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

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

Post By Oil and Gas Alphabet Inc, Apple Inc, BP PLC, Breaking News: Markets, Breaking News: Technology, business news, Caterpillar Inc, GE HealthCare Technologies Inc, Investment strategy, Jim Cramer, L3harris Technologies Inc, Logitech International SA, Lyft Inc, Markets, Oil and Gas, Roku Inc, S&P 500 Index, Technology, U.S. 10 Year Treasury, Ulta Beauty Inc, VF Corp, WTI Crude (Mar'23)

My top 10 things to watch Tuesday, Oct. 31 1. U.S. stocks edge up in premarket trading Tuesday, with S & P 500 futures rising 0.15%. The move comes after equities rallied Monday, with the S & P rising to its highest level in two months. Meanwhile, the yield on the 10-year Treasury was hovering around 4.8%. Oil prices are up around 0.6%, with West Texas Intermediate crude trading at $82.80 a barrel. Broadly, we’re seeing end-of-the-month shenanigans in a still oversold market. 2. Club holding Caterpillar (CAT) delivers a third-quarter earnings beat Tuesday, even as the stock tumbles roughly 4% on lackluster guidance. Nothing matters except the operating margin going lower in the fourth quarter. 3. Club name GE HealthCare Technologies (GEHC) outpaces earnings estimates Tuesday, bolstered by a recovery in demand for surgical procedures. The company also raises the low end of its full-year guidance. The stock is having a muted reaction, with shares up slightly, at around $63 apiece. 4. A Wall Street Journal analysis Tuesday argues Club holding Apple (AAPL) will face continued headwinds from China, while its “lucrative” relationship with Club name Alphabet (GOOGL) could also be at risk. It’s a classic negative piece on the company that crystalizes the ‘hate Apple trade’ that’s been going on. 5. MoffettNathanson downgrades Lyft ( LYFT) to sell from neutral, while lowering its price target on the stock to $7 a share, down from $10. The firm expects margin compression at the rideshare company, and any long-term guidance to “likely disappoint.” Lyft is set to report third-quarter results on Nov. 8. 6. Baird upgrades one of our favorite technology defense players, L3Harris Technologies (LHX), to outperform from neutral, citing increased funding for defense globally. The firm also raises its price target on the stock to $216 a share, up from $198. 7. Oil giant BP PLC (BP) reports a sharp drop in profits year-over-year for the third quarter, sending shares roughly 4% lower in early trading Tuesday. Must they do a deal , too? There are only so many choices. 8. MoffettNathanson upgrades Roku Inc. (ROKU) to neutral from sell, citing the streaming-device maker’s focus on profitability and free cash flow. In short, the company got its act together and is becoming more dominant. 9. Shares of VF Corporation (VFC), the maker of Vans sneakers, are down nearly 9% in premarket trading after the company withdrew its full-year revenue and profit forecasts Monday. There are so many things wrong, but I think that CEO Bracken Darrell can pull it off. He turned around Logitech International (LOGI) and tripled the S & P over the decade in which he was in the top job. 10. DA Davidson adds Ulta Beauty (ULTA) to its “Best-of-Breed Bison” list. The firm reiterates a buy rating on the stock and a $495-a-share price target. Sign up for my Top 10 Morning Thoughts on the Market email newsletter for free . (See here for a full list of the stocks at Jim Cramer’s Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

My top 10 things to watch Tuesday, Oct. 31

1. U.S. stocks edge up in premarket trading Tuesday, with S&P 500 futures rising 0.15%. The move comes after equities rallied Monday, with the S&P rising to its highest level in two months. Meanwhile, the yield on the 10-year Treasury was hovering around 4.8%. Oil prices are up around 0.6%, with West Texas Intermediate crude trading at $82.80 a barrel. Broadly, we’re seeing end-of-the-month shenanigans in a still oversold market.

2. Club holding Caterpillar (CAT) delivers a third-quarter earnings beat Tuesday, even as the stock tumbles roughly 4% on lackluster guidance. Nothing matters except the operating margin going lower in the fourth quarter.

3. Club name GE HealthCare Technologies (GEHC) outpaces earnings estimates Tuesday, bolstered by a recovery in demand for surgical procedures. The company also raises the low end of its full-year guidance. The stock is having a muted reaction, with shares up slightly, at around $63 apiece.

4. A Wall Street Journal analysis Tuesday argues Club holding Apple (AAPL) will face continued headwinds from China, while its “lucrative” relationship with Club name Alphabet (GOOGL) could also be at risk. It’s a classic negative piece on the company that crystalizes the ‘hate Apple trade’ that’s been going on.

5. MoffettNathanson downgrades Lyft (LYFT) to sell from neutral, while lowering its price target on the stock to $7 a share, down from $10. The firm expects margin compression at the rideshare company, and any long-term guidance to “likely disappoint.” Lyft is set to report third-quarter results on Nov. 8.

6. Baird upgrades one of our favorite technology defense players, L3Harris Technologies (LHX), to outperform from neutral, citing increased funding for defense globally. The firm also raises its price target on the stock to $216 a share, up from $198.

7. Oil giant BP PLC (BP) reports a sharp drop in profits year-over-year for the third quarter, sending shares roughly 4% lower in early trading Tuesday. Must they do a deal, too? There are only so many choices.

8. MoffettNathanson upgrades Roku Inc. (ROKU) to neutral from sell, citing the streaming-device maker’s focus on profitability and free cash flow. In short, the company got its act together and is becoming more dominant.

9. Shares of VF Corporation (VFC), the maker of Vans sneakers, are down nearly 9% in premarket trading after the company withdrew its full-year revenue and profit forecasts Monday. There are so many things wrong, but I think that CEO Bracken Darrell can pull it off. He turned around Logitech International (LOGI) and tripled the S&P over the decade in which he was in the top job.

10. DA Davidson adds Ulta Beauty (ULTA) to its “Best-of-Breed Bison” list. The firm reiterates a buy rating on the stock and a $495-a-share price target.

Sign up for my Top 10 Morning Thoughts on the Market email newsletter for free.

(See here for a full list of the stocks at Jim Cramer’s Charitable Trust.)

As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade.

THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, TOGETHER WITH OUR DISCLAIMER. NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

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What tie-ups in the U.S. oil patch could mean for players like Coterra Energy

Post By Oil and Gas BP PLC, Breaking News: Markets, business news, Chevron Corp, Conocophillips, Coterra Energy Inc, Devon Energy Corp, Diamondback Energy Inc, Energy, Exxon Mobil Corp, Investment strategy, Jim Cramer, Marathon Oil Corp, Markets, Oil and Gas, Pioneer Natural Resources Co, stock takes

Exxon Mobil ‘s (XOM) planned deal to buy Pioneer Natural Resources (PXD) has sparked talk of more consolidation in the oil-and-gas industry. While we don’t own companies as mergers-and-acquisition plays, the potential for more tie-ups could have significant implications for our remaining oil name: Coterra Energy (CTRA). It’s unclear which shoe will drop next now that Pioneer — the largest independent producer in the Permian Basin, a key U.S. oil field in West Texas and New Mexico — is effectively off the market in an all-stock deal valuing the company at roughly $60 billion . But analysts expect the acquisition by Exxon, the most valuable U.S. oil-and-gas company at nearly $450 billion in market capitalization, to have ripple effects on producers of all sizes. “Consolidation is critical for the sector. It’s healthy. It’s needed, and I think you’ll see more of it,” said Gabriele Sorbara, an analyst at Siebert Williams Shank & Co. The consolidation could take multiple shapes, as companies seek scale and bolster the amount of quality land they own to drill on in the future. On the one hand, investors are looking at bigger U.S. players such as Chevron (CVX) and ConocoPhillips (COP), wondering whether they’ll follow Exxon’s lead and acquire smaller exploration-and-production (E & P) firms. Chevron’s market cap is around $324 billion, while ConocoPhillips is worth roughly $152 billion, based on Thursday’s stock prices. Another possibility could be that E & P companies further down the valuation ladder choose to pursue deals that make their own inventory positions more attractive to investors, according to Nitin Kumar, senior analyst at Mizuho Securities. Companies in this basket could include Coterra, Devon Energy (DVN) and Diamondback Energy (FANG). Coterra is valued at roughly $22.4 billion Thursday, while Devon and Diamondback are valued at $31.7 billion and $30.5 billion, respectively. “I’m not proposing there’s going to be a big wave of M & A, necessarily. But if scale is what matters, your options are limited,” Kumar said. He added: “You can choose to either go your own way…you can look at the small public guys and pick off a few assets there, or you could look at mergers of equals and say, ‘Hey look, let’s two of us get together and now we create a competitive position with 800,000, 900,000 acres into play.'” That would be roughly on par with Pioneer’s more-than-850,000 acres in the Permian Basin. “All those should be options that these guys should be thinking about strategically,” Kumar argued. Devon Energy is reportedly doing just that. In recent months, the Oklahoma City-based company has held preliminary talks with Marathon Oil (MRO) about a potential tie-up , Bloomberg reported after the close Wednesday , citing people familiar with the matter. Houston-based Marathon is valued at nearly $18 billion, as of Thursday. Devon has also eyed privately held CrownRock, which operates in the Permian, according to Bloomberg. In recent years, publicly traded E & P companies have adopted a more muted approach to production growth — bowing to investor pressure after spending heavily to pump more oil in the 2010s proved unkind to energy stocks as crude prices pulled back. Now, the priority is generating more sustainable cash flows that can be returned to investors through buyback programs and dividends. The shift has generally been positive for the stock prices of oil companies. Expense reduction is another way to satisfy investors, and is likely a major motivation behind any further consolidation that might occur in the sector, said Scotiabank analyst Paul Cheng. Smaller companies may not solve their inventory backlog problems by combining, Cheng said, “but that certainly could provide them additional room to reduce costs.” At the time the Exxon-Pioneer deal was announced, Jim Cramer’s Charitable Trust owned a position in Pioneer. We sold our entire stake Monday, and will consider redeploying some of the cash into Coterra on future pullbacks in its stock price. Our investment in Coterra has been rooted in its attractive fundamentals as an E & P play with sizable exposure to both oil and natural gas — not its viability as a takeover target, or even a buyer itself. Indeed, owning Coterra in the hopes that a larger company may swoop in and offer a big premium would not be a wise strategy. That’s because a substantial premium might never materialize — as we saw with Exxon’s valuation of Pioneer. The industry’s newfound restraint on production makes it harder to justify paying up for a company, analysts say, compared with the premiums paid in the early days of the U.S. shale boom a decade ago. “If you go back to 2014, 2016, in those deals it was asset acquisition driven by growth. Today, it’s asset acquisition driven by not volume growth, but cash flow sustainability and longevity. It’s a little bit of a different motivator,” Mizuho’s Kumar said. (Jim Cramer’s Charitable Trust is long CTRA. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

Permian Basin rigs in 2020, when U.S. crude oil production dropped by 3 million a day as Wall Street pressure forced cuts.

Paul Ratje | Afp | Getty Images

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Interest rates take center stage with banks set to report quarterly results

Post By Business Banks, Breaking News: Markets, business news, Earnings, Investment strategy, Jim Cramer, KBW Bank Index, Markets, Morgan Stanley, stock takes, Wells Fargo & Co

Bank stocks remain under pressure due to high interest rates as financial firms like Club holdings Wells Fargo (WFC) and Morgan Stanley (MS) get ready to kick off earnings season. Like other big banks, Wells Fargo and Morgan Stanley have been caught in the throes of the central bank’s interest-rate-hiking campaign over the past 18 months. Both have been pulling back on lending to be more conservative with their capital as credit conditions have tightened — with a potentially negative impact on revenue streams and overall profits when the firms report earnings in the coming days. “Increasingly, I think that the only thing that can change things with either bank is the end of the tightening cycle so people will be less worried about credit woes,” Jim Cramer said Wednesday . As part of its effort to battle persistent inflation, the Fed has raised its benchmark interest rate 11 times since March 2022, with rates at their highest levels in 22 years . On top of operating in a high-interest-rate environment, financial firms are still rebounding from the collapse of a string of regional lenders, starting with the shuttering of Silicon Valley Bank (SVB) in March. Wells Fargo and Morgan Stanley are down on the year amid the difficult backdrop, falling 4.3% and 8.6%, respectively. The KBW Bank Index , a benchmark stock index of the banking sector, has lost more than 24% year-to-date. Still, both Club banks have solid fundamentals and diverse revenue streams that leave us bullish in the long term. Wells Fargo is set to report third-quarter results before the opening bell on Friday, while Morgan Stanley is slated to post results next Wednesday. WFC YTD mountain Wells Fargo (WFC) year-to-date performance For the three months ended Sept. 30, analysts expect Well Fargo to report revenue of $20.1 billion, compared with $19.5 billion during the same period a year prior, according to Refinitiv. Earnings-per-share should come in at $1.24, up 45% year-over-year, Refinitiv estimates showed. Wells Fargo’s cost-cutting measures and its forecast for its real estate loans will be front and center Friday. Out of the major U.S. banks, Wells Fargo has the largest exposure to the ailing commercial real estate market, an industry troubled by higher rates and near-record office vacancy levels. Offices represent roughly 22% of Wells Fargo’s outstanding commercial property loans and 3% of its whole loan book. In the bank’s July earnings report, CEO Charlie Scharf said Wells Fargo sustained “higher losses in commercial real estate, primarily in the office portfolio,” adding that while there have been “significant losses in our office portfolio-to-date, we are reserving [capital] for the weakness that we expect to play out in that market over time.” Wells Fargo “remains focused on making the company more efficient and has been reducing headcount” since the third quarter of 2020, Barclays analysts wrote in a recent note. In September, Chief Financial Officer Mike Santomassimo said the bank could slash headcount further, on top of nearly 40,000 layoffs over the past three years. Meanwhile, Wells Fargo slowed its pace of stock buybacks significantly over the past few quarters, even though the stock is at a lower price point and the bank remains well-capitalized. “My hope is that this Friday [Scharf] changes his mind when the company reports and it can sop up the excess stock,” Jim said. Scharf “has bought back 300 million shares, almost a tenth of the share count, since he took over in 2019,” Jim added. MS YTD mountain Morgan Stanley (MS) year-to-date performance For the three months ended Sept. 30, analysts expect Morgan Stanley to report revenue of $13.2 billion, up from $12.9 billion during the same period last year, according to Refinitiv. Earnings-per-share should fall 16% year-over-year, to $1.28. For the past several quarters, Morgan Stanley’s investment banking business – once crucial to its bottom line – has been lagging on macroeconomic uncertainty. Companies have pulled back on mergers and acquisitions amid growing concerns that a recession is on the horizon. Indeed, the value of global M & A plunged 44% in the first five months of 2023, according to data analytics firm GlobalData . During a recent conference, Morgan Stanley executives said that capital markets will likely improve in 2024, potentially setting up its investment banking division for a stronger year. The bank said its “more confident now than any time this year about an improved outlook for 2024.” Morgan Stanley has adapted to the struggling M & A and initial-public-offering markets by leaning more into wealth management, a strategy we think highlights the bank’s ability to deftly navigate a range of headwinds . “Morgan Stanley is doing everything it can to be less of a bank and more of a financial advisor,” Jim said Wednesday. And, with Chief Executive Office James Gorman expected to retire early next year, we’ll be looking for any further guidance from the company on its succession plans. (Jim Cramer’s Charitable Trust is long WFC, MS. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

