Investor focus Wednesday will continue to surround the COVID-19 pandemic. Markets rallied Tuesday on hopes for a massive $2 trillion fiscal stimulus package. The Dow (^DJI) soared 2,112 points for its best day since 1933. Meanwhile, the S&P 500 (^GSPC) spiked 9.38% and the Nasdaq (^IXIC) surged 8.12%.
Durable goods orders
Though the February preliminary durable goods orders data is unlikely to capture the impact of COVID-19, the transportation component will be in focus. Transportation equipment orders are expected to have plunged dramatically during the month due to Boeing (BA).
“Durable goods orders appear set to plummet in coming months, as uncertainty paralyzes capital investment and supply disruptions hit manufacturers,” Wells Fargo said in a note March 20.
Analyst anticipate durable goods orders tumbled 1% from last month, and durable goods excluding transportation will likely decline 0.4%.
Micron earnings
On the earnings calendar for Wednesday, chipmaker Micron (MU) is scheduled to report results after the market close. Analysts polled by Bloomberg expect the company to report adjusted earnings of 36 cents per share on $4.69 billion in revenue during its fiscal second quarter.
Susquehanna analyst Mehdi Hosseini predicts that Micron’s supply-chain disruption in China will be offset by stronger average selling prices (ASPs). “We think the most critical catalyst for the stock isn't the upcoming February-quarter report, but rather determining the extent of demand destruction which we don't expect to be known until May,” Hosseini wrote in a note March 23. “Micron's exposure to China (Huawei + Kingston ~20-25%), along with lean inventories among all memory manufacturers, are two factors that could actually provide a cushion as China recovers from the coronavirus, all while EU and North America have yet to see a peaking in new cases.”
Micron shares have been under pressure along with the broader market this year. The stock fell more than 19% so far this year but has outperformed the S&P 500’s 24% decline during the same time period. The options market is currently implying a 17.9% move in either direction for Micron’s stock following the earnings announcement.
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Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.
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