To The Moon

On Wed, 10 May 2023 evening I was keeping virgil by my mobile phone, like everyone else.

Just so that when the news of US April CPI is out, I would know “immediately”.

When the news flashed across my mobile screen, I heaved a sigh of “relief”. CPI was “4.9%”, 0.01% “higher” than my personal forecast (click to read my post! and give a “LIKe” ok, tks!).

It was a “memorable” moment because this is the first time in two years that US’s CPI comes in “sub 5%”. Deserves a celebration, no?

Strangely enough, the market did not rally as I had hoped it would.

By the time market closed:

• DJIA was down -30.48 (-0.09%) to 33,531.33.

• S&P 500 was the only index upped marginally +18.47 (+0.45%) to 4,137.64). Best performer.

• Nasdaq was flat (uninched).

Some have attributed the non-celebratory stance to:

1. US Treasury going “broke” soon due to Debt Limit breached crisis as the main sentiments dampener.

2. New York Fed President’s John Williams off-the-cuff remark on Wednesday, that inflation remains "too high"; sparking a fear that the Fed might still harbour the thoughts to raise interest again was another possible factor.

3. Thu, 11 May release of US’s Producer Price Index (PPI) will be the next “litmus test” on US inflation situation. Perhaps when it registers a decline as well, maybe just maybe then the market will rejoice and celebrate? Will know in a few hours time.

Does It Mean That Going Into Q2 2023, There Is Really Nothing Worth Investing ?

On the contrary, based on my homework I think Technology stock $Microsoft(MSFT)$ is worth a look and consider now before its runaway price materializes.

(1) Latest Quarterly Earnings

• Its Revenue coming in at $52.86 Billion (top line) exceeded wall street’s expectations.

• Its Net Income of $18.3 Billion (bottom line) exceeded wall street’s expectations.

• In current quarterly earnings reporting season, there are not too many companies reporting both top and bottom lines beating wall street’s expectations. Microsoft is but of a handful.

• Microsoft "Azure and other cloud services" revenue grew at a rapid +27% YoY rate, that is faster than $Amazon.com(AMZN)$ AWS at +16%.

• At its current growth rate, Azure is poised to surpass AWS as Market leader in the Cloud space.

• And Microsoft is poised to become the largest company (by market capitalization) eventually. It is still too early to tell but its never too early to dream big, no ?

• > 90% of Fortune 500 have installed Windows 11 or are trialing the software. Microsoft still has approx 74% market share in the operating system (OS) industry.

• With its investment in OpenAI bearing fruits and Microsoft’s integration of AI into its multitude of apps (used by 36,000 organizations - using AI in its Power Platform), it is a rosy “future” in the horizon. Agree.

Is there any reason/s not to like Microsoft ? My only question is “when” to buy-in?

• Do you think the Producer Price Index (PPI) will come in lower as well, just like CPI?

• Do you think you will add Microsoft to your portfolio when the time is right?

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