|Day's Range||3.5000 - 4.0000|
Huawei founder and CEO Ren Zhengfei says his company is reviewing future contracts with U.S. suppliers.
Huawei wrote in an emailed statement that the lay-offs, effective as of Monday, were “due to the curtailment of business operations” caused by Washington putting Huawei on the US “Entity List”. The ban means that Futurewei, which is based in California and incorporated in Texas, can no longer transfer US-originated technologies back to Huawei, thus scuppering the original aims of the research arm. Donald Trump's U-turn on Huawei — what did he actually mean?
(Bloomberg) -- The U.S. and China are moving closer to their first face-to-face trade negotiations in months, with a meeting between tech chief executives and President Donald Trump on Monday marking another step toward easing a ban on sales to China’s Huawei Technologies Co.The White House invited many of the U.S.’s biggest technology companies to discuss economic issues including a possible resumption of sales to Huawei. Trump and senior administration officials met with CEOs from Alphabet Inc.’s Google, Broadcom Inc., Cisco Systems Inc., Intel Corp., Micron Technology Inc., Western Digital Corp. and Qualcomm Inc., according to White House spokesman Judd Deere.“The CEOs expressed strong support of the president’s policies, including national security restrictions on United States telecom equipment purchases and sales to Huawei,” Deere said. “They requested timely licensing decisions from the Department of Commerce, and the President agreed.”The meeting between government officials and U.S. technology leaders may assuage Chinese concern that one of its largest technology companies is under existential threat from a blacklisting. But lawmakers and others in the administration who oppose any relief for Huawei could stymie any tentative progress in resolving a trade dispute between the world’s two largest economies.Negotiating MissionChinese state media on Monday hailed signs of progress on Huawei as part of what it called efforts to display “sincerity and goodwill’’ by both sides. Any easing of restrictions on Huawei is expected to be met with a resumption of Chinese purchases of U.S. soybeans and other agricultural commodities.The moves, which followed a meeting between Trump and China’s Xi Jinping in Japan late last month, are meant to clear the way for a trip to China by U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin as soon as next week.Such a trip would mark the first high-level negotiating mission to China since talks broke down in May.Business PerspectiveNational Economic Council director Larry Kudlow and Mnuchin led the meeting, which also included Commerce Secretary Wilbur Ross. Lighthizer attended as well, according to people familiar with the gathering. It was called to inject a business perspective into a debate that has often been driven by an intelligence and national security community eager to see an outright ban on Huawei, one of the people said.Xiaomeng Lu, international policy manager and head of the China practice at Access Partnership, said the meeting is an opportunity for U.S. companies to demonstrate how resuming sales to Huawei’s consumer business can help American corporations innovate better and outperform the Chinese telecoms giant in the long run.Trump will very likely face backlash from Congress if he chooses to allow shipments to the Chinese telecoms giant, especially after the Washington Post Monday reported that the company helped build North Korea’s 3G network in a potential violation of U.S. export control laws.Legislative Push BackMany U.S. lawmakers, including hawks in Trump’s own party, are opposed to the president’s approach on the issue and have made the case for a complete decoupling of supply chains that would cut off Huawei from American components.“At every turn, we learn more and more about what a malign actor Huawei is,” Senators Tom Cotton and Chris Van Hollen said in a statement following the Washington Post report. The revelation underscores Huawei’s serial violations of U.S. law, they added, saying it’s crucial Congress pass legislation they’ve sponsored.A spokesman for the Commerce Department, which oversaw the blacklisting of Huawei in May, declined to comment.Semiconductor TechnologyMost of those invited are suppliers of technology to Huawei, one of the biggest makers of smartphones and computer-network equipment. The chipmakers in particular have said that a blanket ban on doing business with the Chinese company may do more harm than good to U.S. national security.Many of the components they supply to Huawei can be easily obtained from companies elsewhere and jeopardizing their access to their biggest market risks cutting them off from revenue that’s vital to investing in their ability to maintain the U.S.’s lead in semiconductors, they’ve argued.Intel said in an emailed statement after the meeting that the company appreciated the opportunity to share its “perspective on economic issues, including how the current trade situation with China impacts the critical US semiconductor industry."Micron CEO Sanjay Mehrotra said the company appreciated the opportunity to meet and stressed that "open and fair trade are essential to ongoing U.S. technology leadership."Chinese companies, meanwhile, have begun asking U.S. exporters about buying agricultural products and also applied for exemptions from China’s retaliatory tariffs on the goods, state-run Xinhua News Agency reported Sunday.The Chinese government met Friday with domestic soybean buyers about a plan to purchase more U.S. supplies, according to people familiar with the situation. That could include waiving China’s retaliatory