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Microsoft Soft Around the Edges?


Software giant not yet ready for a comeback.

Minyan Morning Memo

One to Watch: Microsoft (MSFT) is out with earnings after the close, the second time in two days I've selected a stock from Washington state. Starbucks (SBUX) responded to the Sharon treatment with its biggest ever one day gain but Bill's baby has as much chance of following suit as have Britain and Spain of resolving Gibraltar Rock. That the software giant and crucial Dow component is a world class company scarcely needs saying but its go-go years went when it started paying dividends and announced its first ever large layoffs. With customer service which compares unfavorably to Apple (AAPL) and Gates increasingly going globetrotting with Bono in search of world peace, investors shouldn't expect a return to the glory days just yet. Its cash hoard remains formidable however and Steve Ballmer doesn't suffer fools, so a comeback is possible.

What Just Happened: The S&P 500 saw its winning streak snapped as the market literally ran out of gas, energy stocks slipping along with crude. Though the Nasdaq rose for an eleventh straight session, something which hasn't happened since 1996. That was the year, if memory serves, of "irrational exuberance". This morning, initial jobless claims rose in-line with expectations, while continuing claims fell in-line with expectations

What's Happening: Asia ended higher again. In Europe, Porsche's CEO was pushed out, paving the way for a merger with Volkswagen. That a luxury sports car maker and onetime manufacturer of the Beetle await the alter is surely an unlikelier marriage than a merger between The Rolling Stones and The Beatles.

What Will Happen: On the economy we get June existing home sales out at 10:00 AM, with today's Journal saying real estate is "showing signs of life". The earnings express continues with results from AT&T (T), Amazon (AMZN), Bristol-Myers (BMY), Ford (F), 3M (MMM), Fifth Third (FITB), PNC Financial (PNC), UPS (UPS), Xerox (XRX) and the endlessly interesting CIT Group (CIT).

Happenstance: I'll end with another nod to North Korea, though this one is almost beyond parody. Until Italy sensibly intervened, it seems the head of a country whose starving citizens are forced to eat grass was on the point of purchasing some yachts.
No positions in stocks mentioned.
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