What I am looking at June 10, 2022 The May consumer price index report came in hotter than feared. Prices rose 8.6% year over year, the highest level since 1981, and 6% when excluding food and energy prices. Economists were looking for 8.3% for the main index and 5.9% for the core. The theme: a greater probability of a weaker macro environment. DocuSign (DOCU) shares plummeted 26% in the premarket after its quarterly earnings and sales came in below Wall Street estimates. I always say it doesn’t matter where a stock came from, it is where it is going to. This stock was so unnaturally high that the past trading range doesn’t matter at all in figuring out what it is worth. Shares of the electronic-signature technology company got to such heights that it isn’t realistic to look at that past value to see where the stock may rebound. Evercore ISI and downgrades to hold from buy, so does Bank of America. Advanced Micro Devices (AMD) held its analyst day Thursday afternoon. The Club holding seems to be pulling away from Intel (INTC) even more and says long-term financial model for 2025 calls for 20% annual sales growth and 57% gross margin. JPMorgan says “solid execution” has set the chipmaker up to “maintain a 2-step lead over its competitors.” We could talk ourselves into a recession. All this week I’ve been broadcasting from our San Francisco bureau and meeting with CEOs and execs, and the most important word I keep hearing is “hurricane.” I think JPMorgan CEO Jamie Dimon did more to frighten people into not borrowing than any public figure when said to “brace yourself” for tough times ahead caused by the Fed and the Ukraine war. Club name Microsoft (MSFT) has its price target lowered to $335 from $363 at Barclays. Lots to like, they say, but the PT cut is the only real takeaway. Barclays raises price target for Tesla (TSLA) to $370 from $325, but then reiterates a selling rating on the shares, says both margins and production will disappoint because of China. JPMorgan says that Stitch Fix (SFIX) results were much better than feared. But the online clothing styler is laying off people, 330 jobs or about 4% of its company. Is that to get ahead of because its order book is really weakening? That’s the question. Analyst drops PT to $8 from $10. The stock fell more than 15% in premarket trading. Citi cuts Signet Jewelers (SIG) price target to $76 from $94, analyst is just worried things will get tougher. Many analyst calls like this now. Unity Software (U) price target lowered to $71 from $125 at Citi … another acknowledgement that stocks in the advertising technology space are “mispriced.” Electronic Arts (EA) downgraded to hold from buy at MoffettNathanson after a 22% move in the stock … “feel like the proverbial dog that unexpectedly caught the car it was chasing.” Devon Energy (DVN), a holding for the Club, has it price target raised to $94 from $92 at Mizuho following the announced acquisition of Rim Rock for $865 million. Read why we think this use of cash by Devon makes plenty of financial and strategic sense. Even though Rent the Runway (RENT) talks about how great it is doing, the analysts are not appeased. As Barclays says, shares “remain in the sentiment doghouse.” Diamondback Energy (FANG) price target raised to $196 from $188 at Piper Sandler, keeps overweight rating on share. We like Club holding Pioneer Natural Resources (PXD) and Devon Energy (DVN) more. Uber Technologies (UBER) PT lowered to $45 from $55 at Goldman Sachs on a weaker macro environment, even as CEO Dara Khosrowshahi tells me the EXACT opposite! Goldman takes Lyft to $24 from $36. Cowen cuts numbers on Target (TGT) again … the retailer has to get through the unwanted inventory pile-up. Goldman giant internet report downgrades GoodRx (GDRX), Netflix (NFLX) and eBay (EBAY) to sell. The analysts still like Amazon (AMZN), Alphabet (GOOGL) and Meta Platforms (META). (Jim Cramer’s Charitable Trust is long AMD, AMZN, DVN, GOOGL, META, MSFT, PXD. 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 work on the floor of the New York Stock Exchange (NYSE) on May 12, 2022 in New York City. The Dow Jones Industrial Average fell in morning trading as investors continue to worry about inflation and other global issues.
Spencer Platt | Getty Images
What I am looking at June 10, 2022
- The May consumer price index report came in hotter than feared. Prices rose 8.6% year over year, the highest level since 1981, and 6% when excluding food and energy prices. Economists were looking for 8.3% for the main index and 5.9% for the core. The theme: a greater probability of a weaker macro environment.
- DocuSign (DOCU) shares plummeted 26% in the premarket after its quarterly earnings and sales came in below Wall Street estimates. I always say it doesn’t matter where a stock came from, it is where it is going to. This stock was so unnaturally high that the past trading range doesn’t matter at all in figuring out what it is worth. Shares of the electronic-signature technology company got to such heights that it isn’t realistic to look at that past value to see where the stock may rebound. Evercore ISI and downgrades to hold from buy, so does Bank of America.
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