tariffs, but details have not been decided yet, the people said.Face-to-FaceWith China’s top leadership likely to be out of Beijing from early August for their annual seaside conclave, people close to the talks say there is a narrow window for face-to-face meeting in the coming two weeks. Mnuchin, Lighthizer and their Chinese counterparts talked by phone last week for the second time since the two nations’ presidents met.Separate to the possible agricultural purchases, China announced Saturday new measures to further open up the nation’s financial sector to foreign investors. Foreign companies will be able to take a stake in or control entities including wealth management units of commercial lenders, pension fund managers and currency brokers.The changes weren’t announced as directly related to the trade talks with the U.S., but American criticism of China’s protection of various domestic markets is a core issue in the ongoing trade tensions.(Updates with Micron statement in 17th paragraph.)\--With assistance from Miao Han, Justin Sink, Laura Litvan and Mark Milian.To contact the reporters on this story: Shawn Donnan in Washington at email@example.com;Jenny Leonard in Washington at firstname.lastname@example.org;Ian King in San Francisco at email@example.comTo contact the editors responsible for this story: Margaret Collins at firstname.lastname@example.org, Alister BullFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Investors have been holding their breath for a Fed rate cut for a while now. But are they prepared in the event that that doesn't happen?
President Trump has previously suggested that banning American companies from making sales to Huawei could become a bargaining chip in his trade war with China, despite calling the company “very dangerous” for national security.
IBD Stock Of The Day: VanEck Vectors Semiconductor ETF is in buy range, offering a way to play the chip stocks rally while limiting company-specific risk on names like Intel, AMD and Micron.
After a bruising close on Friday, U.S. stocks bounced back a bit on Monday. That's as investors gear up for some big-time earnings reports later this week. By individual stock standards, the mellow trading days this week are over once we hit Tuesday. Let's look at some top stock trades going forward. Top Stock Trades for Tomorrow 1: Aurora Cannabis Click to EnlargeEarlier this month we pointed out the bearish setup developing in Aurora Cannabis (NYSE:ACB), which was a bearish descending triangle. We saw a robust rebound in the ensuing days, but it was merely a check-back trade to resistance.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Stocks to Buy This Summer Earnings Season On Monday, shares broke below last week's lows and are looking increasingly unattractive. While this one may be too risky for investors to hold outright short, I wouldn't be long until ACB either gets significantly cheaper or it can clear overhead resistance.Right now, that's between $7.25 and $7.75. Top Stock Trades for Tomorrow 2: Beyond Meat Click to EnlargeShares of Beyond Meat (NYSE:BYND) will report earnings on July 29th, but the stock is heating up on Monday, up over 11%.Beyond Meat stock burst through $175 resistance and is now hitting the backside of prior uptrend resistance (blue line). If I'm long BYND stock coming into Monday, I'm taking some or all profits on this move.I wouldn't be surprised to see the stock take out its $201.88 high ahead of earnings, but I would be de-risk ahead of the event if I'm trading (not owning) the name. Top Stock Trades for Tomorrow 3: Micron Click to EnlargeWe have been flagging Micron (NASDAQ:MU) for InvestorPlace readers all month. Earlier this month, we pointed out that Micron was running into resistance near $44 to $45. On Friday we said the stock is breaking out and on Monday we're seeing a big move higher on a Goldman Sachs upgrade.So what now?Let's see if the stock can continue higher and fill the gap back toward $49.50. Otherwise, I would love a pullback in the next day or two down to $45 or $46. Traders can buy that pullback, with a close below $44 as their stop.If the pullback finds support, a move toward $49.50+ could be in the cards. Top Stock Trades for Tomorrow 4: Luckin Coffee Click to EnlargeMaybe it's the insane run in Starbucks (NASDAQ:SBUX) helping fuel the nice breakout in Luckin Coffee (NASDAQ:LK). At the end of the day though, the "why" doesn't matter so much as the "what" -- and what's happening here is a nice move to the upside.Shares are surging more than 8% as momentum traders pick up on the scent. LK has been building a beautiful post-IPO wedge for a few months now and is now resolving higher.A move over $22 would be most attractive, but we also need to see if it will act as resistance. On the downside, see that prior downtrend resistance (blue line) acts as support. Top Stock Trades for Tomorrow 5: Blackstone Click to EnlargeBlackstone (NYSE:BX) reported earnings last week, but the stock was relatively muted after doing so. That's not the case on Monday, up almost 5% and hitting 52-week highs in the process. * 7 Defense Stocks to Buy to Fortify Your Portfolio I love this name, as it made a perfect check-back down to its 20-day moving average and consolidated a bit ahead of -- and after -- earnings. Now hitting new highs, let's see if BX can maintain above $47 to $47.50. If it can, $50 could be in the cards.Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Defense Stocks to Buy to Fortify Your Portfolio * 10 High-Flying, Overvalued Stocks in Danger of Crashing * 8 Stocks to Buy That Are Growing Faster Than Amazon The post 5 Top Stock Trades for Tuesday: ACB, BYND, MU appeared first on InvestorPlace.