A combination file photo shows Wells Fargo, Citibank, Morgan Stanley, JPMorgan Chase, Bank of America and Goldman Sachs.

Reuters

Bank stocks remain under pressure due to high interest rates as financial firms like Club holdings Wells Fargo (WFC) and Morgan Stanley (MS) get ready to kick off earnings season.

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Here are all the portfolio moves the Club made in this week’s oversold market

Post By Oil and Gas Advanced Micro Devices Inc, big picture, Breaking News: Markets, Breaking News: Technology, Broadcom Inc, business news, Constellation Brands Inc, Coterra Energy Inc, Dupont De Nemours Inc, Energy, Food and drink, Health care industry, Humana Inc, Investment strategy, Jim Cramer, Markets, Natural Gas (Mar'23), Oil and Gas, Oracle Corp, Starbucks Corp, Technology, VMware Inc

With the stock market deeply oversold this week, we put cash to work by picking stocks across a range of sectors including energy, technology and materials. We also added a former Club chipmaker to our Bullpen and upgraded a premium beer name to a buy rating. Finally, Friday’s market reversal helped us make good on a pledge to trim a once-downtrodden health-care stock. Here’s a day-by-day look at our portfolio moves in a choppy week of trading, undergirded by investor concerns over the state of the economy and rising bond yields. Monday Early into Monday’s session, we scooped up 200 shares of Coterra Energy (CTRA) – the first time in roughly two months that we added to our position in the oil-and-gas producer. With the market oversold, per the S & P 500 Short Range Oscillator , our investment discipline called for us to search for any dislocations within the portfolio. And Coterra fit the bill because its stock price did not appropriately reflect the recent rally in natural gas, one which has only gained steam throughout the week. On Friday, natural gas futures jumped 5%, to trade at roughly $3.33 per million British thermal units, or MMBtu. Tuesday The market entered Tuesday’s session at its most oversold since March, so we once again looked for places to strategically deploy some of our cash. That led us to coffee giant Starbucks (SBUX), which has been dogged by investor concerns over the health of its business in China. At the same time, we also added Advanced Micro Devices (AMD) to the Bullpen , our repository of stocks under consideration to join the portfolio. Later in Tuesday’s session, as market declines mounted, we nibbled on Broadcom (AVGO) stock. China’s slower-than-expected post-Covid economic recovery has been a thorn in the side of many U.S. stocks, including Starbucks. After closing at $114.46 per share on May 1, the stock began to drift lower for months, closing at its lowest level of the year Tuesday, at $89.48 per share. But the reason we stepped in to buy 50 shares Tuesday is because risks stemming from China – the coffee maker’s second-largest market, behind the U.S. – have mostly been factored into its stock price. We’re giving AMD a second look less than two months after exiting our position in the chipmaker — swapping in rival Broadcom in its place – because we’ve developed a better understanding of its role within the broader semiconductor space. To be sure, we haven’t taken further action on AMD stock, but in general we’re warming to it and closely watching the company’s standing in the artificial intelligence race. Tech stocks remained under pressure Tuesday afternoon, giving us an opportunity to buy 7 shares of Broadcom and lower our cost basis. The purchase also served to grow our position in Broadcom before its megadeal for data-center software maker VMWare (VMW) is completed. Management has said it expects to close the deal by Oct. 30. Thursday We sat on our hands Wednesday, as Wall Street rallied after payroll processing firm ADP reported private sector job gains in September well below expectations. But stocks returned to the red Thursday, and the market remained firmly in oversold territory. We made two separate buys against this backdrop, beginning with 65 shares of DuPont de Nemours (DD) and later returning to the beaten-down tech sector to purchase 75 more shares of Oracle (ORCL). And we upgraded beer maker Constellation Brands (STZ) to a 1 rating — denoting that we would be buyers at current levels — as its stock slid 3% despite releasing better-expected quarterly results and raising its full-year guidance. Thursday marked the first time since Aug. 18 that we added to our position in chemicals giant DuPont and just our third trade in the name overall. We initiated a position on Aug. 7 for its robust capital-return potential and its exposure to the semiconductor-and-electronics industry. Oracle’s stock remained trapped in its post-earnings malaise Thursday, amid a broader tech slump. But, as we argued in mid-September in the initial aftermath of the report, we remain confident in the ability of Oracle’s cloud business to benefit from growth in AI workloads. That belief undergirded our small purchase Thursday afternoon, just as it did Sept. 18 and Sept. 26 when we bought Oracle into weakness. Oracle still trades at an undemanding valuation relative to its tech peers. The strength of Constellation Brands’ beer business – led by Modelo and Corona – was on display in its fiscal 2024 second-quarter print Thursday. That didn’t stop its stock from declining for the past two trading sessions. But, as Jim stressed Friday, a major catalyst looms for Constellation: an investor day on Nov. 2, during which we hope to hear a strategy update influenced by activist investor Elliott Management. Friday A stronger-than-anticipated September jobs report from the U.S. Labor Department initially took stocks lower Friday, as bond yields popped on the news. However, the market reversed course in midday trading, with all three major U.S. stock benchmarks trading sharply higher. The strengthening market helped push shares of Humana (HUM) back above the $500 level – our cue to ring the register on 15 shares . We’d been eyeing the $500-per-share level for some time, as Humana’s stock began to recover from an 18% fall in early summer over fears about higher medical costs. Eventually, sentiment began to turn around, and Humana’s earnings report on Aug. 2 offered more assurances to investors that earnings would remain resilient. We remained aboard despite the turbulence and made one purchase into the June weakness. While the stock isn’t back to its May highs, it still made sense Friday to lock in hard-fought profits. We also downgraded the stock to a 2 rating, meaning we would wait for a pullback before buying up more shares. (Jim Cramer’s Charitable Trust is long CTRA, SBUX, AVGO, ORCL, DD, HUM and STZ . See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

People walk by the New York Stock Exchange (NYSE) on February 14, 2023 in New York City.

