My Top 10 Things to Watch Thursday, December 8, 2022 1. U.S. stock futures point to a higher open after the S&P 500 fell five straight sessions, including strong back-to-back declines on Monday and Tuesday. Fear that interest rate hikes by the Federal Reserve could tip the economy into recession has dogged Wall Street lately. 2. Club holding Pioneer Natural Resources (PXD) price target below $260 per share versus $290 at KeyBanc. However, analysts maintain their overweight (buy) rating. Analysts blame the recent drop in natural gas and oil prices. They also cited uncertainty surrounding China’s zero Covid policy, even as Beijing appears to be easing restrictions as we wrote about on Wednesday. 3. The Pentagon awards a $9 billion cloud contract to Joint Warfighting Cloud Capability, or JWCC. It will be split between three Club holdings – Alphabet (GOOGL) Google, Microsoft (MSFT) and Amazon (AMZN) – as well as Oracle (ORCL). 4. Baird downgrades Salesforce (CRM) to a neutral rating from an outperformer (buy), citing turnover in the executive ranks, including co-CEO Bret Taylor. Analysts cut the price target to $150 per share from $200. 5. Citi gives Boeing (BA) a buy rating and price target of $222 per share. Analysts see a “return of great power competition” driving up defense budgets in the United States and Europe. Wells Fargo raises Boeing’s PT to $218 from $185; maintains overweight rating (purchase). Analysts see free cash flow above the company’s 2025-2026 target. For the same reasons, Citi buys Lockheed Martin (LMT) and General Dynamics (GD). Analysts put a neutral on Northrop Grumman (NOC) and L3Harris Technologies (LHX). 6. Barclays raises price target on Toll Brothers (TOL) to $50 per share from $47, but retains an underweight (sell) rating. Low pace of sales: 8,500 home closings vs. 8,800 previous estimates. I ask: is this really a downturn given where mortgage rates have gone up? UBS raises PT on Toll Brothers to $65 from $61; retains the buy rating. Analysts cite strong fourth quarter results. 7. Troubled Carvana (CVNA), whose shares have lost 98% of their value year-to-date as of Wednesday’s close, could lead to much lower used car prices than we already have. This could help cool inflation even further. Wholesale prices for used vehicles hit their lowest level in more than a year last month, according to Cox Automotive. 8. GameStop (GME): Third-quarter revenue fell 8.5% to $1.19 billion from an expected $1.34 billion and a larger-than-expected loss per share of 31 cents. The media say layoffs are coming. Aggressively switched to non-fungible tokens (NFTs) in September. Deal with unaddressed FTX collapsed crypto exchange. 9. Tesla (TSLA) is considering margin loans to reduce Elon Musk’s Twitter debt, according to a Bloomberg report. Interest costs could be $1.2 billion more than a measure of Twitter’s earnings for all of 2021. 10. Bernstein sees Chipotle Mexican Grill (CMG) as a top pick for 2023. analysts call CMG “low hanging fruit”. A low 5-year valuation equates to an attractive entry point. Separately, UBS downgrades Mondelez (MDLZ) to neutral on buy; macro headwinds, limited sales growth. (Jim Cramer’s Charitable Trust is long PXD, GOOGL, MSFT, AMZN, and CRM. See here for a full stock list.) As a CNBC Investing Club subscriber with Jim Cramer, you’ll receive a trade alert before Jim does. a shop. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTMENT CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, AS WELL AS OUR DISCLAIMER. NO OBLIGATION OR FIDUCIARY DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTMENT CLUB. NO SPECIFIC RESULTS OR PROFITS ARE GUARANTEED.
My top 10 things to watch Thursday, December 8, 2022
1. U.S. equity futures point to a higher open after the S&P500 fell five consecutive sessions, including strong back-to-back declines on Monday and Tuesday. Fear that interest rate hikes by the Federal Reserve could tip the economy into recession has dogged Wall Street lately.
2. club outfit Pioneer of natural resources (PXD) price target below $260 per share vs. $290 at KeyBanc. However, analysts maintain their overweight (buy) rating. Analysts blame the recent drop in natural gas and oil prices. They also cited uncertainty surrounding China’s zero Covid policy, even as Beijing appears to be easing restrictions as we wrote on Wednesday.
3. The Pentagon awards a $9 billion cloud contract for Joint Cloud Combat Capability, or JWCC. It will be split between three Club holdings – Alphabetfrom Google (GOOGL), Microsoft (MSFT) and Amazon (AMZN) — so Oracle (ORCL).
4. Baird downgrade Selling power (CRM) rated neutral from outperform (buy), citing turnover in the executive ranks, including co-CEO Bret Taylor. Analysts cut the price target to $150 per share from $200.