The US markets are up today as Wall Street braces for a busy earnings week. The S&P; 500 ETF is up 0.3%, and semiconductor stocks lead the market's gains.
Technology stocks shouldered much of the stock market's gains Monday, with the sector nearly alone in making gains.
The S&P 500 index pared early gains to tread water on Monday, as investors awaited key central bank meetings for direction on the path of interest rates and earnings from marquee names including Facebook and Amazon that are set to report this week. Shares of Boeing Co fell 1.3% after rating agency Fitch revised its outlook on the planemaker to "negative' from "stable", pressuring the blue-chip Dow index, while the tech-heavy Nasdaq was lifted by chipmakers. "Markets are struggling to hold early gains as investors start to fret about key upcoming central bank meetings.
The semiconductor stock group got a boost Monday when Goldman Sachs updated its coverage on some popular names. The Analysts Goldman analyst Mark Delaney upgraded Micron Technology, Inc. (NASDAQ: MU ) ...
Micron (MU) shares have surged over 37% during the past month, as investors are increasingly optimistic that the chip giant is finding its way out of trouble. For one, the US-China tensions seem to be cooling, which is especially important to Micron has it generates half of revenue from China. DRAM prices are also inching higher, spurred in part by another trade dispute between Japan and South Korea. As memory prices are expected to eventually rise, this will spur Micron revenue (and stock). So how much higher can Micron stock go? RBC Capital analyst Mitch Steves maintains his Outperform rating and $55 price target, which implies nearly 17% upside from current levels. (To watch Steves' track record, click here)Pricing remains a main concern for Micron and its investors. However, global market research firm DRAMeXchange has revealed that DRAM pricing has increased in the past two weeks. As a result, Steves believes Micron will raise prices,” which “are a solid indicator for Micron's future stock price as well.” Steves also looks at the DXI, DRAMeXchange’s index, which is calculated by multiplying the mainstream DRAM chips with their respective spot prices. The analyst says there is a strong correlation between Micron’s stock and the index, as Micron generates about 66% from DRAM sales. As the DXI has risen over the past few weeks, Steves sees the stock following suit. Aside from the index, Steves says the potential for a supply/demand constraint in 2020 is becoming more likely. The analyst points out that “this were to occur, after memory moves up we would look for a semi-cap equipment demand change as well “ but that it is “quite difficult to look out 18 months.” Though the analyst is bullish on Micron, he doesn’t think that things are all clear. Steves must see 1) clear signs of data center spend, and 2) clear signs of normal smartphone demand before we see the stock re-rating higher.” So far, “only TSMC (Taiwan Semiconductor Manufacturing Company) has confirmed this view.”All in all, after a weak Q2, Wall Street thinks things are turning around for Micron. As the US-China tensions ease and pricing is expected to increase, the signs are pointing in the right direction. TipRanks analysis of 22 analyst ratings shows a Moderate Buy rating, with 12 analysts recommending Buy, six saying Hold and four suggesting Sell. As Micron’s stock has risen over 10% in July, some analysts have not yet updated their price targets, as reflected by a lower-than-market average price target of $43.95. (See MU's price targets and analyst ratings on TipRanks)
Memory companies appear to be depleting their NAND inventories more quickly than anticipated, and that’s good news for Micron Technology Inc., according to Goldman Sachs.
