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Trader's Diary

Economic calendar

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Definición de términos:
Ganancias

Earnings

refer to the profits or net income generated by a company during a specific period.

  • Earnings are a measure of a company's financial performance and are often reported on a quarterly or annual basis.

  • Positive earnings indicate that a company has made a profit, while negative earnings indicate a loss.

  • Earnings can be influenced by various factors, such as revenue, expenses, taxes, and other financial activities.

Code

The code is a unique identifier assigned to a company's stock by the stock exchange where it is listed. It is used to identify the stock in trading and other financial transactions.

Actual

Actual refers to the real or current value or result of something. In the context of IPOs, actual can refer to the actual price or number of shares sold in the IPO, as opposed to the estimated price or number of shares.

Estimate

Estimate refers to a prediction or approximation of something, such as the expected price or number of shares in an IPO. Estimates are often made by investment banks and analysts based on market demand and other factors.

Difference

Difference refers to the numerical or percentage variance between two values. In the context of IPOs, difference can refer to the variance between the estimated and actual price or number of shares sold in the IPO.

Percent

Percent refers to a fraction of 100, often used to express a proportion or rate. In the context of IPOs, percent can be used to express the difference between the estimated and actual price or number of shares sold as a percentage of the estimated value.

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OPV

IPOs (Initial Public Offerings):

An IPO occurs when a private company sells its stock to the public for the first time to raise capital or money.

The money raised from an IPO can be used for various purposes, such as paying down debt, investing in the company's long-term health, research and development, expanding into new product lines, or purchasing fixed assets.

During the IPO process, the equity shares of private investors

convert into publicly owned shares of the new entity, and early investors may sell their stock once the company's shares begin trading.

The chief benefit of an IPO is to help the company raise money and gain access to the capital markets, allowing for expansion and increasing credibility.

Code

The code is a unique identifier assigned to a company's stock by the stock exchange where it is listed. It is used to identify the stock in trading and other financial transactions.

Name

The name is the official name of the company whose shares are being offered in the IPO.

Exchange

The exchange is the stock exchange where the company's shares are listed and traded. Examples of stock exchanges include the New York Stock Exchange (NYSE) and the Nasdaq.

Currency

The currency is the type of currency in which the company's shares are priced and traded. This can vary depending on the country and stock exchange where the company is listed.

Start date

The start date is the date on which the company's shares begin trading on the stock exchange after the IPO.

Offer price

The offer price is the price at which the company's shares are initially offered to the public in the IPO. This price is set by the company and its underwriters based on market demand and other factors.

Shares

Shares refer to the units of ownership in the company that are being offered to the public in the IPO. These shares can be bought and sold on the stock exchange after the IPO.

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Splits

Splits (Stock Splits):

A stock split occurs when a company increases the number of its outstanding shares of stock to boost the stock's liquidity.

In a stock split, the number of shares outstanding increases by a specific multiple, but the total dollar value of all shares remains the same.

Companies often choose to split their stock to lower its trading price to a more comfortable range for most investors and increase the liquidity of trading in its shares.

For example, if a company decides to split its stock 2-for-1, the number of shares outstanding would double, while the share price would be halved.

Code

The code is a unique identifier assigned to a company's stock by the stock exchange where it is listed. It is used to identify the stock in trading and other financial transactions.

Split date

The split date refers to the date on which the stock split takes effect. It is the date when the new shares resulting from the split are distributed to existing shareholders. Optionable

Optionable refers to whether the stock is eligible to be used as an underlying asset for options contracts. If a stock is optionable, it means that options can be traded on that stock.

Old shares

Old shares refer to the existing shares of a company before a stock split takes place. These are the shares that will be exchanged for the new shares resulting from the split.

New shares

New shares are the additional shares that are issued to existing shareholders as a result of a stock split. The number of new shares is determined by the split ratio, such as 2-for-1 or 3-for-2, where shareholders receive a certain number of new shares for each old share they own.

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Microsoft Earnings: A Short-Term Stock Drop or Should We Prepare for a Correction?

Fecha: 31.7.2024

In my weekend fundamental analysis of the giants of the technology industry, I took special note of Microsoft's recent announcement of fourth fiscal quarter results when deciding on my portfolio. This past Tuesday after the market closed, the company reported earnings that beat Wall Street's expectations. The company reported earnings per share (EPS) of $2.95 on revenue of $64.7 billion, slightly above the consensus estimate of $2.94 EPS on revenue of $64.5 billion. By comparison, in the same period last year, Microsoft reported earnings per share of $2.69 on revenue of $56.2 billion.

Cloud Services segment performance

 

Not all indicators from the earnings report were positive, however. Microsoft's cloud segment, particularly revenue from the Intelligent Cloud, which includes Azure services, fell slightly short of expectations. The segment reported $28.5 billion in revenue. The company reported a revenue of USD 28.7 billion, compared to expectations of USD 28.7 billion for the same period last year. This may have been partly due to a more than 7%[1] decline in Microsoft shares in after-hours trading.*

 

Market impact and contribution of artificial intelligence

 

Despite the downturn in the cloud services segment, Microsoft's overall revenue grew impressively by 21% year-over-year, with Intelligent Cloud revenue growing by 19%. Further, it is noteworthy that AI services contributed 8 percentage points to the growth of Azure and other cloud services, which grew by 29% overall. This is in line with broader market trends where AI capabilities are becoming a key battleground for technology companies.

 

Investment strategy considerations

 

Having analyzed these fundamentals for Microsoft, I decided to move on to the technical side, as I consider it an equally important part of analyzing companies. In terms of daily market structures (on the chart, the individual points are shown by blue lines), the price is in a bullish trend. I see the decline after the close of regular trading as, for now, just a liquidity pick needed to pair orders from commercial market participants. To maintain my bullish sentiment, it will be necessary for the price on the daily timeframe not to close below the higher low of this market structure.

 

MSFT_2024-07-31_15-19-45_5877c

Development of Microsoft's share price from the perspective of a four-hour time frame

 

Conclusion

 

In conclusion, while the immediate market reaction to Microsoft's results may be negative, the company's core strengths in AI and cloud growth remain strong year-over-year. As an investor, I remain cautiously optimistic and am prepared to take advantage of adjustments that could result from these market moves.

 

* Past performance is no guarantee of future results.

[1] the development of Microsoft shares over the last five years: https://tradingeconomics.com/msft:us

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