FedEx sues US over its ban of some exports to China, will report earnings after the close: Morning Brief
Tuesday, June 25, 2019
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WHAT TO WATCH
After the bell, industrial heavyweight FedEx (FDX) and chipmaker Micron (MU) will release quarterly results.
FedEx is often looked to by investors as a reliable bellwether for global economic activity. In December 2018, FedEx issued weak guidance and warned investors that the company was seeing continued deceleration internationally. The industrial giant cut its guidance again in March. Investors and analysts will likely be paying close attention to what management says on the earnings call in regards to heightened trade tensions and how those issues are impacting FedEx’s business.
On Monday, FedEx sued the U.S. government, stating that it shouldn’t be held liable for shipped products that violated a Trump administration ban on exports to some Chinese companies. The suit followed reports that Huawei was re-examoning its relationship with FedEx after diverted shipments.
Analysts polled by Bloomberg expect FedEx to report adjusted earnings of $4.83 per share on $17.8 billion in revenue.
Meanwhile, Micron’s report comes on the heels of rival Broadcom’s (AVGO) announcement earlier this month warning investors that the U.S. ban on Chinese tech giant Huawei and the ongoing trade war will likely cut into its revenue by $2 billion. Analysts are predicting that demand weakness surrounding dynamic random-access memory (DRAM) chips and NAND memory chips will likely weigh on Micron. Micron is expected to report adjusted earnings of 78 cents per share on $4.68 billion in revenue, according to data compiled by Bloomberg.
TOP NEWS
Gold and bitcoin jump on Iran sanctions: The price of gold and bitcoin was jumping on Tuesday morning as the U.S. hit Iran with fresh sanctions. The Trump administrations on Monday signed an order levying sanctions on top Iranian military leaders and Supreme Leader Ali Khamenei’s office. The sanctions came in response to the downing of a U.S. drone by Iranian forces last week. [Yahoo Finance]
China's drone giant DJI hits back at U.S. security concerns: Another Chinese tech giant is now at the center of national security concerns raised by the U.S. Senate. DJI, a Chinese company that dominates the commercial drone market in the U.S., published an 1800-word letter on Monday striking back against mounting concerns on Capitol Hill over spying, following the recent ban on the Chinese telecom giant Huawei. [Yahoo Finance]
Sanders and Warren aren't the only candidates with plans for student loans: As Americans wrestle with over $1.5 trillion in student debt, the 2020 Democratic field has a variety of plans to confront the issue. On Monday, Sen. Bernie Sanders unveiled the most dramatic proposal yet: the government would pay off all loans held by 46 million Americans, covering private debt as well federal loans. The bill follows a slightly less ambitious plan from Sen. Elizabeth Warren that she estimates would eliminate 95% of the student debt held by Americans. Sanders and Warren say they are "cancelling" these debts. The rest of the field often uses a less-sexy word when discussing their plans: refinancing. [Yahoo Finance]
Also: Bernie Sanders unveils sweeping student debt cancellation plan
SpaceX launches Falcon Heavy rocket with 24 satellites: SpaceX launched its Falcon Heavy rocket on Tuesday from Kennedy Space Center in Florida, carrying 24 experimental satellites in what Elon Musk's rocket company called one of the most difficult launches it has attempted. The craft blasted off to cheers from onlookers at 2:30 a.m. ET after a three-hour delay from the original launch time late Monday. [Reuters]
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