$Microsoft (MSFT.US)$ $E-mini NASDAQ 100 Futures (JUN6) (NQmain.US)$ Microsoft's EPS exceeded expectations by 9%, and it's merely catching up now—this is quite a pleasant surprise. Based on the current earnings outlook, cloud services are expected to maintain growth this quarter. The next quarter is projected at $2.65, with a full-year 2023 estimate of $9.65. The stock price should stay around $300, with a possible range of $280-$320.
The market remains divided over whether the EPS has bottomed out or relatively stabilized. However, most of this quarter’s earnings reports have exceeded expectations (albeit lowered ones), suggesting that the Fed’s rate hike cycle may not be limited to just the May increase. Today’s release of March new home sales data shows resilience in housing prices, indirectly reflecting sticky rental inflation. The technology, services, and traditional energy sectors continue to withstand high-interest rate pressures, while the banking and renewable energy sectors are beginning to show signs of fatigue. Under these conditions, an interest rate cut this year is highly unlikely.