Microsoft exceeds the $ 1 trillion threshold

Microsoft Corporation (MSFT) has given way to a $ 1 trillion market capitalization threshold today. Only Apple Inc. (AAPL) and Amazon.com, Inc. (AMZN) have already achieved this feat.

To put this impression into perspective, if you compare MSFT's market capitalization to the annual gross domestic product (GDP) of any country in the world, it would rank 17th in the world, just behind Indonesia and just before the countries. (According to the 2018 survey of the International Monetary Fund).

Microsoft surpbaded this monumental hurdle by jumping to 3.31% on Thursday, after breaking earnings and earnings forecasts for Wall Street when it released its figures Wednesday night after the market closed. The company beat revenue forecasts of $ 740 million and earnings of $ 0.14 per share, to reach $ 30.6 billion and $ 1.14 per share, respectively.

During the company's teleconference, management also excited investors by stating that it was expecting double-digit growth in its revenue and operating income for the company. This is an impressive achievement for a company of this size.

Perhaps the most exciting aspect of this uptrend is that it shows that there is still a lot of positive momentum in some segments of the economy – like investing in technology – that could keep the market going up. in 2019.

If Microsoft and Facebook, Inc. (FB) – which rose 5.85% today after beating non-GAAP earnings estimates of $ 0.27 per share – were the only component of the S & P 500 index to show a result in the past 24 hours, the index would likely trade to new highs all the time.

Unfortunately for those looking for a hike in the index, the S & P 500 Index was affected by negative earnings surprises from 3M Company (MMM), United Parcel Service, Inc. (UPS) and Altria Group, Inc. (MO). 3M lost 12.95% on Thursday after losing earnings guidance of $ 0.27 per share, UPS lost 8.13% after missing earnings forecast of $ 0.04 per share, and Altria dropped 6.03 % after forecast of missing profits of $ 0.03 per share. Maybe tomorrow will be the lucky day of the S & P 500, where it will finally be able to overtake.

Fortunately for the Nasdaq composite, 3M, UPS and Altria do not have to worry because they are all listed on the NYSE. This left the techno-heavy index free to increase. The Nasdaq reached a new intra-day high of 8,151.8 before closing at 8,118.7.

The energy sector is experiencing internal divergences between independent oil exploration companies and oil refining companies as the crack gap continues to widen. Crack propagation follows the difference between the input price in the petroleum refining process – crude oil – and the process yield – gasoline.

When the crack margin becomes narrower, this indicates that the price of crude oil is becoming more expensive compared to the price of gasoline. Conversely, when the crack margin widens, this indicates that the price of crude oil is becoming cheaper relative to the price of gasoline.

Currently, crack propagation is widening. This is great news for oil refiners – such as Valero Energy Corporation (VLO), HollyFrontier Corporation (HFC) and Marathon Petroleum Corporation (MPC) – as it means their profit margins will expand as they pay a relatively lower price for the market. the crude oil that they buy and can claim a relatively higher price for the gasoline that they sell.

A wider spread of cracks is not good news for independent oil exploration companies – such as Apache Corporation (APA), Devon Energy Corporation (DVN) and Pioneer Natural Resources Company (PXD) – as this means that the product that they sell, crude oil, does not order as a high price.

If this performance gap continues as the spread widens, the energy sector may continue to lag behind the technology and financial sectors.

The S & P 500 continues to consolidate just below its historic high, but the index has all the potential needed to outperform. It seems that the right combination of results announcements (more results than missing results) should be taken to overcome it.

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