In today’s briefing:
- Micron. Earnings Puts & Takes. Take Your Pick
- [Counting Beans #3]: Soybean Price Remains Solid But Headwinds On The Horizon
- Oil Watch: Why is demand RECORD high, when we are told the opposite?
- AI PC Reality Check: PC Upgrade Cycle Ahead, But Worth a 50% 1M Acer Rally? Long Dell Vs. Short Acer
- EQD | The S&P500 WEEKLY Rally Is At A Crucial Fork: Higher or Lower?
Micron. Earnings Puts & Takes. Take Your Pick
- Q1FY24 revenues of $4.7 billion, up 18% QoQ and up 16% YoY, and $100 million above guided high end, as already flagged on November 28
- Q2FY24 guidance of $5.3 billion, a ~13% increase QoQ. This will once again be loss-making quarter to the tune of an EPS loss of 28 cents.
- Things are looking up for Micron, but 2024 will still be a “recovery” year.
[Counting Beans #3]: Soybean Price Remains Solid But Headwinds On The Horizon
- Brazil’s weather forecast remains mixed on showers with heavy rains to arrive only in January. Rainfall in Brazil’s key agricultural region.
- U.S. soybean net sales show a significant uptick, but recent lack of large export sales could signal a slowdown in demand.
- Asset managers reduce long positions in soybean futures and options, showing a shift towards a bearish market outlook but prices remain resilient above USc 1,300.
Oil Watch: Why is demand RECORD high, when we are told the opposite?
- Oil has been one of the few movers during the quiet days of Christmas and therefore we thought we would run down the news driving crude oil markets and deliver our takes.
- We start with crude oil exports where the latest m/m numbers reveal that the US has seen a 4.65% drop in export numbers in line with seasonal effects.
- The fewer seaborne barrels paired with tensions in the Red Sea have added to the momentum for oil prices, but we also note that the EIA has started to ramp up SPR buying again with contracts signed for the purchase of 3 million barrels.
AI PC Reality Check: PC Upgrade Cycle Ahead, But Worth a 50% 1M Acer Rally? Long Dell Vs. Short Acer
- Taiwan PC makers have been top performers in the market; some may worry that their rallies have become over-extended by too much AI PC excitement.
- We believe Dell may present a Long opportunity as the Long side to a Long/Short trade whereby one Sells Acer against it. Acer rose over 50% in December.
- Dell will report its results end-February. We would Long Dell vs. Short Acer ahead of the Dell earnings event. We see more upside surprise potential in Dell.
EQD | The S&P500 WEEKLY Rally Is At A Crucial Fork: Higher or Lower?
- The S&P 500 INDEX has been closing up for 9 consecutive weeks (CC=+9). In theory it could go higher for another 3 weeks, but it is ultra-OVERBOUGHT.
- The market has moved past the Tails resistance limit at 4747 this last week, rallying more than +15% from the bottom on October 26th.
- A SHORT trade may not be effective but being prepared for a pullback is a good idea, maybe just to add positions at better prices (assuming the rally will continue).
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