Microsoft’s revenue rose last quarter as excitement about artificial intelligence helped power the growing demand for its cloud services. On Tuesday, the company posted $62 billion in revenue for the December quarter. That was up 18% from a year earlier and above analysts’ estimates for 16% growth. The quarterly earnings of the Redmond, Wash., company incorporated results from videogame maker Activision Blizzard, which Microsoft completed buying late in the quarter. The company’s Azure cloud business grew 30%, beating analysts’ estimates of 27%. Behind that demand has been the continuing interest in cloud AI services that Microsoft has been leaning into as part of its partnership with Open AI, the startup behind ChatGPT. Microsoft’s net income rose 33% to $21.9 billion for the quarter. Analysts surveyed by FactSet were anticipating a profit of $20.72 billion. Microsoft, has been on a run since last year. It has been the vanguard of current investor enthusiasm that new AI-driven products will transform the industry, helping Microsoft to dethrone Apple as the company with the highest market value in the world. It also climbed above $3 trillion in market capitalization last week, becoming only the second company after Apple to reach that mark.

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The Swiss stock market has finished higher now in five straight sessions, climbing almost 300 points or 2.9 percent in that span. The SMI opened slightly higher on Tuesday and spent much of the day bouncing back and forth across the unchanged line before a late surge nudged it into the green at the close. The upward movement was in line with other major European markets, which ticked higher as investors digested mixed regional data and looked ahead to key Federal Reserve and Bank of England meetings this week for directional cues. For the day, the index rose 13.30 points or 0.12 percent to finish at 11,443.13 after trading between 11,420.15 and 11,473.57. Among the actives, Swiss Life surged 1.37 percent, while Compagnie Financiere Richemont spiked 1.32 percent, UBS Group rallied 1.29 percent, Zurich Insurance stumbled 1.26 percent, ABB jumped 0.97 percent, Adecco Group climbed 0.79 percent, Swisscom sank 0.46 percent, Nestle slumped 0.36 percent, Novartis lost 0.34 percent and Swiss Re fell 0.18 percent. In economic news, Switzerland's foreign trade surplus increased during the year 2023 compared to last year as exports rebounded amid a fall in imports, data from the Federal Customs Administration showed on Tuesday. The trade surplus for 2023 was CHF 48.5 billion, up from CHF 42.8 billion in 2022. In real terms, exports rose 2.5 percent in 2023 versus a 0.7 percent fall in the previous year. Imports logged a decrease of 2.0 percent over the year, reversing a 1.0 percent gain in 2022.

Europe
European stocks moved modestly higher during on Tuesday as investors digested mixed regional data and looked ahead to key Federal Reserve and Bank of England meetings this week for directional cues. The pan-European STOXX 600 rose 0.2 percent to 405.63 after gaining 0.2 percent in the previous session. The German DAX Index also crept up by 0.2 percent, while the U.K.'s FTSE 100 Index and the French CAC 40 Index climbed by 0.4 percent and 0.5 percent, respectively. Spanish lender BBVA surged 6.2 after posting solid fourth-quarter results and announcing a share buyback of 781 million euros ($846.1 million). Advertising agency WPP also showed a significant move to the upside after upgrading its medium-term financial targets. Infrastructure products group Hill & Smith also moved notably higher after appointing a new chief operating officer. MorphoSy also advanced. The biopharmaceutical company expects Monjuvi U.S. net product sales to be in the range of $80 million to $95 million for the year 2024, in line with its previous guidance. Meanwhile, shares of German food delivery service Delivery Hero plunged by 5.3 percent. The company said it would sell a stake in Deliveroo as consumer demand wanes.

United States
After ending Monday's session firmly in positive territory, the major U.S. stock indexes turned in a mixed performance during trading on Tuesday. While the tech-heavy Nasdaq showed a notable pullback, the Dow climbed to a new record closing high. The Dow ended the day up 133.86 points or 0.4 percent at 38,467.31, while the Nasdaq slid 118.15 points or 0.8 percent to 15,509.90. S&P 500 bounced back and forth across the unchanged line before closing down 2.96 points or 0.1 percent at 4,924.97. The pullback by the Nasdaq came as traders cashed in on some of the recent strength in the tech sector ahead of the release of quarterly results from Google parent Alphabet (GOOGL) and software giant Microsoft (MSFT) after the close of trading. Big-name tech companies like Apple (AAPL), Amazon (AMZN) and Meta Platforms (META) are also due to report quarterly results in the coming days. Uncertainty ahead of the Federal Reserve's monetary policy announcement on Wednesday may also have inspired traders to book tech-sector profits. The Fed is widely expected to leave interest rates unchanged, but the accompanying statement could have a significant impact on the outlook for rates. On the U.S. economic front, Labor Department released a report this morning showing an unexpected increase in job openings in the month of December. The Labor Department said job openings rose to 9.03 million in December from an upwardly revised 8.93 million in November.

Asia
Stock markets in East Asia and Sydney are mixed on Wednesday. In Hong Kong, the HSI fell by 1.2 per cent, with the ruling on the liquidation of the faltering property giant Evergrande continuing to cause uncertainty. In addition, the property company Hang Lung Group announced the day before that its debt ratio had risen from 29.6 to 32.7 per cent. Following the sharp fall in the share price the previous day, it is now holding its ground. Meanwhile, China Evergrande shares are still suspended.

Bonds
In the U.S. bond market, treasuries have pulled back near the unchanged line after seeing early strength. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by less than a basis point at 4.082 percent.

Analysis
UBS raises Brenntag target to 94 (84) EUR – Buy
Deutsche Bank raises ASML target to EUR 880 (720) – Buy
Citi raises Heidelberg Materials target to EUR 85 (80) – Neutral

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