My Top 10 Things to Watch Wednesday, July 15 1. Wholesale inflation fell 0.3% month-over-month in June, against expectations for flatness. Following yesterday’s consumer price index report, it was another weak report. The decline in gasoline prices is a major factor. Stock futures rose slightly, led by semiconductor stocks. 2. ASML rose more than 3% this morning after the Dutch chip-making equipment maker reported a sharp quarterly decline. The full-year forecast was also raised for the second time this year. The positive movement in the stock price is more a reflection of today’s market mood than it is a reflection of ASML’s business performance. It’s been great all these years. Without ASML’s extreme ultraviolet (EUV) lithography equipment, AI chips cannot be manufactured. Club name Inter is the customer. I’ll be speaking about Intel at the Investment Club’s monthly meeting tomorrow at noon ET. 3. Morgan Stanley’s top and bottom lines are strong, but not as great as they looked yesterday from rival Goldman Sachs, which we own for the club. These are great times for investment banks. IPO, M&A, bond and equity issuance. Morgan Stanley rose 3% yesterday in line with Goldman, but fell slightly this morning. 4. My power ranking of yesterday’s bank earnings (in order): Goldman, JP Morgan, Bank of America, Citigroup, and Wells Fargo. Still, Wells has done a good enough job to remain in our portfolio. Goldman, which closed at an all-time high, has a quality problem with too much demand. Barclays raised its price target on Goldman from $1,048 to $1,245. Keep your purchase rating. 5. BlackRock increased total net flows by $192 billion in the second quarter, bringing its assets under management to an impressive $15.3 trillion. Yes, a trillion. Revenue increased 31% and operating margins were at multi-year highs. Private credit exposure has been a big influence on BlackRock this year, and that’s a strong number. The stock is up 5% premarket. 6. Johnson & Johnson, the club’s name, beat and raised this morning despite a 2% drop in its stock price. Tremfya, one of the leading growth drugs, has exceeded expectations. There were weaknesses on the medical device side, especially in the field of heart disease. It’s not ideal, but I’m sure they can fix the problem. Once things calm down this quarter, it could be an opportunity to buy. 7. Will Eli Lilly’s Foundayo lose out to Novo’s Wegovy in the obesity drug race?Here are the takeaways from a Wall Street Journal article published last night. Wegovy’s weight loss ability is considered better than Foundayo (16.6% vs. 12.4% in another study). Also, people don’t seem to care about Wegovy’s food and water restrictions. Admittedly, it’s still too early for Foundayo, and its marketing efforts are just beginning. 8. Morgan Stanley lowered the PT for the club name Honeywell Aerospace from $255 to $235. Analysts said recent volatility and valuation changes call for greater selectivity. Still, we remain optimistic about aerospace and defense fundamentals heading into earnings. This is an aerospace company founded by former Honeywell CEO Dave Cote, and I would take advantage of it and buy more. 9. IBM was downgraded from buy to hold at Oppenheimer. Analysts pointed to a series of missed expectations in the company’s preliminary second-quarter announcement yesterday. As a result, stock prices plummeted 25%, making it the worst day in history. This is not the time to buy this yet. IBM is on the wrong side of corporate technology spending, away from software and toward high-demand AI hardware and memory chips, and it’s unclear when that will change. 10. According to Reuters, payments company Stripe and private equity firm Advent International jointly bid for PayPal. The companies are reportedly offering $60.50 per share, which would value PayPal at more than $53 billion. A deal with PayPal would mark the beginning of a long-awaited fintech integration. Too many companies do business with, and PayPal has long been a disappointment. It has fallen about 85% from its all-time high closing price in July 2021. Sign up for free for my Top 10 Morning Thoughts on the Markets email newsletter (See here for a complete list of Jim Cramer Charitable Trust stocks.) As a subscriber to Jim Cramer’s CNBC Investment Club, you’ll receive trade alerts before Jim makes a trade. After Jim sends a trade alert, he waits 45 minutes before buying or selling stocks in his charitable trust’s portfolio. If Jim talks about a stock on CNBC TV, he will issue a trade alert and then wait 72 hours before executing the trade. The above investment club information is subject to our Terms of Use and Privacy Policy, along with our disclaimer. No fiduciary duties or obligations exist or arise from your receipt of information provided in connection with the Investment Club. No specific results or benefits are guaranteed.
