My top 10 things to watch Wednesday, March 22
1. The Fed meeting: Does it really matter? Despite the banking crisis, the market puts nearly 90% odds on another quarter-point interest rate hike Wednesday afternoon. Investors are looking for any forward-looking commentary in the policy statement and from Fed Chairman Jerome Powell’s post-meeting news conference. The Dow, the S&P 500 and the Nasdaq are set for a muted open.
2. First Republic Bank (FRC) guessing game: Why does it need so many bankers? Lazard now and JPMorgan (JPM) advising? How much aid does the government have to give these guys? Huntington Bancshares (HBAN), meanwhile, has the highest insurance-to-deposit ratio so it has virtually no outflows. Can it be the leader here in the super regionals? On “Mad Money,” CEO predicts net interest margin (NIM) unchanged and says business strong.
3. GameStop (GME) shares soar 50% early Wednesday, the morning after the video-game retailer delivered a quarterly profit for the first time in two years, helped by expense reductions. CEO says more cost cuts coming in 2023. Holiday-quarter revenue: $2.23 billion. Too few analysts cover the meme-stock so results are not comparable to estimates.
4. Nvidia (NVDA) and Microsoft-backed OpenAI have been working for seven years together on a chatbot but it literally just caught on. We’re just beginning to know the depth of knowledge. I think the industrial uses, the medical uses, the auto uses, the educational uses and the call center uses are front and center here. Multiple price target boosts for this Club stock.
5. Meta Platforms (META): KeyBanc sees signs of improvement in CPM (cost per thousand) ad impressions, which must mean it has figured out a workaround to Apple‘s (AAPL) privacy rules. With costs down huge at Club holding Meta, there could be a major turn here. So KeyBanc upgrades to hold overnight from sector weight (buy from hold).
6. Citi lowers Club holding Halliburton (HAL) price target to $44 per share from $47 but thinks the energy investment upcycle will not be derailed by a 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) because of China’s comeback. Increases price target to $154 per share from $100. Contrary view but probably right. After the bell Tuesday, Nike handily beats estimates on quarterly revenue and earnings. Guidance on full-year revenue boosted.
8. DR Horton (DHI): Wolfe Research downgrades to peer perform from outperform (hold from buy). Natural progression from home prices at last going down year over year even if it’s by a small amount. Wolfe upgrades homebuilder PulteGroup (PHM) to outperform.
9. Rivian Automotive (RIVN) 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 hold at Truist. Household name. International tailwinds. Truist analysts increase price target to $20 per share from $15.
(Jim Cramer’s Charitable Trust is long NVDA, MSFT, META, AAPL, HAL. See here for a full list of the stocks.)
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