Spencer Platt | Getty Images News | Getty Images

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Oil and natural gas prices are on different paths. Here’s what has been driving the moves

Post By Oil and Gas Breaking News: Markets, business news, Coterra Energy Inc, Devon Energy Corp, Diamondback Energy Inc, Energy, Exxon Mobil Corp, ICE Brent Crude (Apr'23), Investment strategy, Jim Cramer, Markets, Natural Gas (Mar'23), Oil and Gas, Pioneer Natural Resources Co, S&P 500 Index, stock takes, United States, WTI Crude (Mar'23)

Oil and natural gas prices traveled divergent paths this week, resulting in a mixed picture for the Club stocks Coterra Energy (CTRA) and Pioneer Natural Resources (PXD). Fresh off robust third-quarter gains, crude has tumbled in recent days, sending the U.S. oil benchmark West Texas Intermediate and global oil standard Brent prices to their lowest levels since late August. Both WTI and Brent are on pace for their worst weeks since March on emergent concerns about demand for oil products. WTI dropped 2% on Thursday to settle at $82.31 a barrel. Brent also fell 2%, settling at $84.07 a barrel. On Friday, they bounced — coming off modest earlier declines after the government released much stronger-than-expected September job growth. WTI vs. nat gas this week @CL.1 @NG.1 mountain 2023-09-29 WTI and nat gas since Sept. 29 settle Meanwhile, the rally in natural gas has picked up steam, pushing the commodity to prices not seen since January, at over $3 per million British thermal units, or MMBtu. In Thursday’s session alone, natural gas prices jumped nearly 7%, as traders reacted to U.S. government data that showed a smaller-than-expected storage build. Traders also continue to monitor weather forecasts in search of clues about future demand heading into the winter months in the Northern Hemisphere. For the week, through Thursday’s settle, natural gas has climbed 8.1%, building on last week’s 11% advance. Natural gas on Friday morning jumped another 1.5%. In the oil market, a switch has seemingly been flipped. WTI and Brent rose more than 28% and 27%, respectively, in the third quarter, as major oil exporters Saudi Arabia and Russia cut production at a time when economic activity — and by extension demand for crude – proved more resilient than expected. Now, the market is grappling with the idea that demand might be waning. Those concerns were amplified by U.S. government data Wednesday that indicated gasoline inventories in the week ended Sept. 29 grew by 6.48 million barrels, a much higher increase than expected. WTI and Brent each plunged by 5.6% in Wednesday’s session. For the week, with one trading day to go, WTI and Brent sank more than 9% and nearly 12%, respectively. “The single biggest element of the global oil market is U.S. gasoline. We consume not far off 1 in 10 barrels just in U.S. cars,” veteran energy analyst Paul Sankey said Thursday on CNBC. “When it’s as weak as it came in [Wednesday] and it already been weak the week before, it becomes a major problem in the global oil market.” The magnitude of the sell-off, Sankey said, is linked to the traders who had been rushing into crude during its summertime ascent that continued into September , raising the specter of $100 per barrel oil . Brent traded as high as $97.69 a barrel on Sept. 28 while WTI reached $95.03 on the same day. Recent data has traders looking to reduce their risk, Sankey said. “The speculative interest before this run was very low,” he said. “Our view was that our shot at $100 was that speculators would pile in. The problem is … risk-off turned into [really} risk-off, and that became the speculators running for the exits again.” Some analysts see the oil swoon as temporary. In a note to clients Thursday, Goldman Sachs said the reasons for the declines — which in addition to gasoline demand concerns also include recession fears in 2024 and technical factors — “will prove to be transitory.” The firm said it still believes Brent crude can reach $100 a barrel by the spring. The recent decline in crude has hurt energy stocks including Pioneer and Coterra. Of the 11 sectors in the S & P 500 , energy has been by far the worst weekly performer through Thursday, falling nearly 6%. The broad S & P 500 index was down 0.7% over the past four sessions. Shares of Pioneer have retreated 6.4% over the same stretch, closing at $214.96 each Thursday. However, Pioneer’s weekly losses will be erased if the stock’s premarket surge of 10% holds. Friday’s spike higher came after The Wall Street Journal reported Exxon Mobil (XOM) was in advanced talks to acquire the Club holding. In April, the newspaper reported Exon held “informal” discussions on Pioneer. Pioneer vs. Coterra this week PXD CTRA mountain 2023-09-29 Pioneer vs. Coterra since Sept. 29 close Coterra held up better this week through Thursday, with the stock falling 3.5%, to $26.11 per share. The stock was little changed in Friday’s premarket. The relative outperformance in Coterra is likely tied to its significant natural gas exposure, compared with Pioneer and exploration-and-production (E & P) peers such as Diamondback Energy (FANG) and former Club holding Devon Energy (DVN). Coterra’s revenues are roughly a 50-50 split between oil and natural gas. On Monday, when we bought 200 more shares of Coterra, we argued its stock did not adequately reflect the appreciation in natural gas prices. Now, the stock has slipped a bit lower than where we bought while natural gas has climbed higher. (Jim Cramer’s Charitable Trust is long PXD and CTRA. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

Oil prices eased in Asian as concerns over slow demand from top crude importer China grew after bearish trade and inflation data, outweighing fears over tighter supply arising from output cuts by Saudi Arabia and Russia.

David Mcnew | Getty Images News | Getty Images

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What a stressed commercial real estate market means for these exposed bank stocks

Post By Business Arm Holdings PLC, Banks, Breaking News: Markets, business news, Instacart (Maplebear Inc), Investment strategy, Jim Cramer, JPMORGAN DRN, Klaviyo Inc, Markets, Morgan Stanley, real estate, Rivian Automotive Inc, stock takes, Wells Fargo & Co

