My top 10 things to watch Wednesday, Sept. 30
1. Memory-chip giant Micron reports earnings tonight. Big test for the next leg of semiconductor stocks, which have been stalled post the spring and early summer run-up. That advance was clearly goosed by Situational Awareness, the heavily levered hedge fund forced to unwind trades in July. Club name Micron is 12% below its late June record close. The iShares Semiconductor ETF, known as the SOXX, is off 13%.
2. Oil looks ready to come down as the market is getting almost all of the barrels it used to. JPMorgan and Goldman Sachs separately estimated that Middle East oil exports are nearing pre-war levels. But there is a big "tax" on oil from shipping. Still, with the combo of oil coming down, softer data, and the big jump in yields, I think it might be time to cover bond shorts or buy some.
3. That buying pressure should help Treasury yields come off multi-year highs. Relatively encouraging August inflation data out this morning helps too. The Fed's preferred inflation gauge, the PCE price index, was up 3.4% on an annual basis in August, well below the 3.7% Dow Jones consensus. Odds of a Fed hike at its October meeting fell further, with traders now pricing in a hold, per the CME Group's FedWatch tool.
4. Even before the inflation numbers, I concluded the market is oversold enough that you need to be buying stocks. We will be buying some for the Club that came down during this period. The S&P Oscillator, my trusted momentum indicator, has been oversold for 14 sessions in a row.
5. Finally, some good news for Club name Boeing: the Pentagon selected the company to build the U.S. Navy's sixth-generation fighter jet, sending shares up more than 2% this morning. Northrop Grumman was seen as the favorite to win the contract; it's down 4%. Next potential catalyst for Boeing is expected tomorrow afternoon: results from the engineering union's labor contract vote.
6. Rosenblatt said stop sweating the impact that Meta's Muse and other AI agents shopping on behalf of people will have on Amazon. Analysts argued that Amazon can navigate through any advertising disruptions "largely unaffected," with its e-commerce business overall being a net beneficiary of agentic commerce. Big price target increase too: $360 from $335, implying 46% upside. Club name.
7. Amazon isn't the only stock caught up in Wall Street's latest bout of AI disruption fears. We covered the so-called consumer inertia trade last night on "Mad Money," which has ensnared stocks like Planet Fitness, Booking Holdings, Airbnb and even Charles Schwab. While there's no denying Muse is having an impact on these names, Airbnb does look like a steal down here.
8. Bernstein initiated coverage of Corning with a hold rating and price target of $140, implying almost 12% downside. Nevertheless, analysts said they're positive on networking and optical companies overall thanks to the AI buildout. We used to own Corning for the Club. Made plenty of money on it, but exited the volatile position on Sept. 1 to lighten up on data center exposure. Nobody ever got hurt taking a profit.
9. Robinhood is up more than 4% this morning after unveiling a bunch of new products at its Active Trader Summit. This includes weekend trading for certain stocks and ETFs, perpetual futures for eligible customers, and agents inside the Robinhood App. Morgan Stanley liked what it heard, saying it reinforced its buy recommendation. I'm impressed by what CEO Vlad Tenev has built, especially with the younger cohort. Also less levered to crypto now.
10. MongoDB's investor day yesterday was a net positive on the heels of its ex-CEO's surprise exit to start the week, Bank of America argued. Morgan Stanley said the event demonstrated a "compelling growth story" for the database management company. After plunging 18.5% on Monday, shares stabilized in yesterday's session, rising 0.75%. They're slightly higher again premarket. Still plenty of uncertainty around this name, but having old CEO Dev Ittycheria back in the interim is a calming force.
