1. There’s no debt ceiling deal until House Speaker Kevin McCarthy says so, not the White House. The Republican leader has the upper hand, knowing a sitting president has never been re-elected with a recession in their last year in office. A government default, even the continued threat of one, could tip the economy over the edge. Debt ceiling talks with President Joe Biden and congressional leaders are expected to resume Tuesday.
2. However, the Dow, the S&P 500 and the Nasdaq are set to open higher as Treasury Secretary Janet Yellen telling The Wall Street Journal over the weekend: “I’m hopeful. I think the negotiations are very active. I’m told they have found some areas of agreement.” The Dow and S&P 500 are coming off back-to-back weekly declines. The Nasdaq eked out a small weekly for the third straight week.
3. In my Sunday column, I explain why investors must buy stocks at the ugliest of moments to catch the coming economic wave about to hit that will be fantastic for the market. After last week’s cooling inflation data, we get government data retail sales Tuesday and earnings from Club retailers TJX Companies (TJX) on Wednesday and Foot Locker (FL) on Friday.
4. Two big CNBC interviews Monday morning: Atlanta Fed President Raphael Bostic says he expects no interest rate cuts this year, even if there’s a recession; and billionaire hedge fund manager Paul Tudor Jones says the Fed is done raising rates and he belives that stocks will finish the year higher from here.
5. Loop Capital upgrades Meta Platforms (META) to a buy from hold, with a huge price target increase to $320 per share from $220. Cites cost cutting and strong position in artificial intelligence to target ads. Loop downgrades Alphabet (GOOGL) to hold from buy. Keeps $125-per-share price target. Notes strong position in AI. But to stay head of competitors like Microsoft (MSFT) valuation might be constrained. All three are Club names.
6. Barclays raises price target on Salesforce (CRM) to $245 per share from $225. Keeps overweight (buy) rating ahead of quarterly earnings, due out May 31. Meanwhile, Jeff Smith’s Starboard sold about half a million CRM shares, bringing their stake down to 2.5 million shares, according to a quarterly SEC filing for the three months ended March 31.
7. Citi analysts raise price target on Ford (F) to $12.80 per share from to $12.50. Keep neutral (hold) rating. Club holding is doing better on balance sheet.
8. Ahead of Walmart (WMT) reporting its quarter on Thursday, Credit Suisse analysts comes out positive and says it could be a good release. Credit Suisse has outperform (buy) rating on Walmart with $170-per-share price target.
9. Oneok (OKE) and Magellan Midstream (MMP) merge; at last there are mergers in the master limited partnerships (MLP) space. This area used to be a favorite of retail investors but have been terrible for seven years. Magellan up 15% on the deal. Oneok off 5.5%. These companies store and transport oil and natural gas. In energy, we like and own exploration and production companies Pioneer Natural Resources (PXD) and Coterra Energy (CTRA) as well as oilfield services giant Halliburton (HAL).
10. From oil to metals, Colorado-based Newmont (NEM) buys Australia’s Newcrest for $17.8 billion. This group’s consolidation continues. Largest deal ever. Solidifies Newmont as biggest.
(See here for a full list of the stocks in Jim Cramer’s Charitable Trust.)
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