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US stock market report – Microsoft & Alphabet earnings in focus

Picture of Drew Meredith, CFP
Drew Meredith, CFP
Picture of Drew Meredith, CFP

Drew Meredith, CFP

Drew Meredith is one of the founders of Wattle Partners. He is an experienced financial and investment adviser with expertise in self-managed superannuation funds, superannuation strategies, investment analysis and portfolio construction. Drew is a Partner at Wattle Partners.
More analysis

US sharemarkets weakened overnight as earnings season gathered steam, with inflation, higher input and raw materials costs beginning to worry investors.

The Dow Jones was weakest, down 0.5% while the Nasdaq fell 0.3% despite big tech reporting healthy profits.

President Biden continued his sweeping tax reform agenda, highlighting an increased top marginal tax rate for the rich as he seeks to fund tax cuts and free child care for the low and middle-income earners.

Cloud & Xbox a boon for Microsoft

Shares in Microsoft (NASDAQ: MSFT) fell despite beating expectations for a ninth straight quarter and reporting a 19% increase in sales.

Microsoft’s Azure platform, used by businesses large and small, saw sales increase 50% as the digitalisation trend continues, whilst cloud computing sales continued at an incredible 33% as they continue to gain market share. This led to a doubling of profit to US$15.5 billion.

Xbox and personal computing sales remain capped by the global chip shortage, yet the former jumped 232% following the latest platform release in late 2020.

Google powers ahead

Alphabet (NASDAQ: GOOGL) is looking to be one of the biggest beneficiaries of the pandemic reopening after the company reported a 35% increase in quarterly revenue to US$45.6 billion as advertising sales boom in a post-COVID, consumer-led economy.

Impressively, YouTube ads jumped 49% compared to the year-ago period to US$6 million, while the Google Cloud business reported 46% revenue growth to US$4 billion. Alphabet stock finished 3.0% higher on the news.

US stock market movers

In the thick of earnings season, here’s how other popular US stocks performed during Wednesday’s session:

Back home on the ASX, the S&P/ASX 200 (ASX: XJO) is expected to open higher on Thursday despite the weak lead from US markets. For all the latest, check out Rask Media’s daily ASX 200 report.

The Golden Rules of Investing

We might be experts in retirement, but with combined financial advice experience of 35+ years, we’ve nearly seen it all. 

In mid-2023, our senior team at Wattle Partners Financial Planning put the finishing touches on a brand-new report “The Golden Rules of Investing“.

In this free report, we outline the key principles that determine all of the portfolio construction and investment decisions of Wattle Partners. Collated over decades, this paper should be seen as a work-in-progress, constantly under review in light of the ever-evolving nature of markets. 

You’ll find the free report on my Author page. Simply click the button below to view the Golden Rules.

Get the golden rules

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

At the time of publishing, the author of this article does not have a financial or commercial interest in any of the companies mentioned.

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Wattle Partners is a financial advice firm, servicing clients around Australia, specialising in retirement planning (pre and post retirement). 

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