Here are 3 big things to watch in the stock market this coming week
Club name FedEx will soon enter the earnings space after the trade holiday-shortened week brought positive news on the Iran war and oil prices. Also on our radar in the week ahead is the inflation data for May – although warnings are needed, as we will explain later – and the profit from the memory chipmaker Micron, one of the most important companies in the artificial intelligence trade. 1. FedEx earnings: On Tuesday evening, FedEx reports financial results for the fourth quarter of 2026, which covers the March-to-May period. It will be a complicated print for several reasons. First, the reported results will include both FedEx and the newly spun-off FedEx Freight, which began trading independently on June 1. As is often the case with spin-offs, FedEx will begin reporting restated earnings that reflect the company’s current makeup — a logistics solutions and parcel delivery firm. To complicate matters, FedEx is also switching to a traditional fiscal year that ends in December, abandoning its current June through May calendar. The change, announced in January 2025, will bring FedEx into line with rival UPS and other transportation industry players. While it’s a logical decision, the combination of the calendar switch and the turnaround will make it difficult to compare FedEx’s guidance against Wall Street estimates. FedEx may offer an outlook for both the June to September period — four months, not the usual three per quarter — and the seven-month window from June to December. Moreover, the management team, led by CEO Raj Subramaniam, is known to be conservative. Do you have all that? The bottom line is that there are a ton of moving parts surrounding FedEx’s earnings on Tuesday night, so the market may need some time to digest it all. The first move of the stock may not be the right move. For us, we will focus on the reported numbers – especially the profitability metrics – as they will be easier to interpret than the guidance (at least initially). Another focus of the conference call commentary from Subramaniam was where the planned FedEx is headed. Any update on resuming stock purchases would be noteworthy, too. The core of our view is that FedEx’s self-service initiatives to improve the delivery network and prioritize more profitable deliveries, such as specialty health care packages, will lead to better revenue and free revenue growth. Deutsche Bank analysts summed it up well in a June 11 note to clients. “While we acknowledge that the task of generating earnings on the calendar while at the same time fixing a large portion of assets is undoubtedly daunting, we do not think this should prevent us from recognizing that the core business challenges remain the same/are accelerating,” the analysts wrote. FedEx is expected to report revenue of $24.04 billion and earnings per share of $5.96, according to LSEG. Now, we’re moving to FedEx Freight, which is the largest less-than-truckload (LTL) provider in North America. LTL services include shipments from multiple customers on a single trailer – think of these shipments as too large to be delivered by standard packages (say, over 150 pounds or a few pallets of product) but not large enough for the customer to need an entire truckload. We’ll hear from FedEx Freight executives, led by CEO John Smith, at an investor day Thursday night. The fourth quarter numbers are due out due to the parent company’s report on Tuesday night. So come Thursday, we’ll get some color on the Q4 results and hopefully an update on what to expect for the rest of the year. At its April investor day, FedEx Freight forecast moderate top-line growth in the June-to-December transition period and consequent pressure on adjusted operating margins due to spin-off-related costs such as technology investments. In our excitement about what FedEx Freight can do now that it is operating as an independent firm, we added to our position on Wednesday. FedEx Freight’s consensus is $2.26 billion in sales and EPS of $1.53, according to LSEG. 2. Inflation update: The Fed’s preferred inflation gauge — a price index of personal expenses — will be out Thursday morning. The release comes after Kevin Warsh sounded more critical of monetary policy than some investors and Fed watchers might have expected during his first press conference as Fed Chairman last week. The PCE price index generally does not attract as much attention as the consumer price index. Although they are similar, the Fed uses the PCE index in its 2% inflation target because it is “designed to allow Americans to spend their money over time and adapt more quickly to changes in spending,” according to its website. This week’s PCE data is for May. In early June, May’s CPI hit a three-year high of 4.2%, with the main driver being the Iran war-related increase in energy prices. Accordingly, we need to take the May PCE with a grain of salt, given