Watch a major transport stock
Jay Woods, chief market strategist at Freedom Capital Markets, is keeping an eye on a transportion player that has staged a comeback in the lead up to its earnings report this week: FedEx . “The transports have been on fire lately,” Woods said. FedEx, the second-highest-weighted stock in the transports index, has rallied 30% over the past three months, and is down less than 1% year to date. But its rebound, may help other transportation stocks move higher, according to Woods. “If FedEx goes, watch the transports make another leg higher,” he said. The strategist pinpointed $285-$290 as the key technical level to watch. FedEx closed Friday at $282.89, but shares were trading down less than 1% on Monday. Here are some other earnings reports and data releases Woods is watching this week: Micron Technology is reporting its earnings on Wednesday — an event that could dent its shares, even if the semiconductor company tops Wall Street’s expectations, according to Woods. He cited pullbacks in other AI stocks Nvidia and Broadcom following their better-than-expected earnings reports as models of what could transpire. “For them to continue to run higher, it’s going to take a beat and guide [of] epic proportion, given the pattern we’re seeing in these stocks,” Woods said. Micron is trading about 75% above its 200-day moving average, making it a little overextended, he said. General Mills will post its results on Wednesday. “It’s trading around $46 as we enter. If there’s negative news, that’s a 10-year support level going back in time. That’s how bad it’s been for General Mills,” Woods said. He expects there were be pressure on the stock. However, with a 5.2% dividend yield, the risk-reward setup is “good for a long-term, patient investor.” The Bureau of Labor Statistics will release Tuesday the unemployment report for November and part of October. Experts are looking for an unemployment rate of 4.4%- 4.5%, Woods said. “Anything above that could cause some red flags,” he said. The agency will also release its consumer price index report on Thursday. Woods is looking for year-over-year inflation to come in at 3.1% — a level “that will get markets moving,” according to the strategist. (See the video above for the full analysis from Woods.)
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