Indicators
Wake Up Call
- Hello ! Wall Street’s tech-driven rally — fueled by Nvidia Corp.’s rebound from a $430b rout — seemed set to run out of steam on Wednesday after a Federal Reserve official tempered expectations for US interest rate cuts. S&P 500 and Nasdaq 100 erased gains after Fed Governor Michelle Bowman reiterated her view that borrowing costs should remain elevated for some time. The 10-year Treasury yield ticked higher and a gauge of the dollar rose for a second day.
- MICRON RESULTS TONIGHT - To report earnings after the close, and analysts say the report will be the most important AI data point until other Big Tech companies begin reporting late in July (and NVDA late in August), due to the fact that Micron and Nvidia work together on high bandwidth memory (HBM). Analysts believe that MU's results and guidance are likely to be solid, but the question is whether investors will use the numbers as an opportunity to book further profits in momentum/tech. JPM expects next quarter's EPS will be guided higher vs exp ; the bank anticipates MU will reaffirm its view that DRAM and NAND storage technology pricing will increase through 2024 into 2025 as strong HBM bit shipment and pricing visibility start to extend into 2026.
- FED STRESS TESTS - After the close, the Fed will release bank stress test results; the results will shape how much capital banks need to hold, and how much they can return to shareholders. Reuters reports that this year, big US lenders are once again expected to show they have ample capital to weather any fresh turmoil in the banking sector. There is no Fedspeak scheduled for Wednesday.
Wall Street Movers
- FEDEX +14.6% sees FY25 adj EPS $20-$22 (est $20.85). Capex $5.2b (est $5.34). 4Q adj EPS $5.41 (est $5.34). Rev $22.1b (est$22.1b). The company also pledged to buy back up to $2.5b in stock over the fiscal year and hinted at the potential divestment of its FedEx Freight business => UPS +2.4%
- GENERAL MILLS -4.4% 4Q organic net sales -6% (est. -3.31%). EPS $1.01 (est $1). Adj gross margin 34.9% (est 34%). Net sales $4.71b (est $4.87b). Co raises quarterly div 1.7% to $0.60/shr. Expects FY25 adj EPS -1% to 1%.
- RIVIAN +41% after Volkswagen said it plans to establish a joint venture and invest up to $5b until 2026 in the electric-car maker. Analysts were positive about the investment and noted that the JV is a vote of confidence for Rivian’s business >> LCID +7%
- SOUTHWEST AIRLINES -4% 2Q Rev per available seat decline in 4.0% to 4.5%, saw down -1.5% to 3.5% due to "complexities in adapting its rev management to current booking patterns in this dynamic environment”. Co. still sees 2Q ASMS up 8% to 9%.
- VISTA +10% MNC CAPITAL boosts all cash-offer to buy Co. to $42/shr. It expects that Co.’s board will move forward expeditiously to sign a merger agreement on the terms proposed.
- WHIRPOOL +19% after Robert Bosch spoke with potential advisers about a possible offer for Co., Reuters report.
At A Glance
- AIG plans to sell its global individual personal travel insurance and assistance business to Zurich Insurance Group for $600m in cash plus additional earn-out consideration
- BOEING FAA’s new airworthiness directive is for Model 757-200 airplanes modified by supplemental type certificates.
- ENTEGRIS wins $75m in semiconductor subsidies from Biden administration. It will support a facility in Colorado Springs, Colorado, that will make parts and materials needed for advanced chip production.
- PAYCHEX 1Q EPS 1.12 (exp. 1.10), Revenue 1.30b (exp. 1.3b)
Broker Moves
UPGRADES
- CAMPBELL SOUP upgraded to overweight at JPMorgan; PT $52.
- DIGITAL REALTY upgraded to outperform at BMO; PT $170
- HOME DEPOT upgraded to buy at DA Davidson; PT $395
- ROBINHOOD upgraded to outperform at Wolfe; PT $29.
- UNIVERSAL HEALTH upgraded to outperform at Baird; PT $236
DOWNGRADES
- ACCENTURE downgraded to equal-weight at Morgan Stanley; PT $300.
- APTIV downgraded to underweight at Piper Sandler; PT $63.
- SAREPTA downgraded to neutral at Citi; PT $176
INITIATIONS
- CATERPILLAR rated new buy at Citi; PT $380
- CNH INDUSTRIAL rated new buy at Citi; PT $16
- CUMMINS rated new buy at Citi; PT $320
- DEERE rated new neutral at Citi; PT $395
- MONDAY.COM rated new overweight at Barclays; PT $275
- UNITED RENTALS rated new buy at Citi; PT $745
Today's Key Events (UK Time)
12am : US MBA Mortgage Application
3pm : US New Homes Sales
Game Of Corporate Actions
DIV EX DATE
- Today : Zimmer Biomet
- Tomorrow : Invitation Homes ($0.28); Sempra ($0.62)
EARNINGS
- Today aft mkt : Micron Technology
- Tomorrow bef mkt : McCormick; Walgreens
- Tomorrow aft mkt : Nike