the optimism about the end of the conflict in the Middle East and the reopening of the Strait of Hormuz, which caused oil prices to reverse last week. WTI crude for the US oil standard settled at around $76 a barrel on Thursday, a sharp decline from the high $90s and low $100s seen throughout May. At the close of the session on Thursday, WTI reached a level not seen since March 4, a few days after the start of the Iran war. If these prices hold, and they are likely to fall even further, this should provide significant relief to inflation in the coming months – and that could mean the current forecast for a possible Fed rate hike later this year will prove to be unwarranted. Sure, PCE data may help us understand price pressures in other areas of the economy (say, housing or health care services), but oil has been driving the inflation bus for the past few months. Right now, the bus is on its way to a friendlier place than it was a few weeks ago. The key to keeping it this way is progress towards a solid settlement in the Middle East. Over the weekend, Iran said it had closed the Strait of Hormuz because, in part, it would continue Israeli military operations in Lebanon. The US denied those claims, as Vice President JD Vance was in Switzerland for peace talks. 3. Micron’s benefits: The Idaho-based company is facing the brunt of rising prices for memory chips used in data center servers. That explains why shares are up more than 800% in the past 12 months and nearly 300% in 2026 alone. Although we do not own Micron’s stock, its results and analysis, except for Wednesday, have implications for all chip makers – Nvidia, Broadcom, and Intel – and companies that spend billions of dollars building data centers; for us, that’s Microsoft, Meta Platforms, Amazon, and Alphabet. When Meta raised its full-year guidance for capital expenditures in April by 8% to $135 billion, CEO Mark Zuckerberg said the increase was primarily due to higher prices, especially memory. Microsoft also said its calendar 2026 capex guidance of $190 billion includes a $25 billion impact from higher pricing. Micron is one of three companies that make a type of memory chips used in AI servers known as high-bandwidth memory (HBM); South Korea’s SK Hynix and Samsung are the other two. In other words, the extra money that our companies spend to cover the higher costs of memory ultimately anchors these three companies. The demand for HBM far exceeds the available supply, as manufacturers are giving more of their power to this AI memory and far from the simple types used in consumer electronics (smartphone manufacturers and PC manufacturers such as Apple in the process). Our focus with Micron will be on the company’s pricing, periodic updates on new production capacity, and whether it has entered into additional multi-year supply agreements with customers. In March, Macron said he had signed his first five-year supply agreement, although the details were sketchy. These long-term contracts are becoming more common in the memory and storage industry, which has historically been prone to boom-and-bust cycles. Chip makers are looking to add visibility and predictability to their businesses, while customers are doing everything they can to ensure they have enough supply, even if they have to pay to protect it. Analysts expect Micron to report earnings per share of $20.47 on revenue of $35.42 billion. Week ahead Monday, June 22 No earnings reports of note Tuesday, June 23 IS&P Global PMI Manufacturing and Services (first) at 9:45 am ET Before the bell: Carnival Corp., Sunbelt Rentals (SUNB) After the bell: FedEx (FDX), Worthington Industries home sales Wednesday, Home Wednesday Industrials, 1 KB, New Home Wednesday (1KB) New Home am ET Before the bell: Paychex (PAYX) After the bell: Micron (MU), Trip.com (TCOM), MillerKnoll (MLKN), Worthington Steel (WS) Thursday, June 25 PCE price index at 8:30 am ET Before the bell: Commercial Metals Co (CMC), Acuity Brands (McCTX), (Acuity MKSNck), Acuity Brands (Darneno) and Commercial Metals (CMC). Restaurants (DRI), Winnebago (WGO) After the bell: FedEx Freight (FDXF) Friday, June 26 Complete lists at 8:30 am ET University of Michigan consumer sentiment (final) at 10 am ET No detailed financial reports (See here for a full list of stocks in Jim Cramer’s Investing the Charitable Club BC). Cramer, you will receive a trade warning before Jim executes the trade. Jim waits 45 minutes after sending a trade alert before buying or selling stock in his charity portfolio. When Jim talks about a stock on CNBC TV, he waits 72 hours after issuing a trade warning before making a trade. THE PRIVATE INFORMATION OF THE BURNING CLUB IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, AND OUR PRIVACY POLICY. NO LEGAL LIABILITY OR OBLIGATION EXISTS, OR IS CREATED, BY YOUR ACCEPTANCE OF ANY INFORMATION PROVIDED BY CONTACTING THE INVESTMENT CLUB. NO PARTICULAR RESULT OR INTEREST IS GUARANTEED.
