Diamonds and Dogs

7/22/19

Chips continue to rebound. Micron (MU) is up 3% today, and up 40% in the last two months, thanks to an upgrade at Goldman Sachs with a $56 price target. Goldman said chip inventory levels at its customers are falling faster than expected, primarily in NAND flash. Micron's business mix is roughly 60% to 70% DRAM and about 30% NAND memories, according to Goldman. Goldman is also turning positive on the semiconductor capital equipment group.

Retailers continue their slide. Victoria Secrets, L Brands (LB) and Nordstrom (JWN) are both down over 2% not far from 52-week lows. Nordstrom is down over 50% from its highs set last fall. Both stocks have received downgrades in the last month as the companies continue to struggle with more business moving online. Both, however, do sport great dividend yields of over 4% which hopefully will support the stock until management can figure out a strategy to turn the fundamentals around.