Market review from UTEX — week 51

Major U.S. indices declined: SPY -0.57%, Nasdaq -1.9%.

Earnings from Oracle (-12%) and Broadcom (-7%) reignited concerns about the return on investment in AI infrastructure. Analysts are once again talking about overvaluation in the sector and the lack of clear timelines for payback on massive AI spending. Netflix (-5%) continues to slide amid the deal with WBD.

Bitcoin has been consolidating for a second week near the $90,000 level. Ethereum is trading around $3,100.

On December 10, the Fed cut rates by 25 basis points. Jerome Powell said the policy rate is now close to neutral levels, while inflation risks are skewed to the upside. The Federal Reserve has time to observe how the economy evolves before taking further steps. The probability of another rate cut at the next meeting on January 28 is currently estimated at 24%.

On Thursday, the Consumer Price Index (CPI) for November will be released, helping assess the impact of tariffs on inflation. The Fed is closely watching price pressures ahead of 2026.

This week, chipmaker Micron Technology will report earnings, giving investors another opportunity to gauge the state of the AI sector. Other notable upcoming reports include Nike, Jabil, Paychex, FedEx, CarMax, General Mills, and Carnival. 

Top ideas for trading this week

🟡 Cintas (CTAS). Earnings on December 18 before the open. A supplier of corporate uniforms and services for maintaining cleanliness and safety in offices and facilities. The stock rose almost uninterrupted for many years, but over the past year it has formed a $180–$230 range. The price is now closer to support; a mid-term position could be considered in anticipation of a new leg higher if the $180 level holds.

🔴 Micron Technology (MU). Earnings on December 17 after the close. A manufacturer of DRAM (system memory) and NAND (flash memory) chips used in SSDs. The stock is up 145% over the past year, so elevated intraday volatility is expected. A large gap is very likely.

🟡 General Mills (GIS). Earnings on December 17 before the open. A major global producer of packaged food. Down 30% over the year, the stock remains in a clear downtrend but is now near its 2020 support level, around $46. Not the most obvious mid-term candidate. It may make sense to wait a few days for investors to digest the report; if the stock does not break lower, it could offer a decent entry point.

🟡 CarMax (KMX). Earnings on December 18 before the open. The largest used-car retailer in the U.S. The stock is down 52% year over year but has bounced nearly 20% from recent lows over the past month. If the report does not disappoint, there is room for further upside. On the daily chart, it looks like most possible stops were cleared during the latest sell-off.

🟡 Nike (NKE). Earnings on December 18 after the close. Valuation looks reasonable for a mid-term position: the stock is still not far from the April lows, from which the first rebound took it from $55 to $80. Support is around $60. If there are no major surprises, this is a buy-and-forget type of setup.

Choose what suits you best:

🔴 high risk, for the pros;

🟡 medium risk, for traders with little experience.

Profitable deals!

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