CNBC’s Jim Cramer on Thursday gave investors a list of stocks that he believes could be worthwhile additions to investors’ portfolios.
All of his picks are listed in the Nasdaq Composite. While the index is heavy with tech stocks that were hammered last year, there are still names that could perform well even in a recessionary environment, according to Cramer.
“In an index that’s been folded, spindled and mutilated, I am still feeling good about a few of these stocks,” he said.
Here are his picks:
T-Mobile
Cramer said that he expects the company to continue taking market share from competitors.
Regeneron Pharmaceuticals
“Regeneron’s got a broad pipeline with a ridiculously cheap stock. I think it’s a really, really excellent situation, especially if you’re expecting a severe recession,” he said.
PepsiCo
The beverage giant rivals Procter & Gamble when it comes to the best consumer packaged goods company in the U.S., he said, though he acknowledged that the stock’s valuation is a bit higher than he would like.
American Electric Power
Cramer said that he likes the stock because the company is well-run, and utility stocks tend to perform well during economic slowdowns.
Dollar Tree
While he does like the stock compared to other retailers listed on the Nasdaq, Cramer said that he still prefers TJX Companies.
Disclaimer: Cramer’s Charitable Trust owns shares of TJX Companies.
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Tesla CEO Elon Musk kicks off deliveries of the company’s heavy-duty truck, the Semi, at the Gigafactory in Sparks, Nevada.
Tesla Inc.
Tesla CEO Elon Musk kicked off deliveries of the company’s first few production Semi trucks on Thursday, speaking on stage at the company’s factory in Sparks, Nevada, with Dan Priestly, the company’s senior manager for Semi truck engineering.
As CNBC previously reported, Tesla set up lines and started production of the Semi outside of Reno this year at the site where it primarily makes the battery cells, drive units, and battery packs that power its cars. Musk and Tesla did not say on Thursday how many Semis it is delivering.
Tesla originally showed off the Semi design in Dec. 2017. Production got delayed by the Covid pandemic and battery cell supply issues, among other things.
During the deliveries kick-off event, Musk briefly alluded to the tumult of the past five years and quipped, “Sorry for the delay.”
He later thanked and the handed the mic to representatives from PepsiCo Frito Lay, which is Tesla’s first customer to receive and use production Semi trucks.
One major difference between Tesla’s Class 8 offering and other heavy-duty trucks is the location of the steering wheel and the driver’s seat. Rather than using the left side (or right side in Europe), Tesla designed the Semi with the steering wheel in the center of the cab with touchscreens positioned on both sides of the driver.
While the Tesla Semi was in development, other fully electric heavy-duty trucks launched into the market.
Volvo-owned Renault Trucks and Daimler haveproduced and delivered electric heavy-duty trucks to customers before Tesla Even beleaguered Nikola — whose founder was ousted and convicted of fraud in recent months — started production of a battery electric truck in March.
But Tesla boasts some high-tech features not available elsewhere, including a new, fast-charging system, and a battery with greater range than competitors. The DC fast-charging system delivers up to 1MW, and employs a water-based coolant to ensure it’s safe in delivering that power. Tesla says that the Semi can travel 500 miles on a single charge while fully loaded.
The new fast-charging tech will eventually be installed at Tesla SuperCharging stations and used to power up Cybertrucks, the consumer pickup truck Tesla is planning, Musk revealed. The company plans volume production of the sharp-edged heavy pickup at its new factory in Austin, Texas.
A return to form
The Tesla Semi event may provide relief to fans worried about his commitment to and focus on the electric vehicle business.
Musk has recently taken on new responsibilities as owner and CEO of Twitter, the social media giant, which he acquired in a leveraged buyout for $44 billion in October. He sold some of his considerable Tesla shares to finance that deal. Since taking over Twitter, he has been embroiled in multiple conflicts and controversies around that platorm.
Musk returned to form on Thursday, speaking to Tesla’s environmental mission and the company’s vehicle tech.
In the U.S., he said, there are something like 15 million passenger vehicles and around 200,000 heavy duty trucks. “It seems like a small percentage,” he said, but the semi trucks represent a large portion of harmful vehicle emissions because of their size, weight, and the fact they are driven around the clock.
Those emissions can have dastardly health effects on people who live near warehouses, ports, and other roadways with lots of trucking activity.
