My top 10 things to watch on Wednesday, July 31 1. Wall Street was tracking for a higher open, with Nasdaq looking especially strong one day after a rough session. The S & P 500 was also lower Tuesday, while the Dow finished higher. On the final trading day of July, the Dow is looking like the big winner for the month and Nasdaq the big loser. The S & P 500 could turn positive for July if early gains hold at the close. Federal Reserve commentary and reaction to earnings hold the keys to trading Wednesday. 2. The two-day July meeting of central bank policymakers ends at 2 p.m. ET. No interest rate change is expected. Fed Chairman Jerome Powell holds his post-meeting news conference at 2:30 p.m. ET. Investors will listen for language about how elevated rates are starting to impede economic growth. The market expects three rate cuts this year, starting in September. Hiring at U.S. companies slowed in July, according to ADP, which supports the case for Fed cuts. The government’s employment report for July is out Friday. 3. There’s a lot of misinformation about Club name Microsoft , which did not warn on Azure. The stock dropped nearly 2%. The cloud experienced a momentary downtick in what will be an uneven road that might depend on whether Microsoft can get enough computing power to make the numbers. No question about spending because customers demand it. Opposite of Alphabet CEO Sundar Pichai and his ill-advised conference. We upgraded Microsoft , which had a good quarter, to our buy-equivalent 1 rating. 4. Starbucks is getting better at retaining customers. But the funnel for the occasional user is not good. China remains a disaster . Going to smaller cities where there remains plenty of white space. The stock gained 4.5% on a better-than-feared quarter, which we were banking on when we added to our position Monday. Starbucks’ turnaround took an encouraging step forward, but it’s not out of the woods yet. 5. Advanced Micro Devices shows not that it is catching up to Nvidia but it is catching up to demand. Guides up by $500 million. Artificial intelligence demand is growing fast with so many customers wanting powerful chips. The nearly 7.5% jump in AMD shares on strong earnings validates our decision to reinvest in the stock. Despite the positive results, we lowered our price target by $10 to $200 per share to reflect the lower multiples the market is giving tech and semiconductor stocks. We reiterated our 1 rating. 6. As of Tuesday’s close, Nvidia has now lost nearly $800 billion in market cap since its mid-June peak at $3.33 trillion. The Club stock was up 7% in the premarket, recovering its loss from Tuesday. Morgan Stanley analysts named Nvidia a top pick. Nvidia is set to report earnings Aug. 28. Elsewhere in tech, Club stocks Meta Platforms reports earnings Wednesday evening. Apple and Amazon are out after Thursday’s close. 7. DuPont issued a major guide higher; led by semiconductor materials. The stock rose more than 4.5%. The green shoots turned out to be real. Water orders from China were meaningful. Club name DuPont announced in May that it will break up into three companies over the next 18 to 24 months. Our last DuPont buys were in June. Club names Eaton and Linde report earnings before Thursday and Friday’s opens, respectively. GE Healthcare can’t get around China, still. Do these guys know what they are doing? It is why we sold a lot of it Tuesday. They may be the worst when it comes to hoping for China. Blamed delayed China stimulus. The stock lost more than 3%. Overall, GEHC beat on quarterly earnings and missed on revenue. 8. It’s not clear how bad Pinterest really is. If you go over Google’s numbers, people are wondering about advertising and whether it is weak or not. I think it isn’t. Google does have subscriptions though, not just ads. Pinterest is just ad-supported and expectations got ahead of themselves. Pinterest shares fell 9.5%. 9. Boeing reported a wider-than-expected quarterly loss and weaker revenue. Despite the struggles, the stock rose 1%. The aircraft maker said it hired aerospace industry veteran Robert “Kelly” Ortberg to become its next CEO. Ortberg is coming out of retirement and will start Aug. 8. 10. U.S. oil prices on Wednesday jumped 3% after Hamas’ political leader was killed in Iran. The assassination renewed fears of a regional war in the Mideast. Iran blames Israel and promises payback. No comment from Israel on this. Despite Wednesday’s gains, West Texas Intermediate crude was tracking to be sharply lower for the month of July. Sign up for my Top 10 Morning Thoughts on the Market email newsletter for free (See here for a full list of the stocks at Jim Cramer’s Charitable Trust.) 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Microsoft Chairman and Chief Executive Officer Satya Nadella speaks during the Microsoft Build opening keynote at the Seattle Convention Center Summit Building in Seattle, Washington on May 21, 2024.
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My top 10 things to watch on Wednesday, July 31
1. Wall Street was tracking for a higher open, with Nasdaq looking especially strong one day after a rough session. The S&P 500 was also lower Tuesday, while the Dow finished higher. On the final trading day of July, the Dow is looking like the big winner for the month and Nasdaq the big loser. The S&P 500 could turn positive for July if early gains hold at the close. Federal Reserve commentary and reaction to earnings hold the keys to trading Wednesday.
2. The two-day July meeting of central bank policymakers ends at 2 p.m. ET. No interest rate change is expected. Fed Chairman Jerome Powell holds his post-meeting news conference at 2:30 p.m. ET. Investors will listen for language about how elevated rates are starting to impede economic growth. The market expects three rate cuts this year, starting in September. Hiring at U.S. companies slowed in July, according to ADP, which supports the case for Fed cuts. The government’s employment report for July is out Friday.
3. There’s a lot of misinformation about Club name Microsoft, which did not warn on Azure. The stock dropped nearly 2%. The cloud experienced a momentary downtick in what will be an uneven road that might depend on whether Microsoft can get enough computing power to make the numbers. No question about spending because customers demand it. Opposite of Alphabet CEO Sundar Pichai and his ill-advised conference. We upgraded Microsoft, which had a good quarter, to our buy-equivalent 1 rating.
