Remember Earnings?

Tomorrow isn't just about the Fed. We're now in the heart of earnings season, with at least 100 companies in the S&P 500 reporting this week. Strong results can still break through. IBM was one of the few green stocks on my quote page today. Big Blue jumped 5.7% thanks to a strong earnings report last night, featuring its best sales growth in a decade. My colleague Eric Savitz wrote that the "results suggest that CEO Arvind Krishna’s strategy for returning the legacy tech giant to growth is beginning to pay off."

IBM remains one of the cheapest tech stocks in the the market. In an era of bursting bubbles and rising rates, strong earnings and a cheap stock are a good combination. (American Express was the S&P 500's best performing stock today, up 8.9%, after it delivered strong earnings of its own.)

Tomorrow, the market will get to chew on results from another tech giant. After the close, Microsoft said revenue was up 20% in the December quarter, to $51.7 billion, ahead of Wall Street estimates. Despite the beat, the stock fell in late trading -- until Microsoft gave a strong current-quarter outlook on its earnings conference call. By 6:30 p.m., shares were up about 3.2%. 

Heading into the earnings call, Microsoft shares were down exactly 20% from their November peak.

In a note to clients tonight, Wedbush Securities analyst Daniel Ives wrote: "In this jittery market we will see every tech print initially viewed as glass half empty, but ultimately this remains a core cloud name to own and we believe is in oversold territory."

Perhaps the selloff was on Microsoft CEO Satya Nadella's mind. At the top of call, he offered a strong defense for his company:

Digital technology is the most malleable resource at the world's disposal to overcome constraints and reimagine everyday work and life. We are innovating and expanding our entire portfolio across consumer and commercial segments to help people and organizations thrive in this new era.

The earnings parade continues tomorrow, highlighted by Tesla and Intel. For Tesla, earnings will mark a return of CEO Elon Musk who had stepped back from doing earnings calls last year. Barron's Al Root says Musk is there to "deliver a product update." That could be anything from the Cybertruck, a lower-priced electric vehicle, new plants in Germany and Texas, or improved batteries. Tesla's earnings will be crucial, but Musk, as usual, is likely to dominate the show. You can read Al's Tesla earnings preview here.

Monday's newsletter showed old data for the "Hot Stock" and "Biggest Loser." The day's best performing stock in the S&P 500 was Gap (+7.9%), not Activision Blizzard, and the worst performer was Signature Bank (-3.7%), not Moderna.