What Cramer is watching Monday — back to 2020 on S&P 500, possible major OPEC+ oil cut

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What I am looking at Monday, Oct. 3, 2022 U.S. stock futures bounce as the 10-year and 2-year Treasury yields fall on the first trading day of October and the final quarter of a terrible 2022. The S & P 500 closed at its lowest level since November 2020, finishing out September with its worth monthly performance since March 2020, the month Covid was declared a pandemic. The third-quarter drop marked the third straight quarterly decline on Wall Street. U.S. and international oil prices surge as OPEC+ considers biggest production cut since 2020, more than 1 million barrels per day. Remember, OPEC+ includes Russia. I pointed out in my Sunday commentary for Club members that it’s in Russia’s interest to push crude prices higher as it continues its war against Ukraine. The OPEC+ cut may not happen but its consideration comes at a bad time because crude releases from the United States’ Strategic Petroleum Reserve may be ending. Still another 10 million barrels to be released by November delivery. EQT Corp. (EQT) is now the nation’s largest natural gas producer after a recent acquisition. We like Coterra Energy (CTRA) instead, with nat gas and oil with large Permian footprint. Semiconductor weakness and tech weakness writ large is all about China as I noted in Sunday’s commentary. It turns out China is more important than anywhere else in the world for orders, growth, and earnings. Club holding Advanced Micro Devices (AMD) is now well below where S & P 500 was in November. Now low since May. Moderna (MRNA) declines China efforts to hand over mRNA covid vaccine. Chinese government insists that Moderna turn over the intellectual property, which made it untenable. Time to buy Club holding TJX Companies (TJX)? Sure seems like it with so much inventory around. Goldman Sachs upgrades Club holding Wells Fargo to buy from neutral (hold), citing an under-appreciated earnings story. Business getting excellent as interest rates move higher. One to buy in a recession. Contrast this with Credit Suisse (CS), which may be falling apart. Shares in the U.S. drop 5% in the premarket and shares in Europe drop 10%. The Financial Times says Credit Suisse executives are talking to major investors about concerns over its financial health. Barclays cuts Club holding Honeywell (HON) price-target to $206 per share from $210. Barclays also cuts Ingersoll Rand (IR), Illinois Tool Works (ITW) and General Electric (GE). Bank of America cuts price target to $157 per share from $170 on Amazon (AMZN). Morgan Stanley estimates Club holding Apple (AAPL) App Store revenue fell 5% year over year in September. Still a fallout from hedge fund pioneer Stanley Druckenmiller, who was THE MOST NEGATIVE person at CNBC’s Delivery Alpha. I love him but he has not been very right. The negatives are still out there. Baird cuts price target on Nike (NKE) to $100 per share from $127; Barclays takes PT to $83 from $110. The cuts follow last week’s earnings report that revealed a major inventory glut at Nike. Tesla (TSLA) misses deliveries, does anyone really care? False story to set up earnings surprise: really just a switch of where they make them. Truist says use it to buy. Morgan Stanley says cloud company Box (BOX) has strong momentum, taking price target to $34 per share from $32 and its rating to overweight from equal weight (buy from hold.) RBC Capital says buy CF Industries (CF) on favorable nitrogen levels. I agree as 30-40% of fertilizer comes from Ukraine, Russia and Belarus. RBC also raises CF’s price target to $135 per share from $110. Morgan Stanley cuts price target on work management provider Asana (ASAN) to $28 per share from $35. Perils of recommending stock of company that is losing money. Mizuho cuts price target on Consolidated Edison (ED) to $91 per share from $99, even as it expects a special dividend. Part of a cut of utilities including Sempra (SRE) because of multiple contraction. (Jim Cramer’s Charitable Trust is long CTRA, AMD, TJX, HON, AMZN, AAPL and WFC. 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.

Traders on the floor of the NYSE Sept. 30, 2022.
Source: NYSE

What I am looking at Monday, Oct. 3, 2022

  • U.S. stock futures bounce as the 10-year and 2-year Treasury yields fall on the first trading day of October and the final quarter of a terrible 2022. The S&P 500 closed at its lowest level since November 2020, finishing out September with its worth monthly performance since March 2020, the month Covid was declared a pandemic. The third-quarter drop marked the third straight quarterly decline on Wall Street.
  • U.S. and international oil prices surge as OPEC+ considers biggest production cut since 2020, more than 1 million barrels per day. Remember, OPEC+ includes Russia. I pointed out in my Sunday commentary for Club members that it’s in Russia’s interest to push crude prices higher as it continues its war against Ukraine. The OPEC+ cut may not happen but its consideration comes at a bad time because crude releases from the United States’ Strategic Petroleum Reserve may be ending. Still another 10 million barrels to be released by November delivery.
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