The Club’s top 10 things to watch Friday, July 21
1. Stocks are steady ahead of the Nasdaq 100’s special rebalance, but be on guard for volatility as the index addresses over-concentration by reducing its weightings in the “Magnificent Seven.” Did yesterday’s 2% decline in the Nasdaq do some of the work already? Either way, it’s not a moment to panic because any market impact from the rebalancing will be temporary.
2. American Express (AXP) delivered a second-quarter earnings beat but missed on revenue, weighing on shares in premarket trading. The credit card company said travel and entertainment spending climbed 14% year-over-year on a currency-adjusted basis, while corporate spending lagged. Spending from millennials and Gen Z was up 21% year-over-year in the U.S.
3. Morgan Stanley now projects the global obesity market will reach $77 billion in 2030, up from a previous prediction of $54 billion. Club name Eli Lilly (LLY) and Novo Nordisk (NVO) are expected to remain the industry leaders, with a combined market share of 82%, despite growing competition. Morgan Stanley raised its price target on Eli Lilly to $560 a share, up from $551.
4. The bariatric-surgery industry is facing a slowdown from the growing popularity of weight-loss drugs from companies like Eli Lilly and Novo Nordisk. Despite delivering a quarterly beat, Intuitive Surgical’s (ISRG) shares fell in early trading after it reported a slowdown at its U.S. bariatric business, a result of patients delaying procedures because of new weight-loss drugs.
5. KeyBanc raised its price target on Club holding Palo Alto Networks (PANW) to $285 a share, from $242, while maintaining an overweight weighting on the stock. The bank called the company the best positioned vendor for Secure Access Service Edge and cloud-security.
6. Oilfield services firm SLB delivered a quarterly earnings beat but missed on revenue, in line with Club name Halliburton’s (HAL) results earlier this week. Both companies demonstrated solid margins and free cash flow, with international spending strong.
7. SVB Leerink raised its price target on Club name Johnson & Johnson (JNJ) to $190 a share, from $186, on the back of the pharmaceutical giant’s strong second-quarter results Thursday.
8. Railroad company CSX is under pressure in premarket trading after reporting a second-quarter revenue miss Thursday, even as earnings were in line with Wall Street’s expectations.
9. Stifel raised its price target on Club holding Meta Platforms (META) to $336 a share, from $280, while maintaining a buy rating on the stock. Meta is set to report second-quarter earnings on July 26.
10. DA Davidson raised its price target on Club name Microsoft (MSFT) to $415 a share, from $350, on the back of its leadership around artificial intelligence. The firm maintains a buy rating on Microsoft’s shares. (See here for a full list of the stocks in Jim Cramer’s Charitable Trust.)
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