• Fed price lower, FOMC dot-plot, Powell feedback shall be in focus this week.
• Micron presents vital upside potential backed by sturdy earnings progress and robust demand for its AI-related merchandise.
• Nike faces mounting challenges, with declining revenues, a cautious outlook, and mushy shopper demand suggesting additional draw back for its inventory value.
• Searching for extra actionable commerce concepts? Subscribe right here for 55% off InvestingPro as a part of our Cyber Week Prolonged sale!
U.S. shares closed principally decrease on Friday, with the posting its longest run of losses since 2020, as traders priced in the potential of the Federal Reserve chopping charges extra slowly subsequent yr.
For the week, the blue-chip Dow fell 1.8%, the dipped about 0.6%, whereas the tech-heavy tacked on round 0.3% to safe its fourth consecutive week of beneficial properties.
Supply: Investing.com
The blockbuster week forward is anticipated to be a busy one crammed with a number of market-moving occasions, together with the Fed’s last financial coverage assembly of 2024. An official assertion is due at 2:00PM ET on Wednesday. Fed chair Jerome Powell will converse at 2:30PM ET.
With a 25-basis level price lower assured, traders will concentrate on the central financial institution’s steerage on rates of interest amid indications Powell may sign a pause in coverage easing.
In the meantime, on the financial calendar, most vital shall be Tuesday’s U.S. retail gross sales report, which can shed additional mild on the well being of the economic system. The non-public consumption expenditures value index studying for November, due Friday, may also be carefully watched.
Supply: Investing.com
Elsewhere, on the earnings docket, there are only a handful of company outcomes due, together with Nike (NYSE:), FedEx (NYSE:), Micron Know-how (NASDAQ:), Lennar (NYSE:), Basic Mills (NYSE:), and Carnival (NYSE:) as Wall Road’s reporting season attracts to an in depth.
No matter which path the market goes, beneath I spotlight one inventory more likely to be in demand and one other which may see contemporary draw back. Keep in mind although, my timeframe is simply for the week forward, Monday, December 16 – Friday, December 20.
Inventory to Purchase: Micron
Micron is poised for a stable week because the reminiscence chip maker gears as much as report its fiscal first-quarter outcomes on Wednesday at 4:05PM ET. A name with president and chief govt officer Sanjay Mehrotra is about for five:00PM ET.
Market contributors count on a large swing in MU inventory after the replace drops, in keeping with the choices market, with a doable implied transfer of +/-11.7% in both path. Earnings have been catalysts for outsized swings in shares this yr, with MU surging almost 17% when the corporate final reported quarterly numbers in September.
Wall Road anticipates sturdy earnings pushed by sturdy demand for its Excessive-Bandwidth Reminiscence (HBM3E) chips, that are very important for AI and cloud computing purposes.
Including to the bullish sentiment, 16 of the 24 analysts surveyed by InvestingPro have revised their earnings estimates upward over the previous three months. 
Supply: InvestingPro
Micron is seen incomes $1.77 a share, reversing a pointy year-ago lack of $0.95 per share, signaling a major restoration after a difficult interval within the reminiscence market. Income is forecast to soar 83.9% yearly to $8.70 billion, benefiting from gross sales of high-bandwidth reminiscence units to information facilities operating AI purposes.
The Boise, Idaho-based firm performs a crucial position in powering developments in AI, cloud computing, and 5G connectivity with its modern DRAM and NAND merchandise.
Trying forward, I imagine Micron’s administration will present stable steerage for the present quarter to replicate sturdy reminiscence demand from cloud suppliers as progress prospects in synthetic intelligence stay sturdy. Micron’s groundbreaking HBM3E expertise, a key enabler for AI workloads, is anticipated to be a cornerstone of its progress technique.
MU inventory ended Friday’s session at $102.50. At present ranges, Micron has a market valuation of $113.7 billion. Shares, which reached an all-time excessive of $157.54 on June 18, are up 20.1% within the year-to-date.
Supply: Investing.com
It needs to be famous that Micron inventory stays undervalued in keeping with the InvestingPro Honest Worth mannequin and will see a rise of 8.5% to $111.22.
Make sure to try InvestingPro to remain in sync with the market pattern and what it means to your buying and selling. Subscribe now and get 55% off and place your portfolio one step forward of everybody else!
Inventory to Promote: Nike
In distinction, Nike, the worldwide athletic attire large, faces vital headwinds this week because it prepares to report fiscal second-quarter outcomes on Thursday at 4:15PM ET.
Regardless of its sturdy model recognition, the corporate is grappling with declining shopper demand for athletic put on and footwear, alongside provide chain challenges.
In accordance with the choices market, merchants are pricing in a swing of +/-7.7% in both path for NKE inventory following the print. Notably, shares gapped down after earnings up to now 4 quarters, and continued challenges recommend additional draw back.
Analysts have slashed their revenue estimates amid weakening working margins and slowing progress in North America and China, two of Nike’s largest markets.
Supply: InvestingPro
Nike is anticipated to publish a 37.8% drop in adjusted earnings per share to $0.64, with income projected to say no by 9.7% from the year-ago interval to $12.1 billion.
The sneaker large has confronted mounting challenges in latest quarters, fighting weakening demand for athletic footwear and attire amid a softening macroeconomic atmosphere.
The main target shall be on newly reappointed CEO Elliott Hill’s plans for a turnaround after the corporate pivoted to a direct-to-consumer mannequin, which has struggled to offset declining wholesale revenues.
NKE inventory – which fell to a 2024 low of $70.75 on August 5 – closed at $77.25 on Friday. At its present valuation, the Beaverton, Oregon-based sportswear retailer has a market cap of $115 billion. Shares are down 28.8% within the year-to-date. 
Supply: Investing.com
It needs to be famous that Nike has a beneath common InvestingPro ‘Monetary Well being’ rating of two.4 out of 5.0 as a consequence of ongoing issues over weakening gross revenue margins and spotty gross sales progress.
Whether or not you are a novice investor or a seasoned dealer, leveraging InvestingPro can unlock a world of funding alternatives whereas minimizing dangers amid the difficult market backdrop.
Subscribe now to get 55% off all Professional plans with our Cyber Week Prolonged supply and immediately unlock entry to a number of market-beating options, together with:
• ProPicks AI: AI-selected inventory winners with confirmed observe file.
• InvestingPro Honest Worth: Immediately discover out if a inventory is underpriced or overvalued.
• Superior Inventory Screener: Seek for one of the best shares primarily based on a whole bunch of chosen filters, and standards.
• High Concepts: See what shares billionaire traders comparable to Warren Buffett, Michael Burry, and George Soros are shopping for.
Disclosure: On the time of writing, I’m lengthy on the S&P 500, and the by way of the SPDR® S&P 500 ETF (SPY), and the Invesco QQQ Belief ETF (QQQ). I’m additionally lengthy on the Invesco High QQQ ETF (QBIG), Invesco S&P 500 Equal Weight ETF (RSP), and VanEck Vectors Semiconductor ETF (SMH).
I repeatedly rebalance my portfolio of particular person shares and ETFs primarily based on ongoing threat evaluation of each the macroeconomic atmosphere and firms’ financials.
The views mentioned on this article are solely the opinion of the writer and shouldn’t be taken as funding recommendation.
Observe Jesse Cohen on X/Twitter @JesseCohenInv for extra inventory market evaluation and perception.