Good morning contrarians! Welcome to the Daily Contrarian, our morning look at events likely to move markets. It is Wednesday, June 26. The Bottom Line segment of today’s podcast starts at (3:49) for listeners who want to skip ahead. Be sure to check out the new ‘One Year Ago Today’ segment at the bottom of this page.
State of Play
Tech stocks recovered yesterday, swapping roles with large caps, which dropped. As we look at our board of indicators at 0630, there are few clues to any kind of direction:
Stock index futures are mostly hogging the break-even point. The Nasdaq is up 0.2% while the Russell 2000 which tracks small caps is down 0.3%. S&P 500 and Dow Industrials are stuck in the middle, unchanged;
Some individual stocks are moving higher, led by Rivian Automotive (RIVN 0.00%↑), which is up 37% (not a typo) overnight after announcing some deal with Volkswagen. FedEx (FDX 0.00%↑) is up 14% after earnings impressed investors after yesterday’s close. Micron (MU 0.00%↑), which reports earnings later today, is up 3%. Nvidia (NVDA 0.00%↑) 2% to the good;
Commodities are pretty quiet as well, with WTI crude oil up almost 1% to trade around $81.50/barrel and copper unchanged;
Bonds are selling off a bit for some reason. The 2-year yield is up 5 basis points to 4.74% whilst the 10-year is up 4bps to 4.28%;
Cryptos are flat with Bitcoin changing hands around $61,200.
Today’s Known Events
General Mills (GIS 0.00%↑) and Paychex (PAYX 0.00%↑) report earnings before the open at 0930. After the close the main event is Micron (MU 0.00%↑) but we will also hear from Levi Strauss (LEVI 0.00%↑). So the latest look into the chipmaker economy along with quite a bit in the way of consumer staples — processed foods (General Mills) and jeans (Levi' Strauss).
New home sales are out at 1000. Economists who were surveyed expect an increase of 636,000 sales in May, about equivalent to the previous month’s 634,000. This is not a very closely watched metric of the US real estate market and as such will probably have only limited or no impact on markets.
The Bottom Line©️
Just like that tech seems to have reclaimed the upper hand after a four day losing streak. Was that it, then? Is the intermittent low in Nvidia (NVDA 0.00%↑) and other chip names already in? Likely Micron earnings tonight should go a long way toward determining the next move there.
The rest of us can watch other companies’ earnings for signs of economic malaise. FedEx certainly didn’t deliver anything on that front. FDX management said they anticipated continued growth in e-commerce. A lot of the positive news from earnings were due to cost cutting initiatives however.
One Year Ago Today…
A bizarre series of events in Russia failed to shock — or even impact — markets. This after a weekend where the Russian state seemed on the verge of implosion (Daily Contrarian, June 26, 2023).
…and What Happened:
A year later still nobody knows exactly what happened with the apparent coup attempt, march on Moscow, and quick cessation of hostilities. It turns out investors were right not to worry. Stocks and even commodities barely budged and continued on their merry way. A year on, nobody seems to even remember these events. Nor does Russia-Ukraine hold much in the way of investor interest.
Housekeeping
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Micron, General Mills Earnings