My top 10 things to watch Wednesday 22 March
1. The Fed Meeting: Does it Really Matter? Despite the banking crisis, the market has almost a 90% chance of a new interest rate hike of a quarter point on Wednesday afternoon. Investors are looking for forward-looking comment in the policy statement and in the press conference following Fed Chairman Jerome Powell’s meeting. The Dowthe S&P 500 and the Nasdaq are set for cushioned opening.
2. Bank of the First Republic (FRC) guessing game: why does it need so many bankers? Lazard now and JPMorgan (JPM) advice? How much help should the government give these guys? Huntington Bank Stocks (HBAN), meanwhile, has the highest ratio of insurance to deposits, so there is virtually no outflow. Can it be the leader here in the superregionals? On “Mad Money,” the CEO forecasts net interest margin (NIM) unchanged and says business is strong.
3. GameStop (GME) shares are up 50% early Wednesday, the morning after the video game retailer posted its first quarterly profit in two years helped by cost cutting. CEO says more cost savings coming in 2023. Holiday quarter revenue: $2.23 billion. Too few analysts cover the meme stock, so the results aren’t comparable to estimates.
4. Nvidia (NVDA) and Microsoft-backed OpenAI has been collaborating on a chatbot for seven years, but it literally caught on. We are just beginning to know the depth of knowledge. I think industrial use, medical use, car use, educational use and call center use are key here. Multiple price target increases for this Club share.
5. Meta platforms (META): KeyBanc is seeing signs of improvement in CPM (cost per thousand) ad impressions, which must mean it’s found a solution to Apple‘s (AAPL) privacy rules. Now that costs at Club have dropped massively with Meta, there could be a major turnaround here. So KeyBanc upgrades to hold sector weight (buy hold) overnight.
6. Citi is reducing club ownership Halliburton (HAL) price target from $47 to $44 per share, but thinks energy investment upcycle won’t be derailed by lack of economic growth. On Friday, we bought more shares of Halliburton and upgraded the stock to our 1 rating.
7. Barclays says it’s time to buy Dow stock Nike (NKE) due to China’s comeback. Raises price target from $100 to $154 per share. Contrary opinion, but probably correct. After Tuesday’s bell, Nike handily beat estimates of quarterly revenue and profit. The full-year revenue forecast has improved.
8. DR Horton (DHI): Wolfe Research Downgrades to Peer Perform from Outperform (Hold Buy). Natural progression of house prices finally falling year after year, even if only by a small amount. Wolfe upgrades home builder PulteGroup (PHM) to perform better.
9. Rivian Automotive (RIVN) is now trading just below cash value. Morgan Stanley analysts say the electric vehicle startup is getting interesting.
10. Krispy Kreme (DNUT) upgraded to buy from the hold at Truit. Household name. International headwind. Truist analysts raise the price target from $15 to $20 per share.
(Jim Cramer’s Charitable Trust is long NVDA, MSFT, META, AAPL, HAL. See here for a full list of stocks.)
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 charity’s portfolio. If Jim has talked about a stock on CNBC TV, he will wait 72 hours after the trade alert is issued before executing the trade.