Microsoft and Alphabet Earnings Soar, Apple Figures Next

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Principal Points

• Microsoft and Google’s Alphabet surpass analyst estimates on third-quarter earnings figures
• Apple and Amazon deliver results Thursday; stocks move to new highs, Bitcoin steady

Earnings Season Arrives in Full Swing with Big Tech

The earnings season is already here and quickly shifting gears. Major companies are posting record growth despite supply-chain challenges, inflation pressures and shaky short-term outlook. That said, Microsoft and Google parent Alphabet blew past analyst estimates Tuesday after the market closed.

Together, the two Big Tech giants posted revenue of $110.4bn for the third quarter or growth of 33% over the past year. On the one hand, Microsoft reported $45.3bn in revenue for the quarter ended September. On the other, Alphabet’s quarterly revenue arrived at $65.12bn.

Overall, the combined profit for the tech duo arrived at $41.53 billion for the third quarter. In more detail, $20.5 billion in profit went to Microsoft, while Google’s Alphabet collected $21.03 billion in operating income.

These spectacular gains resulted from solid demand for cloud computing amid the ongoing pandemic restrictions and remote working.

“Our consistent investment to support long-term growth is reflected in our strong financial performance with sales of $ 65.1 billion in the quarter,” Google CFO Ruth Porat said.

What’s the Big Picture for Traders?

Stocks in the US and Europe have been marching higher in recent weeks. Moreover, on Tuesday, the S&P500 and the Dow Jones Industrial Average entered into record territory. Indeed, the blue-chip benchmarks have been consistently climbing this week as the earnings season turns out to be stronger than expected.

In the global financial markets, major bourses across Europe are also performing to the upside. Additionally, the region-wide Stoxx 600 is just inches away from a fresh all-time high.

Meanwhile, bitcoin and the broader cryptocurrency markets are trading lower on Wednesday. The original cryptocurrency was down in the early hours of today’s session. In more detail, bitcoin hovers near $60,000 per coin, a drop of about 5% on the day.

Over the past few days, the price of bitcoin eased from its record high set last week. However, crypto backers remain confident the digital asset market is still in its early stages of adoption and development.

What to Watch in the Markets?

Apple and Amazon, two other Big Tech behemoths worth north of $1 trillion, are slated to report third-quarter results on Thursday. Both of them are predicted to release strong record-beating performance for the September trimester.

However, investors will be cautious in the session leading up to Amazon’s earnings report. The e-commerce giant said in its previous-quarter report it will be difficult to sustain the growth momentum of 2020. Indeed, the past year marked an increase in shopping from home as global economies were under lockdowns.

Economic Data Coming Up Today (EST times)

Economic data today will be focused on Canada. More precisely, the Bank of Canada will announce its interest rate decision at 10:00 am. Along with it, the central bank will release its monetary policy report, followed by a press conference.

The activity could create heightened volatility in the Canadian dollar, presenting trading opportunities for forex traders.

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