion, and in the current reporting period, the volume of lost sales may increase taking into account the seasonality factor. We believe that the management will keep the focus on the supply of the component base for the iPhone to the detriment of the Mac and iPad, which will have a positive impact on the dynamics of sales of the main product of the IT giant. In our opinion, the assessment of the impact of the shortage of chips on supplies during 2022 will attract particularly close attention of investors. At the same time, we believe that the shortage of components will gradually decrease throughout the year. It is possible that during the conference call, the timing of the launch of solutions based on the 3nm process technology, as well as the launch dates of M2 chips, may be ...

The market the day beforeOn January 21, the main indices on American stock exchanges continued to decline. The S&P 500 dropped 1.89% to 4,483 points, the Nasdaq fell 2.72%, and the Dow Jones lost 1.3%. In the green zone, only the sector of non-cyclical consumer goods closed (+0.02%) due to positive dynamics in the shares of food companies. The outsiders were telecoms (-3.88%) due to the strong negative reaction of investors to the quarterly report of Netflix (NFLX), as well as issuers from the cyclical consumer goods industry (-3.1%) against the background of declining quotations of Amazon (AMZN) and Tesla (TSLA).Company newsThe Netflix report (NFLX: -21.8%) for the fourth quarter of 2021 greatly disappointed investors due to weak forecasts regarding the pace of audience expansion.SunPower (SPWR: -17%) announced the identification of a problem with cracks in some connectors of solar panels. It is possible that the company will have to reflect in the report for the fourth quarter of 2021 additional expenses in the amount of approximately $ 27 million.Intuitive Surgical (ISRG: -7.9%) reported better than expected for the fourth quarter, but management warned that the increase in hospitalizations of patients with COVID-19 puts pressure on the number of operations and procedures.ExpectationsMarket participants are taking a wait-and-see position ahead of the Fed meeting on Wednesday. The main issue is the potential number of rate increases in 2022. It is expected that the Fed may raise it at least four times. The regulator's decision will largely depend on macro statistics, especially inflation. In particular, disruptions in supply chains, rising wages and rents, as well as high short-term inflation expectations are in favor of tightening monetary policy. At the same time, the WSJ noted that, unlike previous cycles of tightening of the PREP, this time the Fed may be more cautious about making forecasts about future increases, given how uncertain the labor market and inflation indicators may react to such comments, which contributes to increased stock market volatility.The number of detected COVID-19 cases in the United States continues to be held near 800 thousand per day, and experts say that the peak of infections may be reached. At the same time, hospitalizations are growing at a slower rate compared to the detected cases of COVID-19, which may indicate a lower virulence of the omicron strain compared to earlier variants.Stock markets in Southeast Asia showed mixed dynamics. Japan's Nikkei rose by 0.24%, China's CSI 300 strengthened by 0.16%, Hong Kong's Hang Seng declined by 1.24%. EuroStoxx 50 has been losing 2.24% since the opening of trading.Brent crude futures are trading at $87.7 per barrel. The price of gold is around $1,839 per troy ounce.In our opinion, the S&P 500 will hold the upcoming session in the range of 4340-4390 points.MacrostatisticsNo significant macro statistics are expected to be published today.Technical pictureThe S&P 500 dropped below the level of the 200-day moving average, to 4,400 points, breaking through the lower boundary of the ascending channel. The RSI is in the oversold zone, below 30 points, which indicates a strong "bearish" trend. The MACD indicator indicates the continuation of the correction development, without showing signs of a reversal. The nearest support is located at the level of 4,300 points.In sightOn January 25, 2022, the report for the fourth quarter will be presented by the world's largest software developer Microsoft (MSFT). According to the consensus forecast of Factset, the issuer's revenue will grow by 17.6%, to $50.65 billion, with an increase in adjusted diluted EPS by 14%, to $2.31. We believe that the drivers that provided growth in previous quarters will remain relevant. In particular, the Productivity & Business Processes segment (office, application solutions and LinkedIn) has been maintaining a strong momentum for expansion in recent months, and the Intelligent Cloud direction (server products and Azure) demonstrates confident sales dynamics, including thanks to specialized industrial products. More Personal Computing also maintains a strong position thanks to good reviews about the new OS and improved Intel CPU performance on it. However, interruptions in the supply of components are likely to put pressure on PC sales, which will limit demand for the OS. Market participants will focus on two key aspects of the report: revenue forecasts for the next quarter and year (if they are presented), as well as margin levels and estimates of profitability dynamics in the future. A deterioration in the growth forecasts of one of the indicators may put significant pressure on the issuer's quotes. We also expect more detailed information about the recently announced acquisition of Activision Blizzard.On January 27, after the market closes, the report for the first fiscal quarter of 2022 will be presented by the operator of the Visa (V) international payment system. According to FactSet's forecast, the company will report net earnings per share of $1.71 (+19.7% YoY). Net revenue may grow by 19.3% YoY due to high consumer activity during the winter holidays and reach $6.78 billion. In 2021, the key drivers of the growth of the corporation's financial metrics, as with other payment systems, were the recovery of consumer spending and cross-border transactions due to the improvement of the macroeconomic situation and the resumption of international tourism. We believe that these factors will continue to support Visa's business this year as the consequences of the pandemic are overcome, disruptions in the supply of goods are eased and tourism activity increases. It should also be noted that the recently arisen market risk associated with the suspension of Visa credit card acceptance by Amazon retailer in the UK has been previously settled, as the companies have reached an agreement that their partnership in this segment will continue.Also on January 27, the results for the fourth quarter will be published by Apple (AAPL), one of the leaders of the consumer electronics market in the world. According to the consensus forecast of Factset, the issuer's revenue will grow by 6.6%, to $118.7 billion, with an increase in adjusted diluted EPS by 12.7%, to $1.89. We believe that there is a high probability that the company's financial performance may fall short of market-wide expectations due to the pressure associated with the shortage of semiconductors. In particular, in the last quarter, the lack of these elements led to the fact that Apple lost revenue by $ 6 billion, and in the current reporting period, the volume of lost sales may increase taking into account the seasonality factor. We believe that the management will keep the focus on the supply of the component base for the iPhone to the detriment of the Mac and iPad, which will have a positive impact on the dynamics of sales of the main product of the IT giant. In our opinion, the assessment of the impact of the shortage of chips on supplies during 2022 will attract particularly close attention of investors. At the same time, we believe that the shortage of components will gradually decrease throughout the year. It is possible that during the conference call, the timing of the launch of solutions based on the 3nm process technology, as well as the launch dates of M2 chips, may be ...

