June 19, 2024

NORDchinaz

The Business & Finance guru

Jim Cramer’s top 10 things to watch in the stock market Wednesday

My top 10 things to watch Wednesday, Aug. 2

1. Debt rating agency Fitch downgrade of U.S. long-term foreign currency issuer default rating to AA+ from AAA makes as little sense as the Standard & Poor’s downgrade back in August 2011 over the same concerns of an incapable government. In the summer of 2011, S&P fell sharply only to recover into year-end and into the next year. So, it actually started the next leg of the then-bull market. The Fitch move late Tuesday put pressure on the recently rallying Dow, the S&P 500 and the Nasdaq at the open.

2. New evidence the private-sector job market remains hot. U.S. companies hired 324,000 positions in July. Roughly double what economists had been expecting. It was a decrease from the downwardly revised 455,000 number in June. The government’s July employment report is out Friday. ADP has been a mixed predictor of nonfarm payrolls.

3. Club name Advanced Micro Devices (AMD) is truly spectacular. Better-than-expected quarterly results. A light guide that Wall Street is looking past because of the expected fourth-quarter rollout of new artificial intelligence chips. AMD’s numbers indicate a trough in the personal computer inventory glut. Shares would be much higher if it were not for Fitch. AMD has a tough rival in fellow Club holding Nvidia (NVDA).

4. If it had made another $24 million in the U.S., Starbucks (SBUX) would have done 8% same-store sales growth in its fiscal third quarter. This Club stock would be up Wednesday, not down. Not back yet to 2019, which disturbs analysts. Fractious call from people looking for better than 7% North American comps given all the good things that should be happening. China’s numbers really good. I see no trade-down. There’s increased loyalty, better productivity at SBUX. But missing out on the hyper-caffeinated drinks offered at rivals like the smaller Dutch Bros (BROS).

5. Emerson Electric (EMR): Net sales up 14% in fiscal Q3 leads to better-than-expected revenue of $3.95 billion. Adjusted earnings-per-share of $1.29 also beats. Strong free cash flow. Benefits from energy transition, EV battery, hybrid, life sciences. Lithium and copper mining. Full-year EPS guidance boost. The Club stock get a nice pop of nearly 5% early Wednesday.

6. Humana (HUM) shares coming to life Wednesday; up more than 5% early after big beats on second-quarter adjusted EPS of $8.94 and revenue of $25.73 billion. Reaffirms full-year EPS of at least $28.25. Conservative but good. Humana sees “strong growth” of individual Medicare Advantage business: an 18% growth rate.

7. DuPont (DD) delivers quarterly beat but guides lower. Bullpen name. Channel inventory destocking in telecommunications. But it did beat the number. CEO Ed Breen doing some interesting things and I think this might be the last bad quarter. In our July 22 commentary when we added to Bullpen, we pointed out the Club has profitably traded this specialty chemical maker in the past.

8. Beauty company elf (ELF) continues to crush it. The stock is surging. This one is the low-cost Estee Lauder (EL). When I look at it all, I can see the decline but not the fall of Club name Estee Laude, which, along with DIS, BHC, DHR and FL remain bedeviled holdings in our portfolio.

9. KeyBanc takes Palo Alto Networks (PANW) price target to $300 per share from $285. Keeps overweight (buy) rating. This is a best-in-show Club name that is one of the most reliable that we have.

10. Apple (AAPL): JPMorgan raises price target to $235 per share from $190. Keeps overweight. Analysts re-rating resiliency of the numbers, “earnings compounder,” not product cycle company. Services related.

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