Software bellwether Microsoft is scheduled to report Q2 earnings tonight after the bell with a conference call beginning around 5:30 p.m. ET (for context, MSFT reported at 4:04 p.m. ET in an 8-K filing last quarter)

Capital IQ Consensus Estimate for MSFT's Q2 EPS if $0.87 on revenues of about $28.42 bln.

MSFT HAS STATED THE FOLLOWING FOR FY18:

  • Expect full year operating expense growth, ex-LinkedIn, of 4-5% (unchanged)
  • Also commented margins are trending a bit better on both gross and operating (expect operating margins, ex-LinkedIn, to be up y/y)
  • Further, now expect LinkedIn, ex-purchase accounting, to be accretive to EPS this FY (prior guidance was for LinkedIn to be FY18 dilutive and FY19 accretive)

OPTIONS:

The current implied volatility stands at ~ 30%, which is 107% higher than historical volatility (over the past 30 days). Based on the weekly MSFT  Feb02 $94 straddle, the options market is currently pricing in a move of ~4% in either direction by weekly expiration (Friday).

TECHS: 

All-time highs here around $94/95; buyers will be eyeing to push price towards the "psychological" $100-mark if earnings are good. If not, then watch for sellers to challenge the $90-level around the 20-day ma. Below that watch the 50-day ma's near $87/86.