Banks are facing mounting uncertainty as the commercial real estate (CRE) sector continues to struggle. But, tailwinds in our financial names should help safeguard their bottom lines. Club names Wells Fargo (WFC) and Morgan Stanley (MS) have bright spots in their operations that can offset potential weakness from CRE exposure. We’re optimistic about green shoots in Morgan Stanley’s dealmaking and the continued maturing of its wealth management business , along with progress in Wells Fargo’s multiyear recovery plans to expand its balance sheet and put past misdeeds behind it . Commercial real estate landscape Higher interest rates, tightening credit conditions and elevated office vacancies are weighing down the estimated $21 trillion commercial real estate sector . Many banks have exposure to CRE through loans. Fluctuations in property values and market conditions can impact their loan portfolios and asset quality. Economic downturns can lead to higher default rates and loan losses, affecting a bank’s profitability and overall financial health as well. Banks provide financing to investors and developers in the sector, making them vulnerable to weaker market cycles too. A lagging commercial real estate market can strain a bank’s capital reserves while a stronger market can boost incomes from lending and fees. Tomasz Piskorski, a property market expert and professor at Columbia Business School, said the key overhang on the banking sector is the central bank’s monetary tightening, and trouble in CRE is the “icing on the cake.” The Federal Reserve has hiked borrowing costs 11 times since March 2022 — from near-zero on the fed funds overnight bank lending rate to the target range of 5.25% to 5.5% — all in a bid to combat sticky inflation. The midpoint of the current range is the highest level in more than 22 years. “U.S. banks are now in a very difficult position and the main factor driving this difficult position is high interest rates,” Piskorski told CNBC in an interview. “This is one of the main problems affecting commercial real estate because a lot of these buildings were written at a lower rate and now they have to refinance to higher rates.” While there’s reason for concern in the broader commercial real estate market, we see the most pronounced challenges unfolding in offices. Work-from-home trends and tech layoffs have led to increased vacancies, decreased demand, and drastic reductions in property values. Office vacancy rates reached 18.6% in the first quarter of 2023. That’s 5.5% higher than when the Covid pandemic began to hit the U.S. during the first quarter of 2020. Back in July, Jim Cramer said the doom and gloom around CRE is a real threat but exaggerated, describing it at the time as a “well-overdone crisis” Morgan Stanley’s exposure MS YTD mountain Morgan Stanley (MS) year-to-date performance In reporting its second-quarter financial results, Morgan Stanley said that “increases in provisions for credit losses were primarily driven by credit deteriorations in the commercial real estate sector as well as modest growth across the portfolio.” The bank’s provision for credit losses rose to $161 million in Q2 from $101 million in the second quarter of 2022. Tailwinds spurred by a resurgence in Morgan Stanley’s investment banking (IB) services, however, could offset CRE market weakness going forward. There have been signals of more mergers and acquisitions (M & A) and initial public offerings (IPOs), which could boost this dormant, and crucial, part of the bank’s business. Semiconductor designer Arm Holdings (ARM) had a blockbuster listing earlier this month, the largest IPO since electric vehicle maker Rivian Automotive (RIVN) in 2021. Grocery delivery service Instacart (CART) and marketing automation Klaviyo (KVYO) made Klaviyo mad their debuts shortly after Arm. IB has lagged in recent quarters amid macro uncertainty and recession concerns. The global M & A value declined by 44% in the first five months of 2023, per data analytics firm GlobalData , with firms pulling back on dealmaking in order to preserve capital in the face of an economic downturn. During the Barclays conference earlier this month, management at Morgan Stanley said that capital markets are set to improve next year. This could boost IB broadly because companies will feel less conservative about how they allocate funds. “I would say we are more confident now than any time this year about an improved outlook for 2024,” the team said. “I think it’s clear to us now that the first half of the second quarter was probably the low point in sentiment around capital markets and M & A.” Still, there’s a lot of uncertainty around the U.S. economy as it’s unclear when the Fed will stop hiking interest rates. Academics like Piskorski, however, contend that pressure on traditional investment banking will likely continue. “We’re in a very different environment than two years ago. I would expect much fewer IPOs,” he said. “Cost of capital is much higher. Investor appetite to invest in companies, especially companies that are not profitable, is very different.” Wells Fargo’s exposure WFC YTD mountain Wells Fargo (WFC) year-to-date performance Offices represent around 22% of Wells Fargo’s outstanding commercial property loans and 3% of its entire loan book. It has one of the largest portfolios when it comes to CRE in the country, with more than $154 billion in loans outstanding and $33 billion of that consists of office loans. According to its latest quarterly earnings release, Wells Fargo boosted allowances for losses connected to its commercial property loans, driven mostly by the firm’s exposure to offices, flagging a $949 million increase in their credit loss allowance. However, management said that significant losses have not been observed so far. For context, banks typically boost reserves for credit losses as a preventative measure to curb losses from borrowers who could default on their loans. This, in theory, gives Wells Fargo the extra capital to absorb credit losses during a market downturn or periods of extreme volatility. For context, JPMorgan Chase (JPM) also bulked up its reserves in anticipation of rising office property loan losses. Wells Fargo stands to benefit from its multiyear recovery plan once U.S. regulators decide to lift its asset cap, which would increase its balance sheets, along with its valuation that’s providing a cushion to any downward earnings estimates. Still, it remains unclear when regulators may lift these rules. “The losses are still quite small,” Chief Financial Officer Michael Santomassimo said in July. “We do expect that there will be more weakness in the market, and it’s going to take a while to play out.” CEO Charlie Scharf said the bank sustained “higher losses in commercial real estate, primarily in the office portfolio.” He added, “While we haven’t seen significant losses in our office portfolio-to-date, we are reserving for the weakness that we expect to play out in that market over time.” Still, revenue from Wells Fargo’s commercial real estate business rose to $1.33 billion in the second quarter, up 26% from 2022 and 2% higher from the last quarter. The banking giant attributed the gains to “higher interest rates and higher loan balances.” Wells Fargo may not stand to gain as much as Morgan Stanley from an uptick in investment banking, but the comments made by management during the Barclays conference indicate ongoing signs of recovery for the bank. “A lack of bad news turned out to be good news,” Jeff Marks, CNBC Investing Club’s Director of Portfolio Analysis, said during a Morning Meeting earlier this month. Wells Fargo execs emphasized the bank’s solid forward guidance while signaling an improved efficiency ratio as the Wall Street giant continues to cut costs via various restructuring plans like layoffs. Santomassimo said the macro picture is “much better than people would have expected at this point” as well. (Jim Cramer’s Charitable Trust is long WFC, MS. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

Collin Madden, founding partner of GEM Real Estate Partners, walks through empty office space in a building they own that is up for sale in the South Lake Union neighborhood in Seattle, Washington, May 14, 2021.

Karen Ducey | Reuters

Banks are facing mounting uncertainty as the commercial real estate (CRE) sector continues to struggle. But, tailwinds in our financial names should help safeguard their bottom lines.

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

Post By Oil and Gas Breaking News: Markets, business news, Cadence Design Systems Inc, Central banking, Coterra Energy Inc, ETSY Inc, Ford Motor Co, Investment strategy, Jim Cramer, Markets, NASDAQ Composite, NVIDIA Corp, Oil and Gas, Pioneer Natural Resources Co, S&P 500 Index, SoftBank Group Corp, U.S. 10 Year Treasury, WTI Crude (Mar'23)

