Microsoft Announces Massive Layoffs and Morgan Stanley Beats Earnings Estimates

What you need to know about today's stock market.

Jul 17, 2014 at 9:25AM

Stocks appear set to step back from record highs in today's session. The Dow Jones Industrial Average (DJINDICES:^DJI) has lost 35 points in premarket trading, suggesting a slightly lower start for the stock market. Still, the broader trend is definitely up: The Dow yesterday set its fifteenth all-time high of the year.

Global shares were mixed overnight: Asian stocks ended flat, while Europe's Stoxx index was down 0.9% as of 9 a.m. EDT. With a light economic calendar, investors will probably stay focused on earnings reports today, including Google's, which is due after the closing bell.

Meanwhile, breaking news is sending Microsoft (NASDAQ:MSFT) and Morgan Stanley (NYSE:MS) stocks on the move today.

Msft Logo

This won't be an easy day at Microsoft HQ. The software giant is reportedly set to launch the largest round of layoffs in its history, affecting 18,000 employees. The New York Times reported last night that human resource managers have blocked off conference rooms at the Redmond campus for the day, likely to hold meetings with laid-off employees. The cuts will probably focus on Microsoft's new Nokia group, which just added 25,000 employees to its rolls. But the layoffs are also part of CEO Satya Nadella's larger plans to make Microsoft leaner and more flexible. In a memo to employees last week he said that management was looking to "flatten the organization and develop leaner business processes" as competition in mobile devices and services heats up. Microsoft's stock was up 3.6% in premarket trading.

Morgan Stanley this morning posted a slight revenue gain for its fiscal second quarter as adjusted revenues ticked higher year over year to $8.5 billion. Earnings jumped to $0.94 per share, which was well ahead of Wall Street's earnings forecast for the investment bank. Analysts had been expecting EPS of closer to $0.60. Highlights of the results include an increase in profitability in Morgan Stanley's wealth management business. That group saw deposit balances top $2 trillion and profit margin climb to an all-time high of 21%. Improvement there helped offset soft results in the company's fixed-income and commodities business. CEO James Gorman said in a press release that management is seeing "momentum across our businesses" despite what he called an overall "muted operating environment." The stock was up 1.7% in premarket trading.

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Demitrios Kalogeropoulos has no position in any stocks mentioned. The Motley Fool recommends Google (C shares). The Motley Fool owns shares of Google (C shares) and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

A Financial Plan on an Index Card

Keeping it simple.

Aug 7, 2015 at 11:26AM

Two years ago, University of Chicago professor Harold Pollack wrote his entire financial plan on an index card.

It blew up. People loved the idea. Financial advice is often intentionally complicated. Obscurity lets advisors charge higher fees. But the most important parts are painfully simple. Here's how Pollack put it:

The card came out of chat I had regarding what I view as the financial industry's basic dilemma: The best investment advice fits on an index card. A commenter asked for the actual index card. Although I was originally speaking in metaphor, I grabbed a pen and one of my daughter's note cards, scribbled this out in maybe three minutes, snapped a picture with my iPhone, and the rest was history.

More advisors and investors caught onto the idea and started writing their own financial plans on a single index card.

I love the exercise, because it makes you think about what's important and forces you to be succinct.

So, here's my index-card financial plan:


Everything else is details. 

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