According to transportation and air quality research by the American Lung Association, medium- and heavy-duty vehicles (such as delivery vans, short- and long-haul trucks) represented about 6% of the on-road fleet in the U.S. as of 2020. These vehicles generate an outsized amount of pollution, including 59% of ozone and particle-forming nitrogen oxide emissions, and 26% of the greenhouse gas emissions from transportation.
Musk said that the Semi would not only help combat climate change, but “It’s also quiet, will improve the quality of your air, and will improve the health of people living near freeways.”
The same can be said of other electric, heavy-duty trucks that displace diesel trucks.
Musk and other execs did not discuss Tesla’s driver assistance systems, which are marketed as Autopilot and Full Self-Driving Capability, at the Semi deliveries event. In 2017, when Musk debuted the Semi, he touted a driverless trucking future.
Nor did they discuss how many trucks they plan to produce in the next year, nor how they will obtain the additional battery cells and raw materials to produce those.
Shares in Elon Musk’s auto business closed flat ahead of the event, at $194.70, and did not move appreciably in after-hours trading.
Coca-Cola on Tuesday raised its full-year outlook after beating Wall Street’s expectations for its quarterly earnings and revenue.
The company also provided a look toward 2023, saying that it expects inflation to keep raising its expenses and commodity prices to stay volatile. Foreign currency is also projected to weigh on Coke’s earnings and revenue. However, the company won’t provide its full outlook for next year until early 2023.
Shares of the company rose 3% in premarket trading.
Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:
Earnings per share: 69 cents adjusted vs. 64 cents expected
Revenue: $11.05 billion adjusted vs. $10.52 billion expected
The beverage giant reported third-quarter net income of $2.83 billion, or 65 cents per share, up from $2.47 billion, or 57 cents per share, a year earlier.
Excluding items, Coke earned 69 cents per share.
Adjusted net salesrose 10% to $11.05 billion, topping expectations of $10.52 billion. Organic revenue climbed 16%, fueled by higher prices across Coke’s portfolio.
Unit case volume, which strips out the impact of currency and price changes, grew 4% in the quarter. Other consumer giants, like Tide maker Procter & Gamble, have seen their volume fall as consumers feel inflation hit their wallets. Coke said it’s been trying to appeal to budget-conscious consumers through product offerings like value packs in North America.
Coke’s sparkling soft drinks segment, which includes its namesake soda, reported volume growth of 3%. Coke Zero Sugar was once again a standout, with its volume rising 11% in the quarter.
The company’s hydration, sports, coffee and tea division saw volume growth of 5%, fueled by Powerade, Bodyarmor and the expansion of Costa Coffee.
Coke’s nutrition, juice, dairy and plant-based beverages division reported flat volume for the quarter. Coke said the lackluster performance was due to declining demand for local brands in Eastern Europe.
For 2022, Coke now expects comparable earnings per share growth of 6% to 7%, up from its prior range of 5% to 6%. The company also raised its outlook for organic revenue growth to 14% to 15% from a range of 12% to 13%.
In the fourth quarter, Coke is forecasting that foreign currency will weigh on its comparable net sales by 8% and comparable earnings per share by 9%, including the impact of hedged positions.
CNBC’s Jim Cramer on Friday told investors that stocks will likely continue to do well as long as the economy holds up.
“Many companies have battened down the hatches, so to speak, and prepped for a recession. So if we don’t get a severe slowdown, they will indeed keep flying,” he said.
He also previewed next week’s slate of earnings. All earnings and revenue estimates are courtesy of FactSet.
Monday: Logitech
Q2 2023 earnings release at 9 p.m. ET; conference call on Tuesday at 8:30 a.m. ET
Projected EPS: 85 cents
Projected revenue: $1.2 billion
Cramer said the stock could take a hit because of the slowdown in the PC market.
Tuesday: Halliburton, Coca-Cola, Alphabet, Microsoft
Halliburton
Q3 2022 earnings release at 6:45 a.m. ET; conference call at 9 a.m. ET
Projected EPS: 56 cents
Projected revenue: $5.34 billion
Halliburton’s stock could soar after it reports earnings, he predicted.
Coca-Cola
Q3 2022 earnings release at 6:55 a.m. ET; conference call at 8:30 a.m. ET
Projected EPS: 64 cents
Projected revenue: $10.52 billion
Cramer said he expects the company to have a strong quarter, similar to Pepsi-Co‘s.
