Boeing And Microsoft Earnings Reviews

Boeing & Microsoft - Big Shift In Rate Hike Expectations

Fed has moved with the whims of the stock market for the first time since Powell became chairperson. The Fed became dovish in late December. That helped spark the rally since then. Fed’s statement reflected this new guidance. If the Fed would have made a smaller shift, it would have been slightly more hawkish than where it was recently. But still more dovish than December. 

Numerically, the Fed seems to have guided for 0 or maybe 1 hike in 2019. It didn’t consider the amazing rally this year at all when writing this statement.

There is now a 74.4% chance the Fed keeps rates the same this year. That’s similar to where it has been recently. The shift is that there is now no chance of a hike and there’s a 25.6% chance of a cut. We’ve recently seen odds that show there is a greater chance of a hike than cut. 

When the stock market rallied from Christmas Eve, the odds of hikes increase, albeit at a slower pace. The Fed pushed the odds of hikes back down. This has allowed stocks to rally despite the expected weak 2019 earnings growth. 

It’s tough to say for sure when the Fed’s full dovish tilt will be priced in. We have earnings season happening at the same time as this meeting. That’s why this is the most important week of the year.

Boeing & Microsoft - Boeing Beats Estimates Handily

It’s very important to note that the stock market’s gain on Wednesday wasn’t exclusively the Fed’s doing. 

This earnings season hasn’t been great for 2019 estimates, but a few key firms have boosted the market a few times so far. Wednesday was one example as Apple and Boeing rallied sharply.

Boeing had a great earnings report as EPS was $5.48 per share which beat estimates by 91 cents. Furthermore, revenues were $28.3 billion which beat estimates by over $1 billion. This sent the stock up 6.25%. The firm reported $101.1 billion in revenues in 2018. It crossed the $100 billion threshold for the first time. 

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