What Cramer is watching Thursday — No Fed reset Qualcomm rough guide iPhone waits
What I am looking at Thursday, Nov. 3, 2022 The great RESET? Nope, not yet. Why did anyone think Federal Reserve Chairman Jerome Powell would say he was done hiking interest rates? At Wednesday afternoon’s conclusion of the Fed’s November meeting, central bankers approved a fourth straight 75-basis-point hike. Why did traders buy the 2 p.m. ET announcement? VERY premature as we saw the market reverse sharply lower into the close. U.S. stocks open lower Thursday morning. The 2- year Treasury yield jumps to nearly 4.74%, a high back to July 2007. Club holding Qualcomm (QCOM): What are you going to do for me lately? The stock fell 7%. Short-term inventory “reset,” meaning there’s a chip glut that must be dealt with before the price-to-earnings multiple can be determined. Slightly better-than-expected fiscal fourth-quarter revenue ; an earnings-per-share match. However, lower guidance. Wall Street was looking for fiscal first-quarter ( current quarter ) revenue of $12 billion, but company guide was $9.2 billion to $10 billion. Looking for fiscal Q1 EPS of $3.43, but now predicting $2.25 to $2.45. Brutal and depressing, and not at all what Qualcomm CEO Cristiano Amon had been saying. Club holding Apple (AAPL): October app store net revenue s down 4% year over year . International app store downloads grew. UBS Evidence Lab says wait times for iPhone 14 Pro and Pro Max tick higher; demand likely to exceed production. China Covid lockdowns and storages “raise a manageable risk.” Club holding Costco (COST): U.S. October core sales, excluding gas and foreign exchange, were up 6.1%. E-commerce slower: overall down 0.7%; core up just 1.6%. This was a fine month, in-line. On a three- year stack base, U.S. adjusted comp up 34.2% consistent with September and up from August. Inflation consistent for food and sundries. Price target hikes on Wall Street for Club name Humana (HUM), a day after the health insurer reported a perfect quarter. This is a company designed for this moment. Stock closed up in Wednesday’s down market and shares up in Thursday’s down market. People less likely to ditch health insurance in an economic downturn. In an SEC filing Thursday morning, Humana said it plans to buy back $1 billion worth of stock in total as part of the $3 billion repurchase program its board authorized back in February 2021. Zillow (Z) says total transaction dollar volume growth in recent weeks down more than 40% year over year . Macro factors continue to weigh on our Premier Agent business. Canaccord downgrades to hold from buy, cuts price target to $34 per shares from $48. Roku (ROKU): Advertising revenue down 5%. Wider than expected third-quarter loss, though beat on revenue . Grim guide: 0.5% platform growth versus 6% prior. CEO Anthony Wood says probably going to be different than the typical holiday season. Big advertisers are not spending. Etsy (ETSY): 7.6 million habitual users. Videos work. Cash flow of more than $200 million. 40 million users pre- Covid pandemic to 90 million after. A company that did well in the pandemic and kept the customers and then added. Third-quarter revenue $594.5 million versus $565 expected. Repurchased 1.5 million shares. The stock up more than 11% but still be down more than 50% year to date. Cybersecurity solutions provide Fortinet (FTNT): Billings guide weak. Soft guide. No longer providing formal bookings. RATIONALIZATION and consolidation needed. Peloton (PTON) slammed by 12%. “Turnaround remains a work in progress,” company says. Broken free cash flow. Had secured $750 million in financing. Qorvo (QRVO): Macro Headwinds. Double downgrade to sell from buy at JPMorgan. Bloated inventories. Robinhood (HOOD): Good expense control. Narrower than expected third-quarter loss. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) profit of $47 million compared to an expected loss of $48 million. Q3 revenue was a match. Trough? But still weak customer acquisition. (Jim Cramer’s Charitable Trust is long QCOM, AAPL, COST and HUM. See here for a full list of the 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 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.
What I am looking at Thursday, Nov. 3, 2022
