Tech Stocks Tumble as Microsoft Warns of Slowing Growth

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What's Happening Today

U.S. stock markets are taking a battering today after investors were disappointed in Microsoft's guidance on future growth released after the bell yesterday.

In its quarterly earnings report, Microsoft shared that there was a "slowdown" in new business growth. What's more, the company said that the business trends from the end of the year would likely continue into the first few months of 2023 as customers grow more reluctant to spend money. In other words, Microsoft expects to see softness in the market going forward. Shares of Microsoft are falling, along with shares of other companies with cloud-related businesses, including Amazon, MongoDB, and Snowflake.

The guidance provided yet another disappointing outlook for investors about what we can expect from not only corporate performance, but also the economy. Even if you're not invested in Microsoft, it's important to note that one of the country's largest companies is hinting that there will be struggles going forward. That could also signal struggles for the rest of us as the economy slows down.

For the rest of the week, expect attention to shift to upcoming economic data about fourth quarter economic growth and December inflation. If data continues to disappoint, it's likely markets will take another hit. But if inflation data cools, there could be some optimism in the markets, which means your portfolio might get a little boost going into the weekend.

- Kristin

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American Depositary Receipt (ADR)

An American depositary receipt (ADR) is a security that represents indirect ownership of shares of a foreign company that isn't directly traded on U.S. exchanges. American banks purchase the shares through their foreign branches and make them available to investors in the U.S.

ADRs offer a simple way for many investors to purchase foreign stocks without dealing with foreign banks and exchange rates. However, they can be more expensive and challenging than investing in international funds.

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