Jim Cramer’s top 10 things to watch in the stock market on Wednesday
My top 10 things to watch for Wednesday, July 15 1. Retail inflation in June fell 0.3% on the month compared to expectations for a flat rate. That’s another soft report after yesterday’s consumer price index report. Low fuel prices are a major driver. Stock futures are slightly higher, driven by semiconductor names. 2. ASML rose more than 3% this morning after the Dutch chip maker reported a breakout quarter. It also topped its full-year guidance for the second time this year. The positive action in the stock reflects the state of the market today in addition to reflecting the performance of ASML. It’s been good for years now. You can’t make AI chips without ASML’s extreme ultraviolet (EUV) lithography machines. Club name Intel is a customer. I’ll be speaking about Intel at the Investing Club’s monthly meeting tomorrow at noon ET. 3. Morgan Stanley’s high and low beat, but not as big as we saw yesterday from our rival Goldman Sachs, who owns the Club. It’s a great time to be an investment banker. IPOs, M&A, and debt and equity issuances. After rising 3% yesterday in sympathy with Goldman, Morgan Stanley fell slightly this morning. 4. My bank earnings power ranking yesterday (in order): Goldman, JPMorgan, Bank of America, Citigroup, and the club name Wells Fargo. Still, Wells has done enough to stay in our portfolio. Goldman, who closed the record, has a high-quality problem: too much demand. Barclays raised its price target on Goldman to $1,245 from $1,048. Keep the shopping rate. 5. BlackRock added $192 billion in net cash flows in the second quarter, bringing its assets under management to $15.3 billion. Yes, a trillion. Revenue is up 31%, and operating margins are at multi-year highs. While the overhang at BlackRock this year has been private credit exposure, this is a strong set of numbers. Shares were up 5% in premarket trading. 6. Club name Johnson & Johnson delivered a beat-and-raise this morning, although the stock fell 2%. Tremfya, one of its key growth drugs, exceeded expectations. There has been some weakness on the medical device side, especially among heart diseases. It’s not perfect, but I’m sure they can fix the problem. It could be a buying opportunity when the dust settles in the quarter. 7. Is Eli Lilly’s Foundayo losing out to Novo’s Wegovy in the obesity pill race? That’s taken from a Wall Street Journal story published last night. Wegovy’s ability to reduce weight is seen as higher than Foundayo (16.6% compared to 12.4% in different studies). People also don’t seem to mind food and water restrictions with Wegovy. Admittedly, it’s early days for Foundayo, and marketing efforts are still underway. 8. Morgan Stanley cut its PT on Club name Honeywell Aerospace to $235 from $255. Analysts say recent volatility and valuation changes call for greater discretion. However, they remain happy with the aerospace and defense bases going into revenue. This is the aerospace firm that Honeywell CEO Dave Cote built, and I would use any weakness to buy more. 9. IBM was downgraded from being bought by Oppenheimer. Analysts pointed to a series of missed estimates when the company first released its second quarter yesterday. The stock fell 25% in response, its worst day ever. It’s not time to go in and buy this one yet. IBM has been on the wrong side of a shift in business technology spending — away from software and toward AI hardware and memory chips — and it’s unclear when that will change. 10. Payments company Stripe and private equity firm Advent International are making a joint bid for PayPal, according to Reuters. The companies are reportedly offering $60.50 a share, which would value PayPal at more than $53 billion. The PayPal deal will kick off a long-awaited fintech merger. There are too many of those trading companies, and PayPal has been disappointed for years. It’s down 85% since its July 2021 close. Subscribe to my Top 10 Morning Thoughts in the Market email newsletter for free (See here for a full list of stocks from Jim Cramer’s Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you’ll receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling stock in his charity portfolio. When Jim talks about a stock on CNBC TV, he waits 72 hours after issuing a trade warning before making a trade. THE PRIVATE INFORMATION OF THE BURNING CLUB IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, AND OUR PRIVACY POLICY. NO LEGAL LIABILITY OR OBLIGATION EXISTS, OR IS CREATED, BY YOUR ACCEPTANCE OF ANY INFORMATION PROVIDED BY CONTACTING THE INVESTMENT CLUB. NO PARTICULAR RESULT OR INTEREST IS GUARANTEED.