Alphabet
Q3 2022 earnings release at 4 p.m. ET; conference call at 5 p.m. ET
Projected EPS: $1.27
Projected revenue: $71.08 billion
The Google parent company will likely report a solid quarter due to the strength of YouTube, he predicted.
Microsoft
Q1 2023 earnings release at 4:05 p.m. ET; conference call at 5:30 p.m. ET
Projected EPS: $2.31
Projected revenue: $49.66 billion
Cramer said he expects the stock to jump after the company reports.
Wednesday: Meta, Ford
Meta
Q3 2022 earnings release at 4:05 p.m. ET; conference call at 5 p.m. ET
Projected EPS: $1.90
Projected revenue: $27.47 billion
He called himself the “only believer” of the Facebook parent company.
Ford
Q3 2022 earnings release at 4:05 p.m. ET; conference call at 5 p.m. ET
Projected EPS: 27 cents
Projected revenue; $37.46 billion
While the demand is there for Ford’s vehicles, supply isn’t, Cramer said.
Thursday: Apple, Amazon
Apple
Q4 2022 earnings release at 4:30 p.m. ET; conference call at 5 p.m. ET
Projected EPS: $1.27
Projected revenue: $88.79 billion
Cramer said he’s sticking to his mantra of “own it, don’t trade it” when it comes to Apple.
Amazon
Q3 2022 earnings release at 4 p.m. ET; conference call at 5:30 p.m. ET
Projected EPS: 22 cents
Projected revenue: $127.49 billion
Cramer said he likes the company, especially because its cloud business seems to be doing well.
Friday: Colgate-Palmolive
Q3 2022 earnings release at 7 a.m. ET; conference call at 8:30 a.m. ET
Projected EPS: 73 cents
Projected revenue; $4.47 billion
There are better consumer packaged-goods plays than Colgate, he said.
Disclaimer: Cramer’s Charitable Trust owns shares of Halliburton, Alphabet, Microsoft, Meta, Ford, Apple and Amazon.
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Click here to download Jim Cramer’s Guide to Investing at no cost to help you build long-term wealth and invest smarter.
It might be tempting to buy the dip. After all, the S & P500 has declined more than 15% since its August peak and is around 25% off its January high. But one investor cautions that now might not be the time. “It’s a bit early to go back into the market, according to our modeling and evaluation,” says John Ricciardi, head of asset allocation at Deuterium Capital. Ricciardi said he would want to see three metrics turn favorable to find “good risk-asset returns”. These are: earnings growth, falling borrowing costs, and global liquidity — and he says all three are currently missing in equity markets. Excluding the energy sector, earnings estimates for the third quarter are already down 2.6% compared to the previous three months, according to Refinitiv. With high inflation and rising interest rates, Ricciardi says stock market valuations will need to fall further before buyers return. “We’ve had about 25% off this year in global markets, and that’s the beginning of a bear market. But quite often, we’ve seen more than that before you get to a bear market bottom.” Riccardi said investors should be selling stocks in the technology, discretionary, and communication sectors because they all rely on increased consumer spending – which the Federal Reserve is trying to lower by hiking interest rates. He also said industrial output would likely see an “unexpected drop,” along with a collapse in retail sales by 8% over the next three months, both of which could drag equities lower in the near term. What should investors buy? Ricciardi said investors should reposition toward stocks sensitive to interest rates – the so-called defensive stocks – and identified companies in the consumer staples sector. Procter & Gamble , Coca Cola and Pepsi Co were among the stocks he thinks might fair well while interest rates continue to increase. Procter & Gamble has, on average, a buy rating from analysts with a price target 24% higher than the current share price, according to FactSet Estimates. However, Goldman Sachs analyst Jason English downgraded P & G to neutral on Monday on concerns over the company’s exposure to non-U.S. dollar earnings at a time of dollar strength. Ricciardi, who is also a fund manager at Deuterium, suggested Dominion Energy , NextEra and Duke Energy in the utility sector and Air Products and Sherwin-Williams in the “small corner” of the materials sector. FactSet data shows that Dominion Energy and NextEra are buy-rated by analysts, on average, with 37% and 29% upside, respectively, to their share price from current levels. Duke Energy had a hold rating, on average. Andrew Bischof from Morningstar’s equity research team was the sole analyst with a sell rating on both NextEra and Duke Energy.
Traders on the floor of the New York Stock Exchange.
