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Market indices closed moving notably higher directly before the closing bell to another regular trading day. That said, we’re still mixed/flat overall for this final week of June, calendar Q1 and 1H of 2023. As we’ve mentioned in this space this week already, there is little pushing or pulling markets in either direction: the Dow finished -102 points, -0.30%, while the Nasdaq was up +0.29%. The S&P 500 closed down -0.02% — flat as a pancake — while the Russell 2000 led all major indices, +0.49%.
It’s been a strong June overall, with the small-cap Russell leading the way over the past month, +5.2%, followed by the Nasdaq, +4.4%, the S&P +4.1% and the blue-chip Dow in the rear, +2.45%. We’re off the highs of two weeks ago tomorrow, but have rebounded nicely off Monday’s recent lows. And even with Personal Consumption Expenditures (PCE) due out on Friday, we don’t expect much high-volume trading; mostly just positioning for a new quarter and half of the year.
Memory chipmaker Micron (MU - Free Report) outperformed expectations in its fiscal Q3 earnings results after today’s close, with a loss per share of -$1.43 nicely improved over the -$1.57 per share in the Zacks consensus. Revenues of $3.75 billion outpaced the $3.68 billion expected, and wound up at the median of quarterly guidance. Shares shot up +5% on the news, and have since cooled a bit, to around +4%.
The company believes the memory chip industry has passed through its trough period, with excess inventories finally draining. Gross margins are still in the negative, but largely improved over the past two quarters, when Micron missed earnings expectations. That said, the company mentioned the recent China cyberspace ban is having a “significant headwind” on the company’s near-future business.
Also this afternoon, 23 U.S. banks all passed the most recent stress test put forth by the Federal Reserve. In an hypothetical situation surrounding catastrophic climate change leading to a vast change in home placement, $541 billion was projected to have been lost ($100 billion in real estate holdings), yet the companies would have been able to cover with excess capital. This has led Fed Vice Chair of Supervision Michael Barr to conclude the U.S. banking system is “strong and resilient.”
These banks will now be allowed to issue new reports on share buybacks as of Friday, should they choose to do so. We’ll find out if many had been waiting for this stress test to pass before making moves on their shareholders’ behalf, and as Friday will be the last trading day of the quarter, perhaps we’ll see a bit more commotion than we’ve seen thus far in the markets this week.
Tomorrow brings us the second revision to Q1 GDP, which is expected to bounce 30 basis points to +1.6% from the first revision, which is half the final Q4 GDP print of +2.3%. Otherwise, we’ll see Initial and Continuing Jobless Claims for the past two weeks, which have been climbing in recent reports. Finally, Pending Home Sales for May will be out after the market opens Thursday; New Home Sales earlier this week provided an upward surprise.
Image: Bigstock
Bank Stress Tests, Micron (MU) Q3 Pass the Muster
Market indices closed moving notably higher directly before the closing bell to another regular trading day. That said, we’re still mixed/flat overall for this final week of June, calendar Q1 and 1H of 2023. As we’ve mentioned in this space this week already, there is little pushing or pulling markets in either direction: the Dow finished -102 points, -0.30%, while the Nasdaq was up +0.29%. The S&P 500 closed down -0.02% — flat as a pancake — while the Russell 2000 led all major indices, +0.49%.
It’s been a strong June overall, with the small-cap Russell leading the way over the past month, +5.2%, followed by the Nasdaq, +4.4%, the S&P +4.1% and the blue-chip Dow in the rear, +2.45%. We’re off the highs of two weeks ago tomorrow, but have rebounded nicely off Monday’s recent lows. And even with Personal Consumption Expenditures (PCE) due out on Friday, we don’t expect much high-volume trading; mostly just positioning for a new quarter and half of the year.
Memory chipmaker Micron (MU - Free Report) outperformed expectations in its fiscal Q3 earnings results after today’s close, with a loss per share of -$1.43 nicely improved over the -$1.57 per share in the Zacks consensus. Revenues of $3.75 billion outpaced the $3.68 billion expected, and wound up at the median of quarterly guidance. Shares shot up +5% on the news, and have since cooled a bit, to around +4%.
The company believes the memory chip industry has passed through its trough period, with excess inventories finally draining. Gross margins are still in the negative, but largely improved over the past two quarters, when Micron missed earnings expectations. That said, the company mentioned the recent China cyberspace ban is having a “significant headwind” on the company’s near-future business.
Also this afternoon, 23 U.S. banks all passed the most recent stress test put forth by the Federal Reserve. In an hypothetical situation surrounding catastrophic climate change leading to a vast change in home placement, $541 billion was projected to have been lost ($100 billion in real estate holdings), yet the companies would have been able to cover with excess capital. This has led Fed Vice Chair of Supervision Michael Barr to conclude the U.S. banking system is “strong and resilient.”
These banks will now be allowed to issue new reports on share buybacks as of Friday, should they choose to do so. We’ll find out if many had been waiting for this stress test to pass before making moves on their shareholders’ behalf, and as Friday will be the last trading day of the quarter, perhaps we’ll see a bit more commotion than we’ve seen thus far in the markets this week.
Tomorrow brings us the second revision to Q1 GDP, which is expected to bounce 30 basis points to +1.6% from the first revision, which is half the final Q4 GDP print of +2.3%. Otherwise, we’ll see Initial and Continuing Jobless Claims for the past two weeks, which have been climbing in recent reports. Finally, Pending Home Sales for May will be out after the market opens Thursday; New Home Sales earlier this week provided an upward surprise.
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