1. Debt ceiling talks are set to resume Monday between President Joe Biden and House Speaker Kevin McCarthy. They’re still far apart. Biden is back from his overseas trip. Does that help? Debt provision in the 14th Amendment is totally on the table ahead of the early June default deadline. Wall Street is set for a mixed open. In my Sunday commentary for Club members, I talked about stocks to own to take the debt ceiling issue out of your investing equation.
2. Minneapolis Fed President Neel Kashkari wants banks to raise more capital. Will crush earnings for banks. Many banks have little price-to-earnings multiples. Kashkari tells CNBC on Monday morning that if the Fed were to pause interest rate hikes at the June meeting it would not necessarily mean the end of tightening. Reiterates data-dependent mantra. April employment report this Friday is key.
3. JPMorgan (JPM) said Monday it will generate about $84 billion in net interest income this year. $3 billion higher than its last guidance in April. Full-year expenses estimated at $84.5 billion, excluding $3.5 billion in costs to integrate its government-brokered acquisition of failed First Republic.
4. Club holding Ford (F) unveiled at Monday’s investor day deals for the supply of lithium, a key ingredient in electric vehicle batteries. General Motors (GM), meanwhile will introduce an all-electric Cadillac “Escalade IQ” later this year.
5. Chevron (CVX) to buy oil producer PDC Energy (PDCE) in a $6.3 billion deal. Separately, Stifel cuts its price target on Club oil and natural producer Pioneer Natural Resources (PXD) to $273 per share from $290. Keeps buy rating. PXD is one of the highest-yielding stocks in the S&P 500. Tempted to buy some if it gets hit. PXD beat on earnings back in April and announced CEO succession plans.
6. The last three companies in the portfolio report earnings in the week ahead: Palo Alto Networks (PANW) after the closing bell Tuesday; Nvidia (NVDA) Wednesday; and Costco (COST) Thursday. 95% of the S&P 500 companies have now reported quarterly results About three-quarters of them issued beat on revenue. About 78% beat on earnings.
7. After last week’s terrible quarter, Club holding Foot Locker (FL) caught tons of price target cuts on Wall Street. We say buy it when it settles. Might settle Monday. Citi urges caution Nike (NKE) off of Foot Locker. Is that the right readthrough? We know Foot Locker CEO Mary Dillon wants to rely less on Nike as part of her “Lace Up” turnaround plan. We still have faith in Dillon who did great things as CEO of once-trouble Ulta Beauty (ULTA).
8. Club name Meta Platforms (META) is fined $1.3 billion by EU regulators for sending data harvested from European uses to the U.S. Chinese-owned TikTok, trying to assuage Western worries, has been working on a $1.5 billion project to store U.S. user data on Oracle servers. Montana last week became the first U.S. state to announce a ban on TikTok, which has already been prohibited on federal government devices.
9. Apple (AAPL) downgraded by Loop Capital to hold from buy. Price target kept at $180 per share. Loop’s supply chain analyst says, “We’ve now seen AAPL reduce its builds (and we believe shipment forecasts) for essentially the second time in the last 4 weeks.” Usual chatter. We always say “own Apple, don’t trade it” and continue to say so.
10. Morgan Stanley says buy Club names Estee Lauder (EL) and Constellation Brands (STZ).
(See here for a full list of the stocks in 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.
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