Getty Images
Stock futures are lower Sunday night as the markets come out of a tumultuous week and traders look ahead to key reports coming in the next week that can offer insights into the health of the economy.
Futures connected to the Dow Jones Industrial Average slid 0.6% to 29,175 points. S&P 500 futures dropped 0.7% to 3,626.25 points, while Nasdaq 100 futures slipped 0.8% to 11,014.25 points.
Market observers generally consider the week ahead as the kickoff to earnings season, with four of the world’s largest banks – JPMorgan, Wells Fargo, Morgan Stanley and Citi – reporting Friday. PepsiCo, Delta and Domino’s are also among companies reporting next week.
Inflation will also take center stage as new monthly Consumer Price Index data comes Thursday morning.
It will follow a week of whiplash for market participants. The first half brought a relief rally that pushed the S&P 500 up more than 5% in its largest two-day gain since 2020.
But jobs data that economists say will keep the Federal Reserve on a path to continue raising interest rates and OPEC+’s decision to slash oil supply rattled investors, diluting wins later in the week. When day trading ended Friday, the S&P was up 1.5% compared to where it started the week. The Dow and Nasdaq were up 1.5% and 0.7%, respectively.
Still, the Dow, S&P 500 and Nasdaq had the first positive week in the last four. All remain down substantially so far in 2022, however, and the Nasdaq is less than 1% away from its 52-week low.
Meanwhile, the 2-year Treasury yield rose 6 basis points, closing at 4.316%. One basis point is equivalent to 0.01%.
“The direction of the stock market is likely to be lower because either the economy and corporate profits are going to slow meaningfully or the Fed is going to have to raise rates even higher and keep them higher for longer,” said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance, on Friday.
“Given the conditions that we are operating under, we believe it’s prudent to begin preparing for a recession,” he added. “The talk of a shallow recession that is now the narrative-du-jour strikes us as eerily similar to the ‘inflation is transitory’ narrative of last year.”
Last week brought heightened concerns that corporate earnings will show the ugly side of a surging dollar as Levi Strauss became the latest to cut guidance due to sliding international sales.
CNBC’s Jim Cramer on Friday warned investors against adding to their portfolios until the stock market and economy become less volatile.
“This economy is a runaway train; it’s smashed through the Fed’s blockades today, so now they may just blow up the tracks to derail the whole darn thing. When they detonate, it’ll be safe to buy. Until then, I am urging you not to be a hero,” he said.
Cramer warned that he expects central bank officials to stick to their hawkish stance on inflation, adding that the producer price index and consumer price index due next week could shed more light on the state of inflation and the Fed’s next moves.
Stocks tumbled on Friday after the September jobs report signaled that the job market is strengthening despite the central bank’s aggressive interest rate increases.
“There’s always the possibility that this is the last red-hot employment number, in which case the Fed’s tightening into an abyss and the damage could be catastrophic,” he said.
Cramer also previewed next week’s slate of earnings. All earnings and revenue estimates are courtesy of FactSet.
Wednesday: PepsiCo
Q3 2022 earnings release at 6 a.m. ET; conference call at 8:15 a.m. ET
Projected EPS: $1.84
Projected revenue: $20.81 billion
Cramer said he’s hoping the company will report that its raw costs are coming down.
Check out the companies making headlines before the bell:
Lululemon (LULU) – Lululemon rallied 9.5% in the premarket after reporting better-than-expected quarterly results and issuing an upbeat outlook. The athletic apparel and leisurewear maker said it continues to see strong sales momentum.
Broadcom (AVGO) – Broadcom rose 2% in premarket trading after quarterly earnings and revenue exceeded analyst forecasts. The chip maker also issued a stronger-than-expected revenue forecast for the current quarter. CEO Hock Tan said Broadcom expected strong demand across all its end markets to continue this quarter.
Starbucks (SBUX) – Starbucks named Laxman Narasimhan as its new chief executive officer. Narasimhan was most recently CEO of Lysol and Enfamil maker Reckitt Benckiser, and has served in executive positions at PepsiCo. Narasimhan will join Starbucks on October 1 as incoming CEO and take over for interim CEO Howard Schultz in April 2023.
Bed Bath & Beyond (BBBY) – The housewares retailer’s stock slid 5.5% in premarket trading, setting it up for a possible fourth straight negative session. Bed Bath & Beyond – popular among “meme stock” traders – unveiled a number of steps on Wednesday designed to shore up its finances.