The market the day beforeOn January 18, the main American stock indexes ended trading in the red zone. The S&P 500 dropped 1.84% to 4,577 points, the Dow Jones lost 1.51%, the Nasdaq showed a stronger drop, down 2.6%. Almost all sectors included in the S&P 500 closed in the red. The exception was the issuers of the energy industry (+0.40%) against the background of the continuing rise in oil prices. Technology companies (-2.49%) and telecoms (-1.99%) looked worse than the market.Company newsMicrosoft (MSFT: -2.4%) announced the takeover of Activision Blizzard (ATVI: +25.9%).Unilever PLC securities (UL: -14.44%) continue to fall on the news of the company's plans to buy assets of GlaxoSmithKline plc (GSK: +2.97%).The US government is checking Alibaba Group Holding Limited's (BABA: -2.26%) cloud business for threats to national security.ExpectationsInvestors fear the acceleration of inflation, as the active spread of the omicron strain exacerbates problems in supply chains and increases the shortage of labor. For example, some companies that published results for the fourth quarter indicated in their reports that the forced increase in employee salaries could become one of the key risks for financial indicators in 2022 and eventually prevent them from earning record profits.Against this background, there is a steady increase in Treasury bond yields. This indicates growing expectations that the Fed will raise rates four times this year, including a possible increase of 50 basis points (bp) in March in order to curb inflation.The yield of two-year treasuries increased by 8 bps, to 1.04%, exceeding 1% for the first time since 2020. The same indicator for "ten-year-olds" jumped by 6 bps, to 1.87%, and the yield of 30-year securities rose to 2.18%. Concerns about inflation continue to be fueled by an increase in oil prices, which have shown an increase for four consecutive weeks. In our opinion, black gold will continue to rise in price in the coming days amid increasing tensions in the Middle East.Most of the sites in Southeast Asia ended trading on January 18 in the red zone. China's CSI 300 declined by 0.68%, Japan's Nikkei 225 fell by 2.80%, Hong Kong's Hang Seng lost 0.17%. EuroStoxx 50 has been adjusted by 0.30% since the opening of the session.Brent crude futures are quoted at $87.51 per barrel. Gold is trading at $1812.3 per troy ounce.In our opinion, the S&P 500 will hold the upcoming session in the range of 4540-4590 points.MacrostatisticsData on the number of construction permits issued in the United States for December will be released today (forecast: 1701 million vs. 1717 million in November).Technical pictureThe S&P 500 continues to fall towards the lower boundary of the ascending channel. The nearest resistance for the index is at the level of 4533 points. The RSI is also moving below 50 points, falling closer to the oversold zone, the MACD signals a possible continuation of the downward trend, which together indicates a correction of the indices in the upcoming ...

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 indexRead more: Dow Theory: Six basic principles of Technical analysisIn 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 ...