My top 10 things to watch Thursday, Sept. 14 1. U.S. equities edge up in premarket trading, with investors largely betting the Federal Reserve won’t raise interest rates further when the central bank convenes next week. The S & P 500 is up 0.33%, while the Nasdaq Composite is 0.24% higher. U.S. government bond yields tick up, with that of the 10-year Treasury hovering just below 4.3%. 2. Oil prices continue to climb higher, with West Texas Intermediate crude, the U.S. oil benchmark, climbing above $90 a barrel for the first time since last November. Club oil holdings Coterra Energy (CTRA) and Pioneer Natural Resources (PXD) are up 1.48% and 0.88%, respectively, in early trading. Here’s the Club’s take on oil’s 10-month highs. 3. U.S. wholesale inflation climbs more than expected in August, according to the Labor Department’s monthly producer price index. At the same time, U.S. retail sales come in higher than predicted for last month, the Commerce Department reports, though the gains are largely driven by higher gasoline prices. 4. The European Central Bank raises interest rates by a quarter percentage point , bringing its deposit rate to a record-high 4%. The increase is the ECB’s 10th-conesecutive rate hike. 5. British chip designer Arm Holdings, owned by SoftBank Group (SFTBF), sets its highly anticipated initial public offering at $51 a share , valuing the company at over $54 billion. At this price, there’s not a lot of room for error. The firm will start trading Thursday on the Nasdaq under the stock symbol ARM. 6. The European Union launches an “anti-subsidy” investigation into China’s electric-vehicle companies, with Beijing calling the move “blatant protectionism.” Will Europe go 27.5% tariffs on Chinese cars? This could be a real issue for China. 7. China’s central bank is cutting the reserve requirement ratio for all banks, except those that have implemented a 5% reserve ratio, by 25 basis points from Sept. 15, in the government’s latest effort to prop up its faltering economy. 8. Jim Farley, the CEO of Club holding Ford Motor (F), rejects allegations by United Auto Workers President Shawn Fain that the automaker is not taking bargaining seriously ahead of a Thursday night strike deadline. Here’s the Club’s take on how a union strike could impact Ford. 9. KeyBank raises its price target on Chip designer Cadence Design Systems (CDNS) to $290 a share, up from $270, while reiterating an overweight rating on the stock. The firm’s call comes after KeyBank analysts met with early users of the company’s new AI-enabled EDA design portfolio. Cadence is a partner of AI chipmaker and Club holding Nvidia ( NVDA). 10. Wolfe Research upgrades ecommerce firm Etsy Inc. (ETSY) to outperform, from peer perform, with a $100-per-share price target. The firm cites “many paths” for Etsy shares to outperform over the next 12-18 months. Sign up for my Top 10 Morning Thoughts on the Market email newsletter for free . (See here for a full list of the stocks at Jim Cramer’s Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

My top 10 things to watch Thursday, Sept. 14

1. U.S. equities edge up in premarket trading, with investors largely betting the Federal Reserve won’t raise interest rates further when the central bank convenes next week. The S&P 500 is up 0.33%, while the Nasdaq Composite is 0.24% higher. U.S. government bond yields tick up, with that of the 10-year Treasury hovering just below 4.3%.

2. Oil prices continue to climb higher, with West Texas Intermediate crude, the U.S. oil benchmark, climbing above $90 a barrel for the first time since last November. Club oil holdings Coterra Energy (CTRA) and Pioneer Natural Resources (PXD) are up 1.48% and 0.88%, respectively, in early trading. Here’s the Club’s take on oil’s 10-month highs.

3. U.S. wholesale inflation climbs more than expected in August, according to the Labor Department’s monthly producer price index. At the same time, U.S. retail sales come in higher than predicted for last month, the Commerce Department reports, though the gains are largely driven by higher gasoline prices.

4. The European Central Bank raises interest rates by a quarter percentage point, bringing its deposit rate to a record-high 4%. The increase is the ECB’s 10th-conesecutive rate hike.

5. British chip designer Arm Holdings, owned by SoftBank Group (SFTBF), sets its highly anticipated initial public offering at $51 a share, valuing the company at over $54 billion. At this price, there’s not a lot of room for error. The firm will start trading Thursday on the Nasdaq under the stock symbol ARM.

6. The European Union launches an “anti-subsidy” investigation into China’s electric-vehicle companies, with Beijing calling the move “blatant protectionism.” Will Europe go 27.5% tariffs on Chinese cars? This could be a real issue for China.

7. China’s central bank is cutting the reserve requirement ratio for all banks, except those that have implemented a 5% reserve ratio, by 25 basis points from Sept. 15, in the government’s latest effort to prop up its faltering economy.

8. Jim Farley, the CEO of Club holding Ford Motor (F), rejects allegations by United Auto Workers President Shawn Fain that the automaker is not taking bargaining seriously ahead of a Thursday night strike deadline. Here’s the Club’s take on how a union strike could impact Ford.

9. KeyBank raises its price target on Chip designer Cadence Design Systems (CDNS) to $290 a share, up from $270, while reiterating an overweight rating on the stock. The firm’s call comes after KeyBank analysts met with early users of the company’s new AI-enabled EDA design portfolio. Cadence is a partner of AI chipmaker and Club holding Nvidia (NVDA).

10. Wolfe Research upgrades ecommerce firm Etsy Inc. (ETSY) to outperform, from peer perform, with a $100-per-share price target. The firm cites “many paths” for Etsy shares to outperform over the next 12-18 months.

Sign up for my Top 10 Morning Thoughts on the Market email newsletter for free.

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Oil prices are at 10-month highs. Here’s what Cramer thinks it means for two energy stocks

Post By Oil and Gas Breaking News: Markets, business news, Coterra Energy Inc, Eli Lilly and Co, Energy, Exxon Mobil Corp, Investment strategy, Jim Cramer, Markets, NVIDIA Corp, Oil and Gas, Pioneer Natural Resources Co, stock takes, WTI Crude (Mar'23)

Oil prices are hovering around 10-month highs, as a stout summer rally extends into the fall and delivers additional gains for the Club’s energy stocks, Pioneer Natural Resources (PXD) and Coterra Energy (CTRA). And Jim Cramer believes it’s not too late to buy either of them. West Texas Intermediate crude, the U.S. oil benchmark, has jumped 32% since its lows of the summer on June 12, to nearly $89 a barrel. Meanwhile, global oil standard Brent crude has climbed 28%, to around $92 a barrel. Both WTI and Brent on Tuesday settled at their highest levels since November. Over the same stretch since June 12, Pioneer stock has risen 17.1%, while Coterra gained 16.4%. That makes them the fifth and sixth best-performing Club stocks during that time — ahead of artificial intelligence winner Nvidia (NVDA), but behind pharmaceuticals giant Eli Lilly (LLY). Coterra on Tuesday closed at its highest level of the year, at $28.47 per share. Pioneer is about 3% off its 2023 peak of $243 per share, reached on Sept. 5. “I think that it is not too late to buy either of these,” Jim Cramer noted on Tuesday. The rise in oil prices largely boils down to a mismatch between supply and demand. Production cuts from major oil exporters such as Saudi Arabia and Russia have contributed to tighter supplies at a time when major economies have remained healthier than expected. Indeed, prices took a major leg higher last week after Saudi Arabia and Russia said they’d extend through year-end their voluntary output reductions of a combined 1.3 million barrels per day. This week’s move in crude was helped by a new report from the Organization for Petroleum Exporting Countries , which projected that oil demand will grow by 2.25 million barrels per day in 2024, citing economic resiliency. Saudi Arabia is the de-facto leader of OPEC. Russia is the oil cartel’s largest partner producer in an expanded group known as OPEC+ . The current backdrop may keep oil prices supported through the fall, according to the U.S. Energy Information Administration’s short-term outlook published Tuesday . Citing Saudi Arabia’s production-cut extension and an expected further drawdown of global oil inventories, the government statistics agency forecasted Brent crude will average around $93 a barrel in the fourth quarter, less than 1% above where it settled Tuesday. If higher oil prices – and by extension fuel prices – are sustained in the coming months, the investment implications may be somewhat mixed. On one hand, Pioneer and Coterra would likely generate more free cash flow than in the first half of 2023 , which could lead to increased share repurchases and higher dividend payouts — key reasons investors like us are in the stocks. On the other hand, it may complicate the Federal Reserve’s efforts to squash inflation through higher interest rates. For much of this year, the downward trend in oil prices contributed to lower year-over-year inflation readings . Now, “oil is the wildcard” that might prompt the U.S. central bank to rethink policy and raise interest rates more aggressively than previously thought necessary, according to Jim. In the Labor Department’s monthly consumer price index report for August, released Wednesday, higher gasoline prices were responsible for more than half of the headline 0.6% month-over-month increase. Currently, the Fed is expected leave interest rates unchanged between 5.25% and 5.5% at its meeting next week, according to the CME Group’s FedWatch tool . The Fed had paused raising interest rates in June, before instituting another quarter-percentage-point increase in July — the central bank’s 11th rate hike in 17 months. There was no policy decision in August. Put another way, our energy exposure’s role as an inflation hedge – on display throughout 2022 following the crude-price surge tied to Russia’s invasion of Ukraine in February of that year – may become more apparent. And it adds to the attractiveness of owning Pioneer and Coterra here. Jim sees additional upside for both. Pioneer’s stock is less than 2% higher than where it traded back in April, in the days following a “bogus” report that Exxon Mobil (XOM) held talks to acquire the Club holding, Jim pointed out. Shares of Pioneer “should be much higher,” he said, noting the potential for more robust capital returns due to higher oil prices. Plus, he said, Pioneer’s natural-gas offerings are another potential plus for the stock. “I hadn’t figured it would matter that much, but any increase in nat-gas prices could be an added benefit,” he said. Coterra offers a quality mix between crude and natural-gas exposure. While natural gas prices are dramatically lower than a year go, the commodity has gained in recent months. And it’s currently riding a four-day winning streak, settling Tuesday at $2.743 per million British thermal units. That has helped Coterra shares. But Jim said the stock has still yet to break out in a meaningful way. “There’s more room to run,” he said. “I could see the stock busting through the $30 level.” (Jim Cramer’s Charitable Trust is long PXD and CTRA . See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

