Takeaways from the CNBC Investing Club’s “Morning Meeting” on Monday, as Jim Cramer discusses the latest market moves and his thoughts on the midterm elections.
Every weekday the CNBC Investing Club with Jim Cramer holds a “Morning Meeting” livestream at 10:20 a.m. ET. Here’s a recap of Monday’s key moments: Dow is higher to start the week Midterm elections in focus Apple production woes, Costco downgrade 1. Dow is higher to start the week The Dow Jones Industrial Average was solidly in the green Monday, adding more than 200 points, or 0.75%. The S & P 500 was higher by roughly 0.4%, while the tech-heavy Nasdaq underperformed and swung slightly lower and higher along the flat line. The index-level moves Monday reflect the different fates for industrial and tech stocks as of late. “Anything in the Nasdaq versus anything in the industrials, for instance, the industrials remain very strong,” Jim Cramer said. 2. Midterm elections in focus In addition to October inflation data due out Thursday, this week Wall Street is paying close attention to the midterm elections Tuesday. While there’s some belief stocks would rally if Republicans win control of the House and Senate, it’s also important to consider the broader history. Regardless of outcome, markets have been higher from Election Day to June 30 of the following year in every midterm cycle since 1939, according to Virtus Investment Partners. Jim said he believes oil stocks — especially Club holdings Pioneer Natural Resources (PXD) and Halliburton (HAL) — could perform especially well in the event of a GOP sweep. Bank stocks, such as Club name Wells Fargo (WFC), may also do well in that scenario, he added. However, with Wells Fargo now our largest position — on its outperformance this year and not that we’ve been buying more — we may be looking to trim some back into that potential strength. 3. Apple production woes, Costco downgrade There’s headlines involving some other Club stocks, namely Apple (AAPL) and Costco Wholesale (COST). Apple warned over the weekend that it’s slowed iPhone 14 production at its assembly plant Zhengzhou, China. However, Jim stressed, the reason is government-imposed Covid restrictions, not because there’s weak demand for the latest smartphone model, particularly the iPhone 14 Pro and iPhone 14 Pro Max versions. Ultimately, we think think the situation could lead to some sales being pushed out a few weeks. We don’t think the production challenges will lead to demand destruction. Wells Fargo downgraded Costco on Monday to the equivalent of hold from buy, while reducing the bank’s price target to $490 per share from $600. In general, the analyst behind the note argued that Costco shares are too richly valued when considering potential “hurdles” ahead such as slowing same-store sales growth and “the lapping of outsized traffic gains in gas.” This is a rare downgrade. While we understand the stock carries a premium multiple, we also happen to think Costco is among the most dependable retailers there is no matter the economic climate. Jim said he continues to believe Costco is worth buying. (Jim Cramer’s Charitable Trust is long PXD, HAL, WFC, AAPL, COST . 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.
Jim Cramer at the NYSE, June 30, 2022.
Virginia Sherwood | CNBC
Every weekday the CNBC Investing Club with Jim Cramer holds a “Morning Meeting” livestream at 10:20 a.m. ET. Here’s a recap of Monday’s key moments:
