What Cramer is watching Friday — a big call on Apple, Okta beats the shorts

Published Fri, Jun 3 20229:32 AM EDT

What I am looking at June 3, 2022 Big call on Apple (AAPL): Weak App store growth in May poses risk to third-quarter estimates, says Morgan Stanley's Katy Huberty, the axe. She estimates revenue growth decelerated to 4% year over year in May, down from what she estimates to be 8% year-over-year growth in April — despite easier comparisons. Results were weaker across all regions except the United States. First App store monetization decline in two years, with only two of 10 categories showing growth. Beyond the June quarter, Huberty says App store growth could accelerate again, keeps a buy rating and a $195 price target. Still: the report is enough to bring whole Nasdaq down today. Payrolls rose 390,000 in May , better than expected as companies keep hiring. I like the number. This is the beginning of what Fed chair Jay Powell is looking for ... Lululemon (LULU) is flawless, just flawless, on earnings, sales and projections. Maybe the only apparel company worth owning right now. Citi carps that there was lower-than-expected profit margin because of higher air freight costs, but I hesitate to call that stupid because I am in a pretty good mood after yesterday's Club call which I thought went well. RH posted better-than-expected profit and sales for the quarter, but the projections are pretty negative and the worries about the economy for the wealthy post-Ukraine are pretty disconcerting ... very in keeping with Elon Musk having a "super bad feeling" about the economy. The luxury home goods company forecasts second-quarter sales down 1% to 3%, even as several key stories are opening (San Francisco, England, New York's Guesthouse.) About that Musk feeling: Tesla (TSLA) halts hiring worldwide and a 10% reduction in staff. This is just another Jamie "Hurricane" Dimon call that we are all going to have to accept will be talked about endlessly. Okta CEO Todd McKinnon got the shorts, but good because there was no degradation following a hack of its systems in March. The identity management software company's stock soared more than 15% in the premarket after it reported better-than-expected quarterly results. Identity is the most important way for the bad guys to get in and Okta's identity software is second to none. Still big losses, but Todd refuses to play the profit game. He's still going for market share and dominance and he has the cash to do it. Lots of price target cuts because the stock has come down a lot. That's why the shorts are so trapped. Didn't see anything wrong with CrowdStrike (CRWD) and am surprised the reaction, with shares down 4% in premarket trading. It was a good quarter, with the cybersecurity company posting better-than-expected results and an upbeat guide. But smaller-than-usual beat. Ridiculous but true. Micron (MU) downgraded to sell from hold at Piper Sandler. Makes sense as business for low-end computers is very weak in China and in the U.S. The question: Will anyone asterisk China today? When I had HP (HPQ) on earlier this week, CEO Enrique Lores had terrific numbers and was supply constrained, but admitted that low-end PC market was slow as the work-from-home buildout is largely completed. I have to believe that the advance yesterday was aided by the end-of-margin selling by margin clerks against managers who borrowed huge amounts of money to get long the higher growth. Barclays lowers PVH price target to $87 from $90, but keeps equal weighting. S & P Global (SPGI) price target lowered to $385 from $450 at Barclays, notes company's surprise suspension of guidance another reason why investors still hesitant to own ratings agencies. Takes Moody's (MCO) to hold from buy. Lack of issuance, which helps the Fed sell its bonds if it wants to. Coinbase (COIN) rescinds job offers and extends hiring freeze. Who are these guys? Endless Kohl's (KSS) saga. Painful. Private equity firm Sycamore and retail holding company Franchise Group make competing takeover bids, according to the Wall Street Journal. Kohl's shares rallied 7% in the premarket. New York passes bill to restrict bitcoin mining because of carbon power issues. If this hurts Nvidia (NVDA) shares, buy the stock as it is a tiny part of the operation. But anything bad on bitcoin tends to hurt the chipmaker. President Joe Biden to visit Saudi Arabia, but not the Permian. Give me a break. Deere (DE) meeting says buy the agricultural stocks ... no end in sight for demand. EPA proposes rule that will give states more power to block pipelines, coal terminals and other projects that pose a threat to lakes, rivers and streams — reversing a Trump-era rule. (Jim Cramer's Charitable Trust is long AAPL, NVDA. 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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Customers walk past a digital display of the new green color Apple iPhone 13 pro inside the Apple Store on 5th Avenue in Manhattan, in New York, March 18, 2022.

Mike Segar | Reuters

What I am looking at June 3, 2022

Big call on Apple