Daily Markets: Soft Guidance and Tepid Spending Weigh on Stocks

Todays Big Picture

A number of Asia-Pacific equity markets remain closed for the Lunar New Year holiday, including China, Hong Kong, and Taiwan. The markets that were open today saw mixed results as Australias ASX All Ordinaries declined 0.29% and Indias Sensex fell 1.27% on debt concerns of one of Indias large conglomerates. Japans Nikkei rose 0.35%, and South Koreas KOSPI gained 1.39% led by Commercial Services, despite Technology names coming under pressure. By mid-day trading, European equity indices are down across the board, and U.S. futures point to lower market open.

With a relatively benign set of economic data releases today, corporate earnings will be the likely driver of todays market. Leading futures lower this morning was the softer-than-expected guidance from Microsoft (MSFT) and comments from other companies about cautious spending by customers due to global economic uncertainty.

Given that uncertainty and what it means for revenue and EPS expectations in 1H 2023, the stock market is poised to be choppy in the near term as investors parse upcoming earnings reports, piecing together a clearer picture of what lies ahead. Wed remind readers that not all parts of the economy move in the same direction all at once, something that is also generally true for the stock market.