An oil pump jack in Great Plains, southeastern Wyoming.

Marli Miller | Universal Images Group | Getty Images

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The Investing Club’s top things to watch in the stock market Friday

Post By Business Alphabet Inc, Amazon.com Inc, Breaking News: Business, Breaking News: Markets, business news, Inflation, Investment strategy, Jim Cramer, Markets, Marvell Technology Inc, Microsoft Corp, Netflix Inc, Nordstrom Inc, NVIDIA Corp, Realty Income Corp, Retail industry, Walt Disney Co

The Club’s top things to watch Friday, August 25 1. Stocks edge up in premarket trading Friday after coming under pressure Thursday. The market is looking to Federal Reserve Chair Jerome Powell’s speech in Jackson Hole , Wyoming, at 10:05 a.m. ET. Investors expect Powell to argue interest rates will need to stay higher for longer in order to stamp out sticky inflation. 2. The Chinese government on Friday moves to ease its mortgage policies in order to boost China’s struggling property market, but it isn’t enough to generate a rally in Asian markets. The Shanghai Composite Index lost 0.6%, while Hong Kong’s Hang Seng Index fell 1.4%. 3. Chipmaker Marvell Technology (MRVL) delivers a quarter and guidance in line with Wall Street’s expectations, as strength in artificial-intelligence applications is offset by continued weakness in some of its legacy businesses like storage. The stock fell more than 3% in premarket trading Friday. The company increases its outlook for AI, with the expectation to exit the year at a $200 million quarterly run rate, or $800 million annualized. That may not be enough upside for today given the tepid reaction to Club name Nvidia ‘s (NVDA) huge upside guide Wednesday, but still a good long-term story. 4. Elsewhere in the the world of AI, Baird says next week’s Google Cloud Next conference could show how Club holding Alphabet (GOOGL) is leveraging AI capabilities. Meanwhile, Oppenheimer reiterates its thesis that Club name Microsoft (MSFT) will be the “operating system for AI.” 5. Retailer Nordstrom (JWN) beats on earnings but reiterates a cautious full-year outlook. The company also notes losses from theft are at a historical high. Shares fell over 4% in extended trading Thursday. More broadly, retail earnings this season have showed that American consumers are spending with value top of mind . 6. Loop Capital on Friday upgrades Netflix (NFLX) to buy, from hold, while raising its price target to $500 a share, up from $425. The firm cites improving fundamentals, while noting the shares have corrected 15% from Netflix stock’s recent gains. Upgrading at this juncture is the right way to look at a sell-off in a high-quality company. 7. More ESPN partnerships on the way? Club holding Amazon (AMZN) is reportedly in talks with fellow Club name Walt Disney (DIS) about developing an ESPN streaming service, according to The Information . Disney currently owns 80% of the sports network. 8. Realty Income Corp (O) on Friday announces a $950 million investment in the real-estate assets of The Bellagio Las Vegas, acquiring a 21.9% indirect interest from Blackstone Real Estate Income Trust (BREIT) that values the property at $5.1 billion. Sign up for my Jim Cramer’s Top 10 Morning Thoughts on the Market email newsletter for free . (See here for a full list of the stocks at Jim Cramer’s Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

The Club’s top things to watch Friday, August 25

1. Stocks edge up in premarket trading Friday after coming under pressure Thursday. The market is looking to Federal Reserve Chair Jerome Powell’s speech in Jackson Hole, Wyoming, at 10:05 a.m. ET. Investors expect Powell to argue interest rates will need to stay higher for longer in order to stamp out sticky inflation.

2. The Chinese government on Friday moves to ease its mortgage policies in order to boost China’s struggling property market, but it isn’t enough to generate a rally in Asian markets. The Shanghai Composite Index lost 0.6%, while Hong Kong’s Hang Seng Index fell 1.4%.

3. Chipmaker Marvell Technology (MRVL) delivers a quarter and guidance in line with Wall Street’s expectations, as strength in artificial-intelligence applications is offset by continued weakness in some of its legacy businesses like storage. The stock fell more than 3% in premarket trading Friday. The company increases its outlook for AI, with the expectation to exit the year at a $200 million quarterly run rate, or $800 million annualized. That may not be enough upside for today given the tepid reaction to Club name Nvidia‘s (NVDA) huge upside guide Wednesday, but still a good long-term story.

4. Elsewhere in the the world of AI, Baird says next week’s Google Cloud Next conference could show how Club holding Alphabet (GOOGL) is leveraging AI capabilities. Meanwhile, Oppenheimer reiterates its thesis that Club name Microsoft (MSFT) will be the “operating system for AI.”

5. Retailer Nordstrom (JWN) beats on earnings but reiterates a cautious full-year outlook. The company also notes losses from theft are at a historical high. Shares fell over 4% in extended trading Thursday. More broadly, retail earnings this season have showed that American consumers are spending with value top of mind.

6. Loop Capital on Friday upgrades Netflix (NFLX) to buy, from hold, while raising its price target to $500 a share, up from $425. The firm cites improving fundamentals, while noting the shares have corrected 15% from Netflix stock’s recent gains. Upgrading at this juncture is the right way to look at a sell-off in a high-quality company.

7. More ESPN partnerships on the way? Club holding Amazon (AMZN) is reportedly in talks with fellow Club name Walt Disney (DIS) about developing an ESPN streaming service, according to The Information. Disney currently owns 80% of the sports network.

8. Realty Income Corp (O) on Friday announces a $950 million investment in the real-estate assets of The Bellagio Las Vegas, acquiring a 21.9% indirect interest from Blackstone Real Estate Income Trust (BREIT) that values the property at $5.1 billion.

Sign up for my Jim Cramer’s Top 10 Morning Thoughts on the Market email newsletter for free.

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

Post By Oil and Gas Amgen Inc, Biotech and Pharmaceuticals, Breaking News: Business, Breaking News: Markets, business news, Cleveland-Cliffs Inc, Coterra Energy Inc, Hang Seng Index, Investment strategy, Jim Cramer, Markets, Marriott International Inc, NVIDIA Corp, Oddity Tech Ltd, Oil and Gas, Retail industry, Target Corp, TJX Companies Inc, Toast Inc, United States Steel Corp, Urban Outfitters Inc, Walmart Inc

My top 10 things to watch Monday, August 14 1. It’s a big week of retail earnings. Is Target (TGT) undervalued? Is Walmart (WMT) overvalued? Is Club name TJX Companies (TJX) going to start with its usual up two points and then cascade down two? That’s what you need to be ready for. TJX and Target report second-quarter results on Wednesday, while Walmart reports on Thursday. 2. Morgan Stanly on Monday names Club holding Nvidia (NVDA) a top pick, while predicting a beat and raise when the company reports second-quarter results on Aug. 23. But I really want to warn people that I don’t think it’s ready to be bought . 3. Mizuho on Monday raises its price target on Amgen (AMGN), a very low-risk pharmaceuticals company, to $223 a share from $214, while maintaining a neutral rating on the stock. Elsewhere, Jefferies raises its price target on Amgen to $310 a share, up from $275, and reiterates a buy rating. 4. U.S. Steel (X) rejects an unsolicited takeover bid from rival Cleveland-Cliffs (CLF) that would have valued the former at roughly $7 billion. Cliffs is willing to buy anything. But why would the Federal Trade Commission ever allow this? U.S. Steel said Sunday it’s reviewing its strategic options. 5. Citigroup on Monday downgrades Urban Outfitters (URBN) to neutral from buy ahead of the clothing retailer’s second-quarter earnings on Aug. 22, while raising its price target to $40 a share, up from $36. The firm expects URBN to deliver an earnings beat, but thinks market expectations are too high going into the print. I like this company and find this downgrade disturbing. 6. Following a red-hot initial public offering last month, Morgan Stanley on Monday initiates coverage on beauty-and-wellness company Oddity Tech (ODD) with the equivalent of a hold rating and $57-a-share price target. The bank cites “strong long-term revenue growth prospects” for Oddity, but thinks the positives are already priced into the stock’s valuation. 7. Bernstein on Monday downgrades hotel chain Marriott International (MAR) to market perform, or neutral, from outperform, arguing the stock’s short-term upside is limited by its increased valuation this year and a slowdown in the U.S. luxury space. But the firm increases its price target on Marriott to $218 a share, up from $204. 8. Mizuho on Monday raises its price target on restaurant-management-software firm Toast (TOST) to $30 a share, up from $27, while maintaining a buy rating on the stock, following its “very strong” second-quarter results. Baird, conversely, designated Toast a “bearish fresh pick” following its big run of late. The firm has a neutral rating on the stock, with a price target of $25 a share. 9. China’s Country Garden, the country’s largest private real-estate developer, suspends trading of its onshore bonds on Monday, in a sign it could soon move to restructure its debt. Shares are down roughly 17%, weighing heavily on Hong Kong’s Hang Seng Index . The news is the latest sign Beijing will likely need to step in to shore up China’s beleaguered real-estate sector. 10. Piper Sandler on Monday raises its price target on Club name Coterra Energy (CTRA) to overweight, or buy, from neutral, on expectations for “strong execution across the portfolio.” The bank increases its price target on the oil-and-gas firm to $35 a share, up from $30. And remember to tune into the Club’s Monthly Meeting on Thursday at 12:00 p.m. ET. (See here for a full list of the stocks at Jim Cramer’s Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

My top 10 things to watch Monday, August 14

1. It’s a big week of retail earnings. Is Target (TGT) undervalued? Is Walmart (WMT) overvalued? Is Club name TJX Companies (TJX) going to start with its usual up two points and then cascade down two? That’s what you need to be ready for. TJX and Target report second-quarter results on Wednesday, while Walmart reports on Thursday.

2. Morgan Stanly on Monday names Club holding Nvidia (NVDA) a top pick, while predicting a beat and raise when the company reports second-quarter results on Aug. 23. But I really want to warn people that I don’t think it’s ready to be bought.

3. Mizuho on Monday raises its price target on Amgen (AMGN), a very low-risk pharmaceuticals company, to $223 a share from $214, while maintaining a neutral rating on the stock. Elsewhere, Jefferies raises its price target on Amgen to $310 a share, up from $275, and reiterates a buy rating.

4. U.S. Steel (X) rejects an unsolicited takeover bid from rival Cleveland-Cliffs (CLF) that would have valued the former at roughly $7 billion. Cliffs is willing to buy anything. But why would the Federal Trade Commission ever allow this? U.S. Steel said Sunday it’s reviewing its strategic options.

5. Citigroup on Monday downgrades Urban Outfitters (URBN) to neutral from buy ahead of the clothing retailer’s second-quarter earnings on Aug. 22, while raising its price target to $40 a share, up from $36. The firm expects URBN to deliver an earnings beat, but thinks market expectations are too high going into the print. I like this company and find this downgrade disturbing.

6. Following a red-hot initial public offering last month, Morgan Stanley on Monday initiates coverage on beauty-and-wellness company Oddity Tech (ODD) with the equivalent of a hold rating and $57-a-share price target. The bank cites “strong long-term revenue growth prospects” for Oddity, but thinks the positives are already priced into the stock’s valuation.

7. Bernstein on Monday downgrades hotel chain Marriott International (MAR) to market perform, or neutral, from outperform, arguing the stock’s short-term upside is limited by its increased valuation this year and a slowdown in the U.S. luxury space. But the firm increases its price target on Marriott to $218 a share, up from $204.

8. Mizuho on Monday raises its price target on restaurant-management-software firm Toast (TOST) to $30 a share, up from $27, while maintaining a buy rating on the stock, following its “very strong” second-quarter results. Baird, conversely, designated Toast a “bearish fresh pick” following its big run of late. The firm has a neutral rating on the stock, with a price target of $25 a share.

9. China’s Country Garden, the country’s largest private real-estate developer, suspends trading of its onshore bonds on Monday, in a sign it could soon move to restructure its debt. Shares are down roughly 17%, weighing heavily on Hong Kong’s Hang Seng Index. The news is the latest sign Beijing will likely need to step in to shore up China’s beleaguered real-estate sector.

10. Piper Sandler on Monday raises its price target on Club name Coterra Energy (CTRA) to overweight, or buy, from neutral, on expectations for “strong execution across the portfolio.” The bank increases its price target on the oil-and-gas firm to $35 a share, up from $30.

And remember to tune into the Club’s Monthly Meeting on Thursday at 12:00 p.m. ET.

(See here for a full list of the stocks at Jim Cramer’s Charitable Trust.)

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