Goldman analyst Mark Delaney raised his rating for Micron stock to Buy from Neutral, predicting improvement in flash memory pricing.
U.S. stocks rose on Monday, lifted by technology companies, as investors eyed fresh U.S.-China trade developments during a busy week of corporate earnings with results from marquee names including Facebook and Amazon on tap. The South China Morning Post reported U.S. trade negotiators will likely visit China next week for their first face-to-face talk with Chinese officials since the G20 meeting, when Trump held off on fresh tariffs on Chinese goods. Facebook Inc, Amazon.com Inc and Google-parent Alphabet Inc, up between 0.1% and 1%, are reporting between Wednesday and Thursday.
The Nasdaq led stocks higher Monday as three chip stock upgrades sweetened early trade. Disney topped the Dow Jones industrial index.
(Bloomberg) -- Semiconductor companies could see an improvement in inventory levels faster than previously anticipated, according to Goldman Sachs, which upgraded a number of companies “on early signs of memory stabilization.”Micron Technology Inc. was lifted to buy from neutral, as were Lam Research Corp. and Applied Materials Inc., the latter of which was added to Goldman’s Conviction List. KLA Corp. was upgraded to neutral from sell.“We are now more positive on global memory stocks as we believe that the excess inventory memory companies are carrying will be depleted faster than our previous expectations,” wrote analyst Mark Delaney, who pointed to a June outage at Toshiba Memory Corp. that had reduced production. This power failure was also seen as providing support to pricing and inventory levels at Western Digital Corp.While Goldman had previously expected supply and demand for NAND memory chips to improve in 2020, “our most recent industry discussions suggest that NAND pricing could start to improve from low levels” in the third quarter of 2019. According to data compiled by Bloomberg, Micron derived more than 25% of its 2018 revenue from trade NAND chips.Micron “is the best stock to express our view” on improving memory trends, the firm wrote, raising its price target to $56 from $40. Shares gained 3.6% to trade at their highest level since September. The stock is up more than 40% from a low in late June, and is poised for its fourth straight positive session.Applied Materials gained 3.8%, while KLA rose 1.3%. Lam jumped 3.2% and was on track for its ninth positive session of the past 10 trading days.“While visibility is limited in the near term and, we see downside to 2H19/2020 Street estimates, we believe disciplined supply-side actions from the memory manufacturers” will support both improvements in supply and demand, as well as higher levels of Wafer Fab Equipment spending in 2020, Goldman wrote.The firm also lifted its price target on Western Digital to $54 from $46, but kept its neutral rating, citing “better valuation support for Micron,” as well as a recently rally in Western’s stock, which Goldman wrote had priced in improving fundamentals.(Updates to market open in fifth and sixth graphs)To contact the reporter on this story: Ryan Vlastelica in New York at email@example.comTo contact the editors responsible for this story: Catherine Larkin at firstname.lastname@example.org, Steven FrommFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Micron (NASDAQ: MU) stock is on a tear. MU stock has rallied from less than $33 at the end of June to over $47 today. Several factors, including a surprise earnings beat and the possible U.S.-China trade war detente, have improved investors' confidence in the semiconductor manufacturer's future prospects.But can Micron stock rise further? Could trade relations between the U.S. and China deteriorate further? Read on to learn more about the risks and opportunities provided by MU stock. Source: Shutterstock What's Behind the Recent Rally of MU Stock?What has propelled Micron stock up about 40% in the last month? A strong earnings report, for one. While its sales slumped from $7.8 billion in the fiscal third quarter of FY18 to $4.79 billion in Q3 of FY19, Micron beat analysts' average estimates last quarter, forecasting increased demand in the current quarter for both DRAM and NAND memory chips.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Defense Stocks to Buy to Fortify Your Portfolio Another strong factor behind Micron's rally is the easing of tensions between the U.S. and China , including the resumption of sales by U.S,. firms to Huawei. As InvestorPlace contributor Brad Moon pointed out in a recent article, half of Micron's sales come from China, with Huawei alone providing 17% of MU's revenues. Micron lost big when the U.S. government banned sales by American companies to Huawei, and MU would have been meaningfully, negatively affected if the trade war had accelerated.But despite this bit of good news, MU still has risk from China. While the two powers are mutually dependent on each other for trade, international relations could turn on a dime. Taking a position in MU stock is a big bet on a trade-war