New Wall Street research on 3 stocks leans into the reasons we own each of them
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 Tuesday’s key moments. 1. Wall Street was modestly lower Tuesday, with the S & P 500 and Nasdaq slipping from their record-high closes to start the week. Investors are digesting the latest updates on trade and the economy. Treasury Secretary Scott Bessent told CNBC on Tuesday that U.S.-China trade talks have “become more and more productive,” expressing confidence that a deal is close. On the data side, the greater-than-expected August retail sales increase did not change expectations for the Federal Reserve to cut interest rates by 25 basis points on Wednesday afternoon, at the conclusion of its two-day September monetary policy meeting. The market odds for a total of 75 basis points of Fed easing by the end of the year are still high, according to CME FedWatch tool. 2. Amazon got a price target boost over at Truist to $270 per share, up from $250. Analysts examined credit card data through Sept. 6, which showed Amazon’s North American revenue tracking $1 billion ahead of consensus estimates. “It’s good to see the quarter is tracking above plan per the data,” said Jeff Marks, director of portfolio analysis for the Club. The stock experienced a post-earnings drop of 8% on Aug. 1 after the company’s operating income outlook fell short of estimates. At the time, we put it down to Amazon’s history of conservative forecasts. “You have to remember that it’s such a big company,” Jeff said, pointing to its many divisions, including retail, cloud computing, and advertising. “It’s hard to estimate what a quarterly revenue would be. So, they usually provide, in my view, a conservative outlook,” Jeff added. “Based on what Truist is saying today, it looks like that outlook will once again be conservative.” 3. The biggest banks are winning in this economic environment, according to noted Wells Fargo analyst Mike Mayo, who raised his price target on Club name Goldman Sachs to $855 from $785. Mayo said the capital markets business is benefiting from pent-up demand driven by big backlogs, accelerated activity in mergers and acquisitions, and profitability. Back in January, we rotated out of Morgan Stanley and into Goldman Sachs for more exposure in capital markets and investment banking. “Morgan Stanley still has a big capital markets business. But that wealth management franchise makes it so capital markets is a greater percentage of revenue for Goldman Sachs. It’s been a good swap because Goldman has been one of the best bank stocks this year, if not the best,” said Jeff. 4 . Club holding Microsoft announced a 10% increase to its quarterly dividend late Monday. According to Morgan Stanley, the boost was in line with the company’s five-year average. While pointing out that Microsoft’s dividend yield remains small, the analysts did say the software and cloud giant has over $55 billion remaining in its current share repurchase authorization. The analysts also noted that the dividend, combined with teens-level earnings per share growth, argues for a strong total return profile. (Jim Cramer’s Charitable Trust is long AMZN, GS, MSFT. 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.
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