Today's Scoop:

Hey friends, here's what you need to know today...

1. Companies are doing less business, but the slowdown is getting more gradual.

2. Layoff announcements have spread beyond tech.

3. Corporate financial reports have been underwhelming.

S&P 500: 4,016.951Mo: +5% | 1Yr: -8% | 5Yr: +40%

The market wavered today amidst more mixed data. Corporate financial updates have been underwhelming.

Companies are doing less business, but the slowdown is getting more gradual. A survey from S&P Global indicated business activity declined for the seventh straight month, but the contractions were a little slower in January across services and manufacturing. 

A large number of corporate financial updates have included layoff announcements. Most have been from high-growth companies that overhired during the pandemic boom. Today, a prominent manufacturer, 3M, issued a big wave of cuts.

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Earnings Guidance

One of the most critical components of corporate financial reports is the guidance. Public companies must report on their financial health each quarter, releasing standardized metrics on their sales, expenses, debt, profit, etc.

All of that information, though, is backward-looking. Investors are buying a company for its future earnings. So the company's reported guidance, or outlook, on its future sales or profits provides investors with a sense of optimism or pessimism from the people who know the company the best.

Forecasted metrics are not required, so many companies have avoided projections this past year, given the unprecedented economic events. If they do report, you'll hear that they may have raised or lowered guidance, meaning they expect higher or lower profit/sales/whatever than they projected last time. You might also hear guidance compared to Wall Street Analysts' projections or estimates.