Investing Club: What Cramer is watching Thursday — Behind the wild trading on Wall Street

Published Thu, Jan 27 20229:10 AM ESTUpdated Thu, Jan 27 20229:32 AM EST

What I am looking at January 27, 2022: Recession? That's what is causing the decline... Powell was ambiguous... a statement that is dovish; a press conference that is hawkish pleases none, but the people who are not pleased sell... five hikes –at least five hikes priced in – and that means we are back in October of 2018 world...what does Powell want?... we have to believe he wants like every Fed chief in this jam—a soft landing... but he has no wiggle room so the market is presuming that we are going to have an inverted yield curve... rates are saying that it could happen, long end lower than short end?... Fed may decide to eliminate the so-called Fed put by raising short end... Fed end game: Bears believe that "Fed put" is now gone... bulls think he wants to wait and see an end of Covid... means supply chains come back inline and prices go lower... when Fed is tightening the bulls seem like they are in fantasy world... Why does market get crushed so quickly? 900-point swing?...simple: much of what is happening is entirely being driven by machines... the machines are faster than the buyers and incredibly they will not let the "bids build".... what does that mean? If humans are selling they would wait to see if buyers emerge... the machines don't care... End of easy money equals ends of SPACs, high multiple stocks and weaker IPOs... We'll talk more on the Morning Meeting at 10:20 a.m.... Dow Inc. (DOW) ... thinks spread nat gas v oil... their time... they are coining money... If easier money is over, why not buy the anti-Cathie Wood ETF?... That's the Tuttle Capital Short Innovation ETF (SARK) ...it is up from $35 to $49 YTD since the degree of pain may be mitigated by owning that… Tesla (TSLA) beats on earnings ... wants to rationalize production, first, before new products... priority is full self driving right now....analysts better listen; good for Ford?... Tesla wants to maximize production which means no new products... Apple (AAPL) pay v. Square (SQ) (Bloomberg report ) – do you need Square anymore?... can you just use cellphone? Centene (CNC) – for sale? ... Right now at 14x, UnitedHealth (UNH) at 21. Semi-world... truth: Intel's quarter was weak... many positives for the industry on the call but little positive for Intel (INTC) as it is in a tough spot this year and probably next (much of 2023)... they were positive about the cloud and enterprise service demand as well as desktops and high-end notebooks... (not so low-end) but they're clearly losing share to AMD and ARM CPUS in cloud and to an extent notebooks itself... soaring capex and investments are really weighing on their gross margins and Intel trades on GMs... more pain to come... demand is good but not 53% year over year... tells me that there will be some data center auto and industrial (recession)... Lam Research (LRCX) can' t make all of the machines it needs to make semiconductors even as it is going full out... there was a glitch at the end of the Q that is being viewed as a real weakness call... not true... Confusion point: Advanced Micro Devices (AMD ) is now going to buy Xilinx (XLNX) ... but stock is down which is insane... Xilinx had a great Q... ServiceNow (NOW) is perfect... may be the key to this market?... are they the answer to the labor issue?... that's how CEO Bill McDermott thinks... Piper hold to buy-growth rate of sub 29%... Chevron (CVX) ...raises dividend 6%, so now 4.3% dividend—total yield on buyback—5.3%.. catbird seat... GreenSky closes at Goldman Sachs (GS) ...simple and transparent lending – CEO David Zalik (think renovating kitchen)... Stanley Black & Decker (SWK) ... restatement... reducing earnings by 36 cents, 31 cents and 27 cents prior three years — really suboptimal... McDonald's (MCD) ... report light ... but comp numbers terrific...MCD- expenses up 14% even as U.S. same store sales up 13.8%... What happened to Ukraine obsession?...Italy is against us... Hard hit stocks that are profitable screen ... down 50% that are profitable, less than 50x earnings, yielded 110 companies out of 3000... we chose smaller subset... and on air even smaller subset... we liked ten of those of 110... Corning (GLW) to buy from hold at Goldman Sachs... worked off the oversupply for solar... report says "seeing solid solar demand and Corning is restarting mothballed production capacity there to meet growing demand." McCormick (MKC) — EPS 84 cents v. 80c estimate...net sales up 11%... Abbott (ABT) ... Raymond James lowered price target to $143 from $150... Company analysis on Mad tonight... 650 new companies since beginning of last year, they are down as of last night—80%... of traditional IPOs below their offer price – 67% are below offer price; 37% are 50% below offer price…. SPAC 86% of 205 former SPACs trading below $10... (that's 176 out of 205) . 85 SPACs, or 41.5% ,are below –even if you got in on the IPOS...how many of the 650 make money? 204 actually have positive eps for 2022... some are barely positive.. 48 of 204 is 20 cents or less... 129 are at 30x 2022 eps; however—if you take away Chinese and below $500m marketcap —and when eps 23 worse than 22; and high leverage –61 names 10% are interesting... we look through 50 tonight MM... (Jim Cramer's Charitable Trust is long ABT, AMD, CVX, AAPL. 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. 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U.S. Federal Reserve Board Chairman Jerome Powell attends his re-nominations hearing of the Senate Banking, Housing and Urban Affairs Committee on Capitol Hill, in Washington, U.S., January 11, 2022.

Graeme Jennings | Reuters

What I am looking at January 27, 2022: