What we’re watching on July 1 The first day of the third quarter and the second half on Wall Street. Four straight down days for the S & P 500 but still not oversold: The oscillator was only at minus 1.26%. The S & P just had its worst first half of a year since 1970. Recession worries pervasive. Stocks premarket on Friday fell as investors sought the safety of bonds, pushing the benchmark 10-year Treasury yield below 3% to near one-month lows. After the closing bell Thursday, Micron (MU) reported a better than expected quarter but guides revenues and earnings well below estimates. Sees next quarter earnings-per-share at $1.63 plus or minus 20 cents versus $2.62 consensus. A good example of how a low multiple stocks on paper might mean the estimates are still too high. The conference call has everything you need to know about semiconductors. Management takes down forecasts on the consumer side: personal computer unit sales down 10% from flat, smartphone unit sales down mid-single digit versus mid-single digit growth. Warns that they are seeing some enterprise original equipment manufacturer (OEM) customers pulling back on memory and storage inventory due to non-memory component shortages and macro concerns. Data center end demand expected to remain strong. Cloud still healthy. China lockdowns created problems on both the demand and supply side. Still a battleground among analysts with many price target cuts on Micron. Cowen to $70 per share from $90 … $75 from $86 at Goldman … BMO says among the best risk reward, yet BofA downgrades to neutral. This is the stock to watch Friday as trades down 4.5% in the premarket. Kohl’s (KSS) ends talks to sell itself to The Vitamin Shoppe owner Franchise Group (FRG). “Despite a concerted effort on both sides, the current financing and retail environment created significant obstacles to reaching an acceptable and fully executable agreement,” said Peter Boneparth, chairman of Kohl’s board, in a news release. Kohl’s announces a $500 million accelerated share repurchase program — but like many in retail, the company lowers its second quarter citing a softening in consumer spending due to inflationary forces. Talks in June were for a buyout at around $60 per share. KSS trading around $30 pre-market, indicated to open down 18%. A few price target cuts on club name Constellation Brands (STZ) after the Corona beer maker posted a big earnings beat Thursday but didn’t raise guidance. JPMorgan goes to $263 per share from $268 … Credit Suisse to $292 from $295 … RBC Capital stays at $300. We thought CEO Bill Newlands did a good job Thursday on “Mad Money” explaining the momentum in the beer business and why the share conversion agreement with the Sands family is a great deal for shareholders. Piper Sandler cuts price targets at the big banks, taking JPMorgan (JPM) to $158 per share from $170 … Citigroup (C) to $62 from $70 … club name Morgan Stanley (MS) to $90 from $100 … Bank of America (BAC) to $47 from $51. JPMorgan, in a research note, says they are not as worried as the Street is on Apple (AAPL). Mizuho cuts Mastercard (MA) price target to $375 per share from $435 … Visa (V) to $215 from $235. Club name Chevron (CVX) price target lowered to $160 per share from $179 at Cowen, which likes the setup into earnings more for Exxon (XOM) but they stay neutral. JPMorgan downgrades a few regional banks: Live Oak Bancshares (LOB) and Huntington Bancshares (HBAN) to neutral … HBT Financial (HBT) to underweight. Walgreens Boots Alliance (WBA) price target lowered to $43 per share from $52 at Credit Suisse after earnings Thursday. (Jim Cramer’s Charitable Trust is long STZ, MS, AAPL and CVX. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
Micron Technology headquarters in Boise, Idaho, March 28, 2021.
Jeremy Erickson | Bloomberg | Getty Images
What we’re watching on July 1
The first day of the third quarter and the second half on Wall Street. Four straight down days for the S&P 500 but still not oversold: The oscillator was only at minus 1.26%. The S&P just had its worst first half of a year since 1970. Recession worries pervasive. Stocks premarket on Friday fell as investors sought the safety of bonds, pushing the benchmark 10-year Treasury yield below 3% to near one-month lows.
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