How Micron's Earnings Flipped the Script on the Markets

After a pretty brutal week on the indices, we saw a real turnaround overnight. Frankly, the mood was quite gloomy, especially on the Nasdaq. And then, one company changed everything: Micron. I'm going to break down for you how their outstanding results sparked euphoria, caused oil prices to drop, and what to watch for today. We'll also talk about a little story about a forgotten chip that has now become one of the most important in the world.

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The Micron Effect: The Awakening of AI and the Markets

So, who is Micron? It's an American memory giant, the famous chips we have in our computers. Last night, they reported a record quarter, and their stock soared by over 12% after the close. To give you an idea, we were at the session's low on the US indices, and less than an hour from the end, boom! The numbers dropped, and everything took off.

Micron's numbers are spectacular:

• Revenue: $41.5 billion, three times more than last year. That's colossal.
• Forecast: This is what really set everything off. They're targeting $51 billion for the next quarter, while analysts were expecting something between $40 and $43 billion. A 20% gap is extremely rare.

Basically, they're telling analysts: "You're completely off the mark, we're going to make way more money than that." And naturally, this caused widespread euphoria. Asia exploded, with the Korean index, the Kospi, rising by over 5%. It's a very tech-oriented index, much like the Nasdaq, so this reaction makes sense.

Oil Collapse and Gold's Drop

The other big move was in oil. The price per barrel completely collapsed, falling below $70 for US WTI. That's a lower level than before the tensions in the Strait of Hormuz.

Why such a drop? It actually comes largely from the United Arab Emirates leaving OPEC. To put it simply, OPEC is a club of countries that agree to limit their oil production to keep prices high. By slamming the door, the UAE announced they would do whatever they want, basically doubling their production. More supply on the market with unchanged demand means prices fall. That's good news for the consumer.

Meanwhile, gold also cracked. It even hit its annual low this week. When fear recedes in the markets, safe-haven assets like gold lose their appeal.

My Take on the Indices and What's Next

Let's take a quick look at the indices:

• The CAC 40 is a bit stuck in its range, not much is happening.
• The DAX, on the other hand, bounced off a level I often watch, the 750 mark (here 24,750), after a bearish phase. It's a habit I've developed after thousands of hours in front of the charts.
• The Dow Jones remains very solid, at its peak.
• The Nasdaq is the most interesting. Yesterday, it hit a low on the "monthly S1 middle," stagnated for a few minutes (an eternity for a scalper), and then Micron's results sent it shooting up 2.5% in a straight line.

Personally, I'd like to see it return to the previous week's low for a potential bounce. But, without getting my hopes up, the most likely scenario is that we'll target higher levels if the enthusiasm holds.

The Short Story of Micron: Revenge of the Stubborn

For a little anecdote, let's talk about memory. In the 80s, memory chips were worthless, especially with massive Japanese production causing prices to plummet. They were so worthless that in 1985, Intel completely abandoned this business to survive. They left it to others.

But a small company, born in 1978 in Idaho, the heart of rural America, held on. That company was Micron. It was all they knew how to do, and they stubbornly persisted. 40 years later, this survivor of the price carnage is worth a fortune, and artificial intelligence has crowned it king. It just goes to show that sometimes, sticking with a sector everyone else has abandoned can eventually pay off. Who would have bet on them in 1985?

Conclusion

So, today is all about the euphoria sparked by Micron. The return of risk appetite is palpable. However, we shouldn't get carried away too quickly. A major event awaits us at 2:30 PM: the release of the PCE inflation index in the United States, the Fed's favorite indicator. If inflation is under control, the party could continue. If not, the joy might be short-lived.

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