Microsoft’s shadow, Tesla’s results, Adani’s claims

Β© Reuters.

By Geoffrey Smith — Shares of Microsoft are poised to open lower after reports that even the fastest-growing parts of its empire are suffering from weak demand. Then Tesla, Boeing, NextEra Energy and Abbott went public, another big day for gains. Germany agrees to break free from eight decades of pacifism and send modern battle tanks to the world’s hottest war zone. Short sellers Hindenburg Research are going after India’s richest man Gautam Adani, slashing the value of his group by nearly $10 billion. Here’s what you need to know in the financial markets on Wednesday, January 25.

1. As Microsoft goes, the US goes….

Microsoft (NASDAQ:) reinforced the impression that 2023 will be a tough year for business. The software giant, whose broad reach across the professional and consumer segments of the economy makes it a decent proxy for the rest of USA Inc, said revenue rose at the slowest pace in six years in the three months to December. its fiscal year.

Adjusted earnings were slightly better than expected, but included a $1.2 billion restructuring charge related to 10,000 job cuts announced last week. But analysts were more interested in revenue, where weaker sales of Windows and Xbox-related services were offset by COVID-related factors. The company even expects a significant slowdown this year in its cloud services division, which has been its best-performing segment in recent quarters.

Microsoft shares fell about 2.5% in premarket trading.

2. Tesla will follow

Tesla (NASDAQ: ) will report results after the closing bell, and will face the toughest challenge in the auto sector yet to justify an all-time high valuation.

The company has lost nearly half its value since its last quarterly update as CEO Elon Musk repeatedly sold shares to finance his failed acquisition of Twitter (NYSE:). Musk took the witness stand in Tuesday’s trial, where he is accused of intentionally misleading investors by tweeting about a possible takeover in 2018. He told the court he believed there was funding for the takeover.

Tesla is expected to report earnings of $1.15 in the final quarter of last year, down from $2.54 a year earlier due to production disruptions and price cuts.

3. Stocks should open lower in Microsoft’s shadow; Abbott, IBM and Boeing will announce the results later

US stock markets are expected to open lower later as Microsoft’s weak outlook casts a long shadow over the rest of the market.

At 1:30 p.m., prices were down 160 points or 0.5%. It fell 0.7% and 1.2%, with technology stocks particularly under pressure.

Sentiment was not helped by news that the Justice Department accused Alphabet (NASDAQ: ) of abusing its dominant position in the online advertising market, significantly expanding existing antitrust enforcement against the Google owner.

Other stocks to report on Wednesday include Boeing ( NYSE πŸ™‚ ), NextEra Energy ( NYSE πŸ™‚ IBM (NYSE:), Lonza (SIX:) Group (OTC:), Abbott Laboratories (NYSE: , CSX (NASDAQ: and Norfolk South (NYSE: ), Freeport-McMoRan (NYSE: ) and Lam Research (NASDAQ: ), among others.

4. Scholz frees the Tigers

German Chancellor Olaf Scholz has officially approved the delivery of Leopard 2 main battle tanks to Ukraine, a day after reports that the US will include its own Abrams M1 main battle tank in future military aid programs.

The decision was heavily criticized by Moscow, which it saw as an escalation of the conflict, but was warmly welcomed by Germany’s NATO allies, who were angered by Germany’s reluctance to fill an important gap in its Ukrainian arsenal.

Germany’s change of heart is an important stage in the evolution of its foreign policy, which prevents it from playing a prominent role in military affairs after World War II. The move would emphasize Moscow’s reactive function given its previous threats to use nuclear weapons on the battlefield.

This decision, ironically, coincides with the birthday of Ukrainian President Volodymyr Zelensky.

5. Addressing the claims of short sellers, Adani denies the claims

India’s richest man Gautam Adani’s expanding empire has been rocked by a report by short-sellers Hindenburg Research accusing him of various accounting tricks to inflate the value of his portfolio companies.

Lighthouse holding Adani Enterprises (NS πŸ™‚ Mumbai fell 1.1%, while the group’s ports and shipping arm lost more than 6%.

According to the Financial Times, Adani-related companies lost nearly $9 billion in market capitalization due to the report, which the group’s chief financial officer described as “a damaging combination of selective disinformation and outdated, unsubstantiated and discredited claims.”

Adani’s net worth is estimated at about $118 billion, most of which is related to investments in fossil fuels and renewable energy.

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