3 takeaways from the Investing Club’s ‘Morning Meeting’ on Friday
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 Friday’s key moments. This week’s market action reaffirmed oil as our hedge Quick mentions: AAPL, QCOM, JNJ, DHR We want an update on Cisco’s supply chain issues 1. This week’s market action reaffirmed oil as our hedge U.S. West Texas Intermediate crude futures fell on Friday after settling higher Thursday. We think Thursday’s gain could have been one reason behind the intraday reversal in the market on Thursday, which started off strongly on the heels of a positive inflation report but then gave up its gains. Also worth noting: The market seems to be overbought, perhaps after the big rally on Wednesday. The S & P 500 Short Range Oscillator, which is the Club’s most trusted indicator of when the market is due for a pullback or bounce, clocked in at 5.55% after Thursday’s session. This week’s movement in oil reaffirms our decision to keep oil as a hedge. It worked in our favor on days like Thursday, when stocks were down yet oil managed to rally. Now that oil is down and stocks are up, our other, non-oil related Club holdings are coming into play. 2. Quick mentions: AAPL, QCOM, JNJ Apple (AAPL) has told its suppliers to build at least the same number of iPhones this year as it did in 2021, according to Bloomberg . This is interesting given that demand for worldwide smartphone shipments across the industry fell 9% in the second quarter from a year earlier. While iPhone shipments were still strong, Apple supplier Foxconn recently warned that smartphone demand is waning. However, we did hear from Qualcomm (QCOM) that the slowing demand is mostly impacting lower-tier phones, while demand for premium 5G smartphones are stronger. This could mean that Apple is betting on its wealthier clientele — something to keep an eye on. Drug stocks fell on Thursday due to concerns of exposure to a lawsuit related to heartburn medication Zantac, which was removed from U.S. markets in 2020 after impurities causing cancer were detected in samples of the drug. While Club holding Johnson & Johnson (JNJ) is not named in the litigation, its stock still took a hit. However, we believe it was an overreaction . 3. We’re looking for an update from Cisco Cisco (CSCO) reports next week, and we want an update on its supply chain issues. The company reported lower-than-expected revenue in its latest quarter and called for a surprise sales decline in the following period. The company cited factory shutdowns in China as putting pressure on component supplies. We recently trimmed our position and downgraded our rating to a 2 after Arista Network (ANET) reported a surprising beat in its latest quarter last week, raising our concerns that it’s taking market share away from Cisco. We don’t know what to do about Cisco quite yet since we don’t have any visibility into its supply chain, but we’ll be looking for answers when it reports. (Jim Cramer’s Charitable Trust is long AAPL. CSCO, JNJ, QCOM. 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.
