Stock Market Today: Did Micron Lead a Bottom in Memory Stocks? 


If there’s no catalyst to sell, is the only option to buy? That’s what it feels like as the stock market continues to grind to new highs on a seemingly daily basis. That was the case in the stock market today, with the SPDR S&P 500 ETF (NYSEARCA:SPY) hitting new highs again and climbing 0.4%.

But the talk of the day wasn’t about the stock market or the fact that there’s only a half-dozen full trading sessions left in the decade.

Instead, it was about memory.

Have Memory Stocks Hit Rock Bottom?

The call for the bottom in memory stocks is underway after Micron’s (NASDAQ:MU) latest earnings report. Ironically though, Micron stock is hitting new 52-week highs in the stock market today. If that’s not proof that the market is a forward-looking mechanism, I don’t know what is.

In any regard, Micron reported fiscal first-quarter earnings of 48 cents per share, a penny ahead of estimates. Revenue of $51.4 billion slipped 35% year-over-year but beat expectations by $100 million. Gross margins were slightly better than expected, while management’s Q2 outlook was roughly in line with revenue expectations and a little short on earnings.

It didn’t matter though, with shares rallying 2.8% on the day. That move is likely coming off management’s comments that the current quarter is the “cyclical bottom for our financial performance.”

It’s just the latest catalyst for a chip and memory space that has been on fire. Advanced Micro Devices (NASDAQ:AMD), Lam Research (NASDAQ:LRCX), Nvidia (NASDAQ:NVDA), Skyworks Solutions (NASDAQ:SWKS) and others all hit new annual highs on the day.

Movers in the Stock Market Today

Rumor has it that Apple (NASDAQ:AAPL) is talking with MGM for potential deals to increase its content for Apple TV+. A deal with MGM would mean access to the entire James Bond library, among other popular movies. Apple also talked with the Pacific-12 Conference, hoping to gain rights to certain sports.

Goldman Sachs (NYSE:GS) is reportedly negotiating a fine with the U.S. Justice Department somewhere in the range of $2 billion for the 1MDB scandal in Malaysia. Part of the deal may also require Goldman Sachs to admit guilt as well, as the bank allegedly ignored warning signs that led to its clients being fleeced for billions.

Even if the two sides agree, the situation won’t end there. Next, Goldman will have to deal with Malaysian authorities.

Match Group (NASDAQ:MTCH) had a beautiful setup on the charts, but that’s not why shares ripped 8.6% on Thursday. Instead, news that it would split with IAC (NASDAQ:IAC) drove the shares higher, while IAC shares also rose 7.8%. The “deal” should close in the second quarter of 2020, with both businesses becoming two independent companies.

The boards from both companies decided that a separation is what’s in the best interest of its shareholders. Hopefully they remain amicable in the future.

Earnings Roundup

General Mills (NYSE:GIS) was in focus on Thursday, after the company reported its second-quarter results. Earnings of 95 cents per share topped estimates by 7 cents, while revenue of $4.42 billion grew just 20 basis points year-over-year and slightly missed expectations.

However, organic sales did climb 1%, while both gross margins and operating margins rose year-over-year and beat estimates.

GIS stock was on our list of Top Stock Trades on Thursday, as shares coil in a tightening wedge.

Accenture (NYSE:ACN) reported earnings of $2.09 per share, beating expectations by a dime. Revenue climbed 7.1% year-over-year to $11.4 billion and beat expectations by more than $200 million. Shares are within inches of new 52-week highs now.

Darden Restaurants (NYSE:DRI) sank 6.3% despite beating on second-quarter earnings estimates and reporting in-line revenue results. Comparable-store sales growth of 2% was just below consensus estimates of 2.1%, while margins were slightly ahead of estimates. The midpoint of management’s full-year earnings outlook of $6.30 to $6.45 per share was a little light of consensus estimates, at $6.40 per share.

Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long AAPL and NVDA.

Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.

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