WARNING: Microsoft Just Said More Market Pain Is Coming. Plan NOW

by | Jun 3, 2022 | Market Outlook, Stocks

 

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We discussed just last week how shocking and abnormal it was for Snapchat’s parent company to suddenly guide down for the rest of the year — out of the blue a month after reporting earnings. 

I said then we should expect more of this… And now Microsoft has issued a weak outlook

To recap, Snap Inc. (NYSE: SNAP) announced late on May 23 it will miss revenue targets and adjusted earnings for the second quarter. 

The news of course sent shares plummeting 40% in the already beaten-down stock, yanking the entire market down with it the next day. 

snapchat stock chart (microsoft issues weak guidance)

I said at the time that we should get used to this, even though it is super unusual for a company to do this a month after reporting earnings. Because that tells us that everything has fallen apart in just a month’s time. 

And now, big bad Microsoft just did the same thing…

Microsoft Issues Weak Outlook — and It Won’t Be the Last

Microsoft issued a weak outlook for its fiscal fourth quarter, slashing its forecast from a range of $52.4 billion to $53.2 billion down to a range of $51.94 billion to $52.74.

Bill Gates’ behemoth PC company also cut its earnings per share projections from a range of $2.28 to $2.35 down to a range of $2.24 to $2.32. 

Meanwhile, Wall Street expects Q4 revenue of $52.87 billion and $2.33 EPS. So the revision wasn’t drastic…

Shares initially sold off, almost $10 a pop before closing over $1 higher than before the news hit as the market caught a nice bid Thursday as you’ll see in this daily chart.

microsoft stock chart (microsoft issues weak guidance)

But the big takeaway here is the macroeconomic environment these companies are operating in is collapsing — and fast… So it’s time to load up on shorts. 

Check out my short video above and let’s chat about forming a trading plan that allows you to fight with both hands after Microsoft issued a weak outlook.

Are there any topics you’d like to see me cover or questions you’d like answered? Send me an email at jeff@joyofthetrade.com! And be sure to stay ahead of the markets by subscribing to our YouTube channel and our Instagram page for all of the latest!

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WRITTEN BY<br>Jeff Zananiri

WRITTEN BY
Jeff Zananiri

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