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What will next week bring? It is an excellent question, especially given how this past one ended. The market, for the most part, seems to be expecting that something terrible shall happen. I still can’t put my finger on what that is, because my crystal ball doesn’t look nine months out.
Micron
Perhaps we can get some better clarity this week when Micron reports results. It was in September after Micron’s results when the wheels started coming off the equity market. It was then the company warned of slowing growth and higher cost due to tariffs.
The company last reported results on September 20. On that date, the Russell 2000 and Micron were both up 12% on the year. It was from that point on that things fell apart. Micron’s stock now down 17% on the year and the Russell is down 8%. The S&P 500 soon began to fall and has now dropped more than 2% on the year.
A Barometer?
Could it be that Micron is a barometer for the health of the market? Who knows, anything is possible. Chips are used in so many products today that Chips could be a leading indicator of economic health. Think about all the devices in your home that have chips in them.
Interestingly, on September 20 Micron was up 12%, and the Van Eck Semiconductor ETF SMH was up 10%, while the SOXX ETF was up 11%. Now the SOXX is down about 6% and the SMH is down 7%.
Commentary
Perhaps most important will be what impact the tariffs are having on Micron’s business. This what Micron said last quarter:
It will be all about the commentary Micron gives about tariffs and the impact they are having. A sign that the effects from the tariffs are diminishing may signal a market rebound. If the effects from the tariffs have grown worse, then perhaps there is more downside risk.
The Fed
We will also get the Fed meeting this week, and that to will hold a considerable amount of weight on the direction of the market. That comes on December 19.
By the way, Micron reports on December 18 after the close of trading. So December 19 may be the day we pivot higher or pivot even lower.
Yeah, just when you thought it couldn’t get any worse, there is a chance it might get much worse.
Mike
Mott Capital Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Past performance is not indicative of future results
micron, stocks, stock market, chips
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This report contains independent commentary to be used for informational and educational purposes only. Michael Kramer is a member and investment adviser representative with Mott Capital Management. Mr. Kramer is not affiliated with this company and does not serve on the board of any related company that issued this stock. All opinions and analyses presented by Michael Kramer in this analysis or market report are solely Michael Kramer’s views. Readers should not treat any opinion, viewpoint, or prediction expressed by Michael Kramer as a specific solicitation or recommendation to buy or sell a particular security or follow a particular strategy. Michael Kramer’s analyses are based upon information and independent research that he considers reliable, but neither Michael Kramer nor Mott Capital Management guarantees its completeness or accuracy, and it should not be relied upon as such. Michael Kramer is not under any obligation to update or correct any information presented in his analyses. Mr. Kramer’s statements, guidance, and opinions are subject to change without notice. Past performance is not indicative of future results. Neither Michael Kramer nor Mott Capital Management guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment commentary presented in this analysis. Strategies or investments discussed may fluctuate in price or value. Investments or strategies mentioned in this analysis may not be suitable for you. This material does not consider your particular investment objectives, financial situation, or needs and is not intended as a recommendation appropriate for you. You must make an independent decision regarding investments or strategies in this analysis. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Before acting on information in this analysis, you should consider whether it is suitable for your circumstances and strongly consider seeking advice from your own financial or investment adviser to determine the suitability of any investment.