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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.
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.
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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