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Jim Cramer’s top 10 things to watch in the stock market Monday


My top 10 things to watch Monday, Oct. 30

  1. We now care more about the Treasury’s funding cycle than about earnings because it is the most important determinant of the price-to-earnings multiple; When the 30-year Treasury yield was at 4%, we predicted 6%. We’re reiterating 6%, which puts stock investors like us in a box. In my Sunday column, I look at ways to break out of that box.
  2. The Dow, the S&P 500 and the Nasdaq are set for a higher open after a tough week. The Fed starts its two-day October/November meeting Tuesday. No interest rate hike is expected. Nine Club companies issue earnings this week, including Apple (AAPL) late Thursday. The government’s October jobs report is out Friday.
  3. Barclays has a hold on Apple and says it may miss estimates. We concur that this is a possibility. We want to “own it, not trade it,” which is different from “buy it, not trade it.” Apple event Monday: New Mac computers are expected.
  4. Dow stock McDonald’s (MCD) delivered better-than-expected earnings and revenue in the third quarter. EPS was $3.19 adjusted on a 14% rise in revenue to $6.69 billion. Very good. U.S. same-store sales up 8.1%, fueled by price increases. We own Starbucks (SBUX) in the quick-serve business. The coffee giant reports earnings Thursday morning. Starbucks is one of three Club stocks tied to the Chinese economy.
  5. Club name Ford (F): Severely disappointing quarterly results last week and beginning to call in to question the company’s ability to make the transition given substantive warranty issues and lack of demand for electric vehicles. Ford and Chrysler-owner Stellantis (STLA) struck tentative deals with the United Auto Workers. The union reached tentative deal with General Motors (GM) on Monday morning.
  6. Broadcom (AVGO), also a Club holding, says deal with VMware (VMW) will close “very shortly.” I doubt the ability of the company to make any assurances and “paperwork hell” seems fanciful. Deal was announced May 2022. Not a pawn. Neither China nor U.S. government seems opposed. Uphill battle.
  7. Bank of America lowers price target on Burlington Stores (BURL) to $195 per share from $240. But keeps buy rating. The analysts see near-term risk to earnings. In off-price retail, we own T.J. Maxx, Marshalls and HomeGoods parent TJX Companies (TJX), which we think is the best in show.
  8. Barclays cuts Mastercard (MA) to $265 per share from $277. Seems a little ridiculous with shares trading at $360 each. Mizuho lowers PT, too. But both research firms keep their buy-equivalent ratings on the stock.
  9. Where is Joaquin Duato, CEO of Johnson & Johnson (JNJ), and the absurdity of their strategy to file bankruptcy again regarding talc litigation with so many live cases coming together. Currently 18 jury trials for asbestos cases. The bomb that was Kenvue (KVUE).
  10. Was General Electric (GE) the best report last week? Considering strength in aerospace and the Vernova wind, yes. GE is spinning off Vernova in the beginning of the 2024 second quarter.

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