1. U.S. stocks edge lower in premarket trading Monday, with the S&P 500 down 0.2%, despite a last-minute deal by Congress to temporarily avoid a government shutdown. To that end, here’s Jim Cramer’s latest weekly column on why market sentiment is too negative. Meanwhile, bond yields continue to rise, with that of the 10-year Treasury back above 4.6%. Oil prices are slightly higher, as West Texas Intermediate crude hovers above $91 a barrel.
2. A weekend for break ups: Club name Danaher (DHR) completes the separation of Veralto (VLTO), its water quality business. Check out the Club’s analysis of what the spin-off means for the now faster-growing, higher-margin Danaher, as well as our plan for Veralto. Separately, Kellogg, which will now be known as Kellanova (K), completes the separation of its North American cereal business, WK Kellogg (KLG).
3. Goldman Sachs shuffles its “Conviction Buy List” adding Club holding Nvidia (NVDA), Okta (OKTA), Cintas (CTAS) and Quanterix (QTRX), a neurology-diagnostics company that has a blood-based biomarker tester for early-stage detection of Alzheimer’s disease. Goldman removes Club name Salesforce (CRM) and Johnson Controls International (JCI) from the list, while maintaining buy ratings on both stocks.
4. DA Davidson upgrades Clorox (CLX) to buy from neutral, with an unchanged price target of $152 a share. With the stock down 18% since the company disclosed a cyberattack in mid-August, the firm believes too heavy a financial impact is discounted at current levels.
5. Piper Sandler upgrades enterprise software firms Zscaler (ZS) and Datadog (DDOG) to overweight from neutral. The firm raises its price target on Zscaler to $190 a share, up from $160, and lifts its price target on Datadog to $115 a share, from $88.
6. Susquehanna upgrades FedEx (FDX) to a buy-equivalent rating, from neutral, arguing that cost rationalization and valuation re-rating outweigh any near term concerns about cyclicality. FedEx is breaking away from United Parcel Service (UPS), which Susquehanna keeps at neutral. The firm raises its price target on FedEx to $315 a share, up from $225.
7. Morgan Stanley upgrades U.S. Steel (X) to overweight from equal weight, while raising its price target on the stock to $40 a share, up from $25. The firm also names U.S. Steel a “top pick” on expected value creation from the company’s investments and strategic review process.
8. Jefferies says Club name Microsoft‘s (MSFT) artificial-intelligence tool, M365 Copilot, could drive $3 billion in revenue in fiscal year 2024 and over $19 billion the following year. That would represent about 8% upside to the firm’s current fiscal 2025 total revenue estimate. The tool is set to become generally available on Nov. 1. Jefferies reiterates a buy rating on Microsoft stock, with a $400-per-share price target.
9. UBS nudges up its price target on Club holding Amazon (AMZN) to $180 a share, from $175. The firm argues that the introduction of advertisements on Prime Video could add about $3 billion of revenue next year and boost North American retail margins to 5.4%, from 5%.
10. We were mesmerized over the weekend by videos from U2’s concert at the Las Vegas Sphere, which is owned Sphere Entertainment Co (SPHR).
Sign up for 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.
