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Dow, S&P Take a Break Ahead of Eventful Stock Market Thursday

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Wednesday, September 25th, 2024

Market trading cooled off today, a week after the Fed cut interest rates and sent a wave of good feeling through Wall Street. Today, market participants signaled the party’s over — or at least taking a disco nap.

We’ve got the big Personal Consumption Expenditures (PCE) report on Friday, so investors will doubtless keep some powder dry ahead of that announcement. It’s the Fed’s preferred gauge of inflation, and further lackluster numbers may signal another 50 basis-point (bps) cut at its next meeting in the first week of November.

The Dow and S&P 500 both retreated from all-time closing highs today: -293, -0.70%, points on the former and -0.19% on the latter. The small-cap Russell 2000 is getting bandied about, down another -1.19% today — perhaps a suggestion that for all the stock market strength, there remains some trepidation about a looming recession currently. The Nasdaq gained +0.04% for the session.
 

New Home Sales Beat Estimates


New Home Sales for August reached 716K in a report out earlier this morning. It was a step up from the 700K anticipated, but -4.7% for the month, and lower than the downwardly revised 739K recorded for July. This makes three of the last five months over 700K, a print we hadn’t seen since May of 2023.

That said, three of the four regions experienced losses for the month, led by the Northeast, -27.3%, and West -17.8%. The Midwest fell by a relatively scant -5.8%, while the South was the only gainer, +2.7%. Again, we expect a new threshold to have been crossed once lower mortgage rates are established.
 

Micron Posts Big Beats in Q4


Boise, ID-based AI chipmaker and data storage firm Micron Technology (MU - Free Report) posted solid beats on both top and bottom lines this afternoon for fiscal Q4: earnings of $1.18 per share outperformed the Zacks consensus by 8 cents, while revenues of $7.75 billion were up +93% year over year in the quarter. AI demand and its Data Center business sent earnings up more than +200% in the quarter.

Guidance was also improved for next quarter, with earnings of $1.74 per share and revenues of $8.70 billion ahead of the expected $1.68 and $8.54 billion, respectively. The company also expects +53% sales growth for full-year fiscal 2025. Shares are up +13% in late trading on the news.
 

An Eventful Thursday On Deck


Aside from normal Weekly Jobless Claims, tomorrow morning ahead of the opening bell we’ll also get Durable Goods Orders, Pending Home Sales and a second revision to Q2 GDP. After the close, Costco (COST - Free Report) releases its Q4 earnings report. Expectations are for +3.9% earnings growth and +1% growth on revenues.

Further, more FedSpeak will be underway throughout the day. Fed Governors Kugler, Bowman and Cook will give speeches, as will Fed Vice Chair Michael Barr. Boston President Collins, New York’s Williams and Minneapolis’ Kashkari will also make statements Thursday.

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