Micron drops despite ‘a great quarter.’ Why Cramer is sticking with the stock
Every weekday, the CNBC Investing Club with Jim Cramer holds a «Morning Meeting» livestream at 10:20 a.m. ET. Here’s a recap of Thursday’s key moments. 1. Stocks fell Thursday as long-term Treasury yields climbed to levels not seen in more than two decades. The benchmark 10-year yield rose as high as 5.34%, its highest since 2002, after the Institute for Supply Management’s prices-paid index came in hotter than expected, reinforcing expectations that the Federal Reserve could raise interest rates again this year. West Texas Intermediate crude also climbed above $92 a barrel, adding to the pressure on yields. Jim Cramer said the market needs softer economic data to bring yields down and ease the pressure on stocks. The higher yields make bonds look like a more attractive place to put your money relative to equities. The S & P Oscillator is firmly oversold at negative 5.1%, but with yields this high, Jim cautioned that stocks could remain under pressure even at more attractive prices. Our trusted momentum indicator, the Oscillator is a technical indicator used to gauge whether the market has moved too far in one direction and could be due for a reversal. 2. Micron shares dropped despite delivering what Jim called a «great quarter» Wednesday evening. Some investors may be concerned about Micron’s first-quarter gross margin outlook and its plans for increased capital spending on manufacturing capacity, which could lead to excess memory supply and ultimately drive prices power. But those worries overlook Micron’s encouraging long-term commentary on the supply-demand imbalance. The company now has 26 strategic customer agreements, up from 16 last quarter, providing greater visibility into future demand. Jim said the outlook for the next couple years is «the best that I’ve ever heard,» though he acknowledged the stock could remain under pressure in the near term. «There’s a momentum to the downside here that I think has to be respected,» he said. Another catalyst could come in December, when restrictions tied to U.S. government funding expire and Micron is allowed to deploy its growing cash pile toward a potentially significant buyback. «I don’t know why you’d sell it now» ahead of the buyback kicking in, Jim said. 3. Shares of Cardinal Health rose more than 3% Thursday after the drug distributor extended its pharmaceutical distribution agreement with CVS Health through June 2032. In conjunction, Cardinal reaffirmed its fiscal 2027 outlook for 13% to 15% adjusted earnings-per-share growth, along with its long-term EPS expansion guidance. Reiterating both outlooks «suggests a continuation of current economics» with CVS, portfolio director Jeff Marks said. There’d been some concern among investors that the contract negotiations could result in Cardinal and rival McKesson seeing their take rate squeezed in a detrimental way. Thursday’s update from Cardinal reinforces our decision to buy the stock last week after a slight pullback, and adds to a string of strong results and raised outlooks. Cardinal Health is set to report first-quarter earnings for fiscal year 2027 on Nov. 5. 4. Stocks covered in Thursday’s rapid fire at the end of the video were: McCormick , Accenture , and Toll Brothers . (Jim Cramer’s Charitable Trust is long CAH, MU. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
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