A Key Indicator for the Fed and Micron's Earnings Report: What Investors Should Watch This Week

Following a short trading week due to Liberation Day on June 19, investors can expect an event-filled calendar. Market participants will be watching for the release of the Personal Consumption Expenditures (PCE) index—the Fed’s preferred measure of inflation. The data will help gauge how persistent price pressures remain in the world’s largest economy and whether expectations of another rate hike—which have intensified following the release of the Fed’s updated forecasts—are justified, explains The Motley Fool.

The main corporate events will be the earnings reports from logistics giant FedEx and memory chip manufacturer Micron Technology, one of the key beneficiaries of the artificial intelligence boom. CNBC believes that Micron’s forecasts and comments could influence sentiment across the entire semiconductor sector and signal to Wall Street whether one of the most successful segments of the AI market still has potential for further growth.

On Monday, June 22, Ennis, a manufacturer of printing products, will release its quarterly financial results.

On Tuesday, June 23, S&P Global will release preliminary Purchasing Managers’ Index (PMI) readings for the U.S. manufacturing and services sectors for June. The consensus forecast calls for a slowdown in manufacturing activity from May’s reading of 55.1 points to 54.5 points and an acceleration in the services sector from 50.7 points to 51.2 points, according to Barron’s.

After the market closes, FedEx will report its earnings. The company completed the spin-off of its FedEx Freight cargo division into a separate publicly traded company in early June and is now focused on express delivery and parcels. Investors traditionally view FedEx’s results as an indicator of the state of the U.S. economy. The market will pay particular attention to management’s comments on shipping demand in the second half of the year, according to The Motley Fool.

Cerebras Systems, an AI chip developer that competes with Nvidia, will release its quarterly results for the first time since its IPO. The market is also awaiting financial results from cruise operator Carnival and homebuilder KB Home.

On Wednesday, June 24, Micron Technology—one of the world’s largest manufacturers of memory chips, including high-speed HBM used in AI servers—will report its earnings . Demand for HBM continues to significantly outpace supply, and rising memory prices have already forced major buyers of AI infrastructure to increase their budgets. In particular, Microsoft reported that part of its capital expenditure growth is specifically due to rising component costs. And Apple CEO Tim Cook warned that a memory shortage could lead to higher prices for the company’s devices. Micron’s results could impact the entire semiconductor sector—from Nvidia, Broadcom, and Intel to tech giants Microsoft, Meta, Amazon, and Alphabet, according to CNBC. Investors will be watching for Micron’s comments on memory prices, plans to expand production capacity, and long-term contracts with customers, the network predicts.

Paychex, Trip.com, and Jefferies Financial will also release their earnings reports on that day.

The U.S. Census Bureau will release data on new home sales for May. Economists expect the figure to rise from 622,000 the previous month to 658,000.

After the market closes, the Fed will release the results of its annual stress tests of the largest U.S. banks. The regulator is assessing whether these banks will be able to continue lending even in the event of a deep recession, explains The Motley Fool. In a hypothetical scenario analyzed by the Federal Reserve, unemployment rises to 10%, home prices fall by 30%, and commercial real estate values drop by 39%.

On Thursday, June 25, the U.S. Bureau of Economic Analysis will release the Personal Consumption Expenditures (PCE) index for May—a key inflation indicator that the Federal Reserve uses to guide its monetary policy decisions. Last week, the Fed kept interest rates unchanged, but its updated projections indicated a high probability of a rate hike later this year. At the same time, the de-escalation of the conflict between the U.S. and Iran led to a sharp drop in oil prices, easing one of the market’s main inflation concerns. In May, consumer price inflation (CPI) accelerated to 4.2%, reaching a three-year high, mainly due to rising energy prices amid the Iran crisis. Investors will use the PCE report to gauge whether price pressures outside the energy sector are persisting and to what extent expectations of a rate hike are justified, notes CNBC.

Also on Thursday, the report on durable goods orders for May will be released. The consensus forecast calls for a 0.8% increase compared to the previous month.

Darden Restaurants, a restaurant chain operator; McCormick, a manufacturer of spices and seasonings; and FedEx Freight Holdings will announce their quarterly results.

On Friday, June 26, the University of Michigan will release the final reading of the Consumer Sentiment Index for June. The consensus forecast calls for an increase in the index from 44.8 points in May to 48.9 points—in line with preliminary data. Despite some relief from lower gas prices, respondents continue to feel the pressure of inflation, according to Barron's.

This article was AI-translated and verified by a human editor