PagerDuty (PD) – PagerDuty shares jumped 5.8% in premarket action following a better-than-expected quarterly report and strong guidance. The operations management software company saw a 7.1% increase in total paid customers compared with a year earlier and a 37.5% surge in the number of customers providing annual recurring revenue exceeding $100,000.
Shell (SHEL) – Shell CEO Ben van Beurden is preparing to step down next year, after nearly a decade in that job, according to two company sources who spoke to Reuters. The sources say the energy producer has identified four candidates to succeed van Beurden. Shell gained 1.4% in off-hours trading.
Beyond Meat (BYND) – Investment firm Baillie Gifford reported a 6.61% stake in the maker of plant-based meat alternatives as of August 31, compared with a 13.38% stake on December 31, 2021. Beyond Meat rose 1% in the premarket.
Rocket Lab USA (RKLB) – The space rocket company’s stock added 2.9% in premarket action after successfully test firing a reused Rutherford first stage engine for the first time. The Rutherford engine is a liquid propellant rocket engine designed and manufactured by Rocket Lab.
Vegetarian sausages from Beyond Meat Inc, the vegan burger maker, are shown for sale at a market in Encinitas, California, June 5, 2019.
Mike Blake | Reuters
Beyond Meat on Thursday lowered its revenue forecast for 2022 and announced it will trim its workforce by 4%, citing broader economic uncertainty.
The El Segundo, California-based company also reported a wider-than-expected loss and weak sales. Its shares fell 2% in extended trading.
Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:
Loss per share: $1.53 vs. $1.18 expected
Revenue: $147 million vs. $149.2 million expected
Net sales dropped 1.6% to $147 million. The company attributed the decline to changes in foreign exchange rates, increased discounts and sales to liquidation channels.
“We recognize progress is taking longer than we expected,” CEO Ethan Brown said in a statement, referring to the company’s push into mass market consumption with plant-based products that mimic meat.
For 2022, Beyond now expects revenue of $470 million to $520 million, down from its prior forecast of $560 million to $620 million. The company said inflation, rising interest rates and growing concerns about a recession were among the factors that drove the revised outlook.
Beyond also said it will lay off about 4% of its global workforce, which is expected to save about $8 million on an annual basis. However, the company will also spend roughly $1 million in separation costs that will impact its third-quarter results.
Beyond Meat reported a second-quarter net loss of $97.1 million, or $1.53 per share, wider than the net loss of $19.7 million, or 31 cents per share, a year earlier. The company said it spent more on ingredients and manufacturing this quarter. Moreover, its meatless Beyond Jerky, made through a joint venture with PepsiCo, weighed on profit margins for the second consecutive quarter.
U.S. grocery sales rose 2.2% in the quarter, offsetting a 2.4% decline of its restaurant business. Prior to the pandemic, restaurants accounted for more than half of its sales, but the business has struggled to bounce back.
Outside the U.S., grocery sales fell 17%, while restaurant sales increased 7%. The two international divisions generally contribute roughly equal revenue for Beyond.
Check out the companies making headlines in premarket trading.
PepsiCo – Shares of the food and beverage giant dipped in the premarket although the company reported a beat on the top and bottom lines in the recent quarter as consumers paid more for some of the company’s key brands.
General Electric – General Electric’s stock fell 3.5% despite topping estimates in its quarterly report. The company confirmed its previous full-year profit guidance range and said it sees challenges from inflation and supply chain issues.
United Parcel Services — Shares of the shipping and logistics giant gained 1.7% after beating analyst estimates on the top and bottom lines. UPS reported adjusted earnings per share of $3.05 on revenues of $24.38 billion while analysts expected $2.88 earnings per share on $23.79 billion in revenue.
3M – 3M shares were flat premarket after reporting quarterly earnings that topped estimates. The company saw revenues of $8.83 billion while analysts expected $8.74 billion in revenue.
D.R. Horton — The homebuilder stock rose 2.8% during premarket trading after beating analyst estimates in the previous quarter. D.R. Horton reported adjusted earnings of $4.03 a share on revenues of $8 billion. Analysts anticipated $3.37 adjusted earnings per share on $7.62 billion in revenue.
SeaWorld — The theme park and entertainment company’s stock surged 4.6% after Rosenblatt Securities initiated coverage with a buy and said despite pandemic headwinds the company has faired well under the vision of big investor Scott Ross.
