A Swiss Surprise, Micron’s Outlook, Flash PMI Data Ahead

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US equity futures point to a vibrant market open later this morning. Those futures are being lifted by the market seeing the Fed’s updated economic projections still calling for three rate cuts this year as well as Micron’s (MU) beat and raise earnings report last night. A potential deal to fund the US federal government likely helping give equity futures a boost as is the surprise rate cut by the Swiss National Bank earlier today.

The above points to the market rally continuing into this morning’s open. Whether it continues past that point could hinge on what the March Flash US PMI data reveals about the domestic economy and inflation pressures. While the Fed’s updated economic projections still pencil in three rate cuts this year, during his press conference yesterday, Fed Chair Powell indicated the Fed will need to see more data that confirms inflation is moving sustainably toward the Fed’s 2% target to begin that rate cutting cycle. That means if this morning’s Flash PMI data finds selling prices continued to trend higher in March or were little changed compared to the first two months of the year, we could see very recent upward revisions in June rate cut probabilities fade.

  • The Swiss National Bank surprised the market with a decision to lower its main policy rate by 0.25 percentage points to 1.5%, saying national inflation is likely to stay below 2% for the foreseeable future. Supporting the move, the bank now sees average inflation reaching 1.4% in 2024, down from its 1.9% estimate in December, and 1.2% for 2025, trimmed from the previous 1.6% estimate. 

  • Micron (MU) shares soared in aftermarket trading following the company’s beat and raise February quarter earnings report. The company delivered EPS of $0.42, significantly ahead of the -$0.25 consensus, on revenue that rocketed higher to $5.82 billion, up ~58% YoY. For the current quarter, Micron sees EPS in the range of $0.38-$0.52, also well ahead of the $0.09 consensus forecast. Revenue is expected to climb sequentially to $6.4-$6.8 billion, outstripping the $6.0 billion market forecast as the company benefits from the “multi-year opportunity enabled by AI."

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