My top 10 things to watch for Wednesday, December 7, 2022. 1. Does the reopening of Covid in China mean anything? Are US stock futures and oil prices still falling? So it’s not in the playbook. I’ll talk this morning and later about CNBC’s “Halftime Report”. Big back-to-back losses on Monday and Tuesday for the S&P 500, which is now on a four-game losing streak. We posted a comment late Tuesday on our position. 2. Two of the three Club stocks closely linked to China – Starbucks (SBUX) and Wynn Resorts (WYNN) – are down. Only Estee Lauder (EL) is higher in the pre-market as China no longer requires a negative Covid test to travel to other parts of the country. South China Morning Post and Nikkei confirm Hainan is open for business. Huge volume of business. High margin. 3. Barclays accumulates and reduces all price targets for oil companies. When they ran, they were loved. Now they are hated at the lower end of the range as US crude prices fall below $75 a barrel. How much less, $65? The club name Coterra Energy (CTRA) has also been downgraded to sell from neutral to Citi. Ridiculous. Enough already, are you selling oil and natural gas near the bottom? 4. Morgan Stanley takes an “incrementally more conservative” approach to Apple (AAPL). Reduced near-term forecast for iPhone following news of slower production ramp at Foxconn’s assembly plant in Zhengzhou, China. Maintains $175 per share price target on Apple and overweight (buy) rating. Morgan Stanley cut estimates on iPhone shipments on December 1 by an additional three million to 75.5 million units. 5. RBC Capital raises Nike (NKE) target price to $120 per share from $115; maintains outperformance (buy) rating. It’s the reopening of China and everyone suddenly decided to take profits on something like this. They all ran too much. Suspects can generate low double-digit percentage revenue growth. 6. Bernstein says additional price cuts on Tesla (TSLA) vehicles could take place next year. Steady drumbeat of negativity around this one because of China just as it opens? Consensus estimates at risk. According to analyst Toni Sacconaghi, Tesla “appears to have a demand problem more and more.” 7. Carvana (CVNA) shares are crushed; down more than 20% premarket to just over $5 a share. Wedbush says risk of bankruptcy increases; cooperation agreement about 70% of unsecured debt; BlackRock (BLK), Ares Management and Knighthead Capital Management are all on board. Amazingly, Carvana’s all-time high was nearly $377 per share in August 2021. 8. Wolfe with true negative chunk on Shopify (SHOP), moves to peer performance from outperform (hold back from buying ). The tailwinds of e-commerce are over. Judging by the way United Parcel Service (UPS) and FedEx (FDX) are acting, it’s going to be a miserable online shopping Christmas. What about the Amazon Holding Club (AMZN)? 9. Wolfe takes his rating on Booking Holdings (BKNG) to compare performance to outperform (hold to buy); sees the travel industry as a whole the same way. Sorry, this looks like a spike, because comparisons are getting hard. Less effective customer acquisition methods will make numbers hard to hit. 10. If you blinked, you missed MongoDB (MDB). One day I wondered how to improve the coding ability like so many others, but it pivoted quite easily to profitability. Shares up 26% in Wednesday’s premarket. Surprising adjusted quarterly profit and guidance for another. (Jim Cramer’s Charitable Trust is long SBUX, WYNN, EL, AMZN, and AAPL. See here for a full list of stocks.) 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 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 Wednesday, December 7, 2022.
1. Does the reopening of Covid in China mean anything? Are US stock futures and oil prices still falling? So it’s not in the playbook. I’ll talk this morning and later about CNBC’s “Halftime Report”. Big back-to-back losses on Monday and Tuesday for the S&P 500, which is now on a four-game losing streak. We posted a comment late Tuesday on our position.
2. Two of the Club’s three actions are closely linked to China — Starbucks (SBUX) and Wynn Resorts (WYNN) – are down. Only Estee Lauder (EL) is higher in pre-market as China no longer requires a negative Covid test to travel to other parts of the country. South China Morning Post and Nikkei confirm Hainan is open for business. Huge volume of business. High margin.
