Stock Market Futures Trade Lower Following Downward Day For Markets
U.S. stock futures are on the decline ahead of Thursday’s opening bell this week. This comes as the latest update on the U.S. economy continues to weigh on markets. Namely, as of yesterday, the first-quarter U.S. GDP was revised down, indicating a 1.6% annualized contraction. The revision is reportedly due to personal consumption levels being less than previously reported. Pair this with a decline in U.S. consumer confidence throughout June, and investor concerns would not be unwarranted.
In fact, ahead of today’s monthly personal consumption expenditures (PCE) figures, it’s not surprising that investors are taking caution. Adding to this is Loretta Mester, the Cleveland Federal Reserve President. She states, “The fact that the salient prices of gasoline and food remain elevated suggests that there is some risk that longer-term inflation expectations of households and businesses will continue to rise.” Additionally, Mester also notes that she is keen to back another 75 basis point interest rate hike in July. This would be the case, she argues, if the current state of the economy persists through the Fed’s next meeting.
Regardless, companies across the board continue to push forward and there is plenty of stock market news to keep up with today. As of 4:43 a.m. ET, the Dow, S&P 500, and Nasdaq futures are trading lower by 0.73%, 1.20%, and 1.18% respectively.
Micron Earnings Preview: What To Consider
Micron (NASDAQ: MU) could be one of the major firms to consider on the earnings front today. After all, the semiconductor chip maker is set to report its third fiscal quarter results after the closing bell today. Getting straight into it, consensus figures on Wall Street are an earnings per share of $2.45 on revenue of $8.66 billion. Should this be the case, it would translate to commendable year-over-year gains of 30.3% and 16.7% respectively for Micron. Even with the ever-present macroeconomic headwinds it is facing, analysts see persisting growth for the company.
Despite all of this, MU stock, alongside its peers in the chip industry, continues to face pressure now. Year-to-date, the company’s shares are currently down by over 40%. Overall, this seems to stem from a cautious outlook regarding the chip industry from chip titan Intel (NASDAQ: INTC) as well. Nonetheless, it would not hurt to consider what analysts are saying about Micron now. For starters, both Citi (NYSE: C) and Wells Fargo (NYSE: WFC) are cutting their third-quarter estimates for Micron. However, their respective views on the company’s growth prospects are varying.
On one hand, Citi analyst Christopher Danely argues that a “collapsing” DRAM market would impact Micron’s key business. So much so that the analyst is lowering his price target for MU stock from $100 to $85. Nevertheless, he is reiterating the firm’s Buy rating on it. On the other hand, Wells Fargo analyst Aaron Rakers still has an Overweight rating on MU stock with a price target of $115. Rakers cites the “increasingly important role in core-to-edge compute,” that memory-related solutions are a key driving factor for Micron. With this mix of commentary on the firm, MU stock could be worth looking out for today.
FedEx CEO On Company’s Latest Long-Term Growth Strategy
Also in the news now is FedEx (NYSE: FDX). On the whole, this leading name in the global logistics industry seems to be kicking into high gear. In detail, new CEO Raj Subramaniam spoke about FedEx’s current trajectory and growth strategy at the company’s investor day event yesterday. According to Subramaniam, the company is focusing on boosting its earnings by focusing on more profitable deliveries overall.
In his words, “As we enter the next phase of FedEx, we will unlock value from this foundation to deliver outstanding returns to all of our stakeholders. Our strategy is focused on driving yields, expanding margins, and elevating returns through profitable growth and capital efficiency. We have tremendous momentum and a committed leadership team focused on delivering today, while innovating for tomorrow.” Notably, with these new goals, FedEx is currently targeting 18% to 22% annualized total shareholder return through its fiscal 2025.
All of which the company plans to accomplish via its “Deliver Today, Innovate for Tomorrow” plan. Even as the company continues to deal with rising freight costs, its commitment to returning value to shareholders is apparent. Time will tell if FedEx can deliver on this front in the long run. For now, such statements could have investors turning their radars to FDX stock.
Bitcoin Dips Below $20,000 As Pressures Mount On Crypto Markets; Grayscale Investments Sues SEC Over Bitcoin ETF Rejection
Meanwhile, even crypto markets are experiencing turbulence alongside the broader stock market. This is evident as Bitcoin (BTC) is seeing its value dip below the $20,000 mark today. This follows several weeks of declines, clearing off billions of dollars from the cryptocurrency market. Chiming in on this are analysts from the cryptocurrency exchange Bitfinex. They write, “A narrative that could well play out for the rest of the year and beyond is guiding bitcoin lower today, one of looming recession and mushrooming levels of inflation.”
At the same time, Grayscale Investments is butting heads with the Securities and Exchange Commission (SEC). Namely, the firm is initiating a lawsuit against the SEC over the rejection of its application for a spot Bitcoin ETF. The likes of which it is looking to convert its Grayscale Bitcoin Trust (GBTC) over to. Grayscale CEO Michael Sonnenshein said, “We are deeply disappointed by and vehemently disagree with the SEC’s decision to continue to deny spot Bitcoin ETFs from coming to the U.S. market.” As firms like Grayscale continue to push for the legitimization of Bitcoin further into the U.S. regulatory perimeter, investors could be watching closely.
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Home Furniture Retailer RH Under Pressure Following Downward 2022 Revenue Outlook Revision
Shares of RH (NYSE: RH) appear to be coming under fire following the latest update from management regarding its 2022 financial outlook. In essence, the high-end furniture provider is cutting its revenue outlook for fiscal 2022. According to RH, among the core reasons for this is decelerating consumer demand for the second half of the year. In its press release, RH anticipates annual revenue to be lower by between 2% to 5% year-over-year. This would be a notable difference from its previous estimate of annual sales being flat to up by 2% year-over-year.
Providing some extra context to all this is RH CEO, Gary Friedman. He explains, “With mortgage rates double last year’s levels, luxury home sales down 18% in the first quarter, and the Federal Reserve’s forecast for another 175 basis point increase to the Fed Funds Rate by year end, our expectation is that demand will continue to slow throughout the year.” As a result of all this, it would make sense that RH stock is feeling the heat in the stock market today.