resolution.The third factor that has boosted Micron stock is the Japan-South Korea trade war. The spat started when South Korean courts began ruling in favor of compensation for people subjected to forced labor during the Japanese occupation of Korea. Japan believes this issue was settled long ago and refuses to back down. Tokyo has retaliated by banning the export of chemicals vital to semiconductor production to South Korea.This trade dispute could raise the price of semiconductors, and reduce a global inventory glut of the chips. That would be good news for Micron, which, like the rest of the chip sector, needs signs of a demand pickup to move the needle for its stock. MU has a large amount of inventory. The company has 151 days of inventory on hand, nearly twice that of its competitor, Samsung.Regarding the Japan-South Korea trade war, there are a few caveats. Some analysts believe that the trade restrictions will have minimal impact on memory-chip demand. This shows that DRAM/NAND prices won't rise without additional positive catalysts. Cheap on Paper, But Future Earnings Impacted by Chip GlutInvestors looking at Micron's current fundamentals may see the company as a screaming buy on value alone. That's because: * Its trailing 12-month price-earnings ratio is five * Its forward P/E is eight * Its enterprise value/ EBITDA ratio is 2.9But these low earnings multiples must be taken in context. MU's earnings are expected to decline, due to the oversupply glut. DRAM and NAND prices need to pick up before MU's earnings can rebound.Analysts' estimates for MU's 2020 earnings per share range from $1.07 per share to $2.44 per share. Compare that to MU's diluted EPS over the last year of $8.65, and it is clear that MU 's PE ratio is not low.However,investors who buy MU stock may be getting a strong entry point, even if they are not buying Micron stock at the bottom. MU stock will still have significant runway if the memory chip market materially improves over the next few years.The question is, when will the semiconductor market turn around? Will an economic slowdown in the next two years reduce memory chip demand further? There are many factors that make the outlook of MU stock tough to determine. MU Stock Feels Like a Value Trap, But Could Go HigherA global glut in semiconductors, especially memory chips, has beaten down MU stock. Assuming that that the chip market has not yet bottomed, it could take years for MU's earnings to rebound.At current multiples, MU stock looks like a deep value play. But its low valuation is a lagging indicator, as seen from analysts' future earnings estimates. Investors should not view the trailing and forward P/E ratios as clear signs that Micron stock is cheap. MU's negative future outlook coupled with a deceptively low trailing earnings multiple make MU stock feel like a value trap.However, with macro factors improving Micron's prospects, MU's fiscal Q4 results could beat expectations , sending Micron stock even higher.Micron stock may have bottomed when its book value previously dropped to $32 per share. Investors may get a strong buying opportunity if shares fall back to that level. Nevertheless, MU stock's risk/return ratio may be favorable at its current levels.As of this writing, the author did not own shares of any of the companies mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Defense Stocks to Buy to Fortify Your Portfolio * 10 High-Flying, Overvalued Stocks in Danger of Crashing * 8 Stocks to Buy That Are Growing Faster Than Amazon The post Micron Stock Is Still Worth Buying After Its Recent Rally appeared first on InvestorPlace.
Shares of Micron Technology Inc. are up 2.7% in premarket trading Monday after Goldman Sachs analyst Mark Delaney upgraded the stock to buy from neutral, reflecting his growing optimism on memory stocks and his view that companies with excess inventory will be able to deplete their inventory more quickly than anticipated. "We believe that Micron is the best stock to express our view," he wrote. "Importantly, we believe that Micron's stock will trade more on memory pricing trends and intermediate term EPS expectations than FY20 earnings." Delaney is skeptical that Chinese companies will be able to enter the DRAM market in the next few years given their limited progress in the area thus far. He raised his price target Micron's stock to $56 from $40. Shares are up 43% so far this year, as the S&P 500 has gained 19%.
Wall Street's main indexes were set to open higher on Monday as investors eyed fresh trade developments between the United States and China during a busy week of corporate earnings, with results from marquee names including Facebook and Amazon on tap. The South China Morning Post reported U.S. trade negotiators will likely visit China next week for their first face-to-face talk with Chinese officials since the G20 meeting, when Trump held off on fresh tariffs on Chinese goods.
On July 18, New York Fed President John Williams's speech increased the Fed rate cut probability. He highlighted the importance of the Fed acting quickly.