CHRIS VERSACE: Good morning, Action Alerts Plus subscribers. As promised, members, I'm back with a look at what could shape how we think about the portfolio this week. While we wait for a series of data points in the coming days, including today's S&P Global flash PMI data that I previewed yesterday with JD Durkin, I remain rather focused on the cautionary market mood that has prevailed, especially as we continue to get signs of a weakening global economy.

What I'm referring to here is this morning's flash January PMI data points for the UK, the eurozone, and Japan-- all of which confirmed continued slowing in the global economy. We also had 3M, General Electric, and other companies signaling weakness ahead, including downside revisions for earnings expectations for 2023. However, there is a potential bright spot that I'm watching. And that is the continued fall in the dollar, which could alleviate one of the many headwinds companies with meaningful international exposure felt in the second half of last year.

While it may not thrill folks that are looking to travel outside of the US, it does make US goods and services incrementally more competitive. Now, stepping back a bit, we've been expecting earnings expectations to get reset lower. And the coming days where we start to see an explosion in the number of companies reporting will tell us the degree to which that is likely to happen. We'll be cross-checking all of that with the upcoming economic data that I mentioned earlier and what it means for the Fed relative to market expectations.

One of the questions that we're looking to get answers to is the probability of a soft landing for the economy and what that means for not only the Fed, but companies and earnings expectations. For now, however, we are rather well-positioned for the market rethink on things. But as new data is had, we will continue to update our thinking. And of course, we'll be sharing that with members and adjusting the portfolio as needed.

Now, let's move over to earnings, because, again, there is simply no shortage of reports to be had this week with something more than 500 companies reporting. Now, on the consumer front, what will we be looking for? Well, we have American Express, Visa, and of course, our own holding Mastercard all reporting this week.

In addition to the December quarter earnings results and guidance, we'll also be looking for a few things in each of these reports, including what sectors do they see holding up from a consumer spending point of view, is business travel still expected to rebound in the first half of the year, and what is their internal data saying about the health of the consumer? Now, let's turn to tech.

Early this morning, we got a first look at what to expect from Microsoft after today's closing bell when Logitech reported its quarterly results. Not only did Logitech miss expectations for the December quarter with double-digit declines at gaming, video collaboration, and PC accessories, Logitech also reiterated its guidance for 2023 revenue to fall 15% year-over-year.

Now, we're going to want to take a look at its earnings conference call to try and parse that first year forecast. What does it say for the first half of the year versus the second half of the year? But heading into Microsoft's earnings after the close today, it certainly suggests the PC inventory overhang remains. And that confirms earlier comments in recent weeks that we heard from Micron and Taiwan Semiconductor.

To me, this sets up an earnings report from Microsoft after the close that is going to be more likely than not challenging, particularly on the PC front. And yes, we do expect downbeat commentary on that front. However, Microsoft's earnings will also give us the first hard look at cloud spending in the December quarter and how Microsoft sees it playing out in the coming quarters. This is going to impact expectations on cloud spending as it relates to Amazon, as it relates to Alphabet, but also on a variety of chip companies ranging from A&D to Nvidia.

And as we shared with members, inside of Microsoft's earnings report and conference call, we are very curious to see what, if anything, the company has to say about plans for ChatGBT. More likely than not, however, Microsoft probably isn't going to say all that much just yet. As I shared on yesterday's AAP podcast, I see Microsoft really opening the kimono on its plans at an analyst day later this year.

And, of course, it's impossible not to have one's eye on Tesla. And that company reports after tomorrow's close. While the call, I am sure, will be rather colorful, as it tends to be, at the bare minimum, I'll be listening for commentary on the evolving EV landscape. But in particular, I want to hear what Tesla has to say about the EV tax credit and what its impact could be in 2023 and beyond.

That's something I'm watching rather closely given our shares of Ford Motor. But I also want to see the degree to which Tesla delivers better than expected delivery forecasts for the coming years. Why? Because that is going to point to the one area that we continue to be focused in on with ChargePoint. That is EV demand and the looming pain point as the automotive industry continues to accelerate that shift towards EVs at the expense of combustion engines.

And of course, we had earnings from Lockheed Martin and Verizon today. I would suggest members be on the lookout for your email inboxes later today where I'll be sharing my comments, breaking down the quarterly results, the guidance, and what it means for our positions in the portfolio. We'll be back tomorrow to hit on three names that are catching my attention this week.

In the meantime, please continue to send your questions and feedback to Thanks for joining us today.