My Top 10 Things to Watch for on Wednesday, August 14 1. Wall Street is expecting a slightly higher open after inflation essentially in line with consumer price inflation didn’t give investors enough reason to pile into stocks as they did on Tuesday’s cooler producer price data. Following the release of the CPI on Wednesday morning, market odds moved back toward a quarter-percentage-point Fed rate cut next month. On Wednesday at 12:00 p.m. ET, we’ll hold our monthly meeting for Investing Club subscribers, where we’ll discuss the latest from Wall Street and evaluate some of the club’s equity portfolio. 2. July’s CPI increase of 0.2% month over month was in line with estimates, while its 2.9% year over year gain was slightly less than expected. That’s the lowest annual rate since March 2021. Excluding food and energy, monthly and annual increases in the core consumer price index were in line with economists’ forecasts. Stubborn home inflation came in higher than in June. 3. The Justice Department is reviewing whether breaking up Alphabet’s Google would be an appropriate legal remedy after a judge found the tech giant built an illegal monopoly in the online search market, Bloomberg News reported. Although the appeal process is still in its early stages and other options are on the table, I’ve been saying for years that Google’s valuation is very strong for shareholders when considering the totality of its parts. 4. Private candy maker Mars is buying Kellanova, the owner of Cheeze-It and other food brands, for nearly $36 billion in cash. The company values Kellanova, which was spun off from cereal maker WK Kellogg last year, at $83.50 per share. Mars gains access to crackers and energy bars through the deal. Kellanova shares rose over 7% on Wednesday and are now just a few dollars below the purchase price. 5. More Wall Street analysts upgraded club stock Starbucks after the coffee chain made a surprise hire of Chipotle CEO Brian Niccol to replace Laxman Narasimhan on Tuesday, sending the stock soaring 24.5%. In addition to three upgrades early Tuesday, Deutsche Bank, Stifel and others followed later. Deutsche Bank argued that investors will be willing to look past Starbucks’ weak near-term fundamentals to give Niccol time to develop a multi-year recovery strategy. We raised our price target on Starbucks on Tuesday from $90 to $100 per share. 6. Baird and Evercore ISI cut their price targets on Chipotle following Niccol’s departure, with analysts at both firms lamenting the loss of the highly respected executive. Baird rose to $62 per share from $74, while Evercore rose to $59 from $65. Both maintained their buy ratings on the stock, which fell 7.5% in Tuesday’s session. On the other hand, Wedbush upgraded Chipotle to outperform, arguing that the burrito chain remains in good hands and positioned to gain market share in the second half of the year despite a tough economic environment for restaurants. 7. Mortgage refinance applications rose 35% last week compared to the previous week as homeowners sought to capitalize on interest rates that had reached their lowest levels in over a year. With us already looking ahead to a Fed rate cut next month, this increase in refinances shows how beneficial lower interest rates will be for consumers. Meanwhile, mortgage applications to buy a home rose 3% week over week but were still 8% lower compared to the same period last year. 8. Elliott Management, the activist investor group with a large Starbucks stake, is launching a battle for 10 seats on Southwest’s 15-member board. Elliott has targeted the airline, whose stock price has lagged behind rivals. Southwest said it tried unsuccessfully to work with Elliott. 9. Intel sold its 1.18 million share stake in chip designer Arm Holdings, sending its stock price up more than 2.5% in the process. The sale of Arm shares, valued at $147 million, comes as Intel seeks to cut $10 billion in costs as part of a restructuring plan that includes plans for 15,000 layoffs. 10. Palo Alto Networks club name managed to raise its price target again ahead of its quarterly report next week. Citigroup raised its price target to $385 per share from $345, saying its industry checks were respectable in the quarter. In recent days, Stifel and Barclays also raised their price targets on the cybersecurity provider. Sign up for my free Top 10 Morning Thoughts on the Market email newsletter (see a full list of Jim Cramer’s Charitable Trust stocks here). As a subscriber to CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after he issues a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has discussed a stock on TV on CNBC, he waits 72 hours after the trade alert is issued before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, AS WELL AS OUR DISCLAIMER. NO FIDUCIARY OBLIGATION OR DUTY EXISTS AND WILL NOT BE CREATED BY RECEIVING INFORMATION RELATED TO THE INVESTING CLUB. NO PARTICULAR RESULT OR PROFIT IS GUARANTEED.
My top 10 things to see on Wednesday, August 14
1. Wall Street is expecting a slightly higher open after inflation that was essentially in line with consumer price trends didn’t give investors enough reason to invest in stocks as they did with Tuesday’s cooler producer price data. Following Wednesday morning’s CPI release, market odds were again tilted toward a quarter-percentage-point Fed rate cut next month. At noon ET on Wednesday, we’ll hold our monthly meeting for Investing Club subscribers, where we’ll discuss the latest developments on Wall Street and evaluate some of the club’s equity portfolio.
2. July’s 0.2% month-on-month rise in the consumer price index was in line with estimates, while the 2.9% year-on-year increase was slightly lower than expected. That’s the lowest annual rate since March 2021. Excluding food and energy, monthly and annual increases in core CPI were in line with economists’ forecasts. Inflation in tough housing costs was above June’s reading.
3. The Ministry of Justice is examining whether the splitting of the club name alphabetAcquiring Google would be an appropriate remedy after a judge found that the tech giant had built an illegal monopoly in the online search market, Bloomberg News reported. Although the remedy process is still in its early stages and other options are on the table, I have been saying for years that Google’s overall valuation for shareholders is very strong.
