However, many financial market newswires suggest those positive corporate figures should be considered only in line with the U.S. Federal Reserve (Fed) meeting on Wednesday. Uncertainties surrounding hawkish signals from the Fed may be negatively peppered by increasing geopolitical tensions along the Russian and Ukrainian border, in which NATO countries are also involved.
The Fed hints "at any plan of how they'll use the balance sheet to reduce accommodation that is going to be huge", according to John Luke Tyner, Portfolio Manager at Aptus Capital Advisors, while “rising interest rates might impact a company that doesn't have earnings, but for companies like Microsoft or like Apple and some of the really high-quality growth names, one and a half percent and 2% on the 10-year yield doesn't really matter.”
Such considerations may be found to be quite reasonable. Nevertheless, even Microsoft's magnificent report, released on Tuesday with its all-time record EPS of $2.48 and $51.73 billion revenue against only $2.31 EPS and $50.65 billion revenue expected. The first reaction to Microsoft’s after hours report was a surprising decline in Microsoft's share prices by almost 5% from $288.5 to $274.5 per share. However, later on during pre-market trading on Wednesday afternoon, Microsoft shares rose to $300.
Whether this happened due to the general bounce of global stock exchanges to the upside direction on Wednesday, or if it is just a fleeting story, remains a controversial issue. Anyway, buzzing reports no doubt are painting the total market sentiment picture, and are not less important than the Fed’s guidelines. These reports are expected to feature Tesla and Apple. Visa and Mastercard global payment systems are also delivering their Q4 reports this week that could, to large extent, determine the overall market sentiment.
Among published reports, American Express could be highlighted as it shares soared 8.92% the day after the company reported much better-than-expected EPS of $2.18 per share with $12.15 billion revenue. The numbers came out well above Wall Street's estimates of EPS at just $1.87 and revenues – at $11.5 billion.
IBM Q4 revenues rose 6.5% to $16.7 billion, excluding infrastructure services business, now Kyndryl. Analysts have expected revenues of Big Blue at $15.96 billion. But the company beat these expectations as cloud business revenues jumped by 16% to $6.2 billion. Despite a clearly successful report, stocks lost almost 7% after it was published. Only after the second upside wave began prices rose by 5.65%.
Thus, the current market crowd sentiment, even in relation to large and well-known companies, remains mixed taking into account contradictory regulatory factors and geopolitical background.
Alex Boltyan, senior analyst of Esperio company