4 takeaways from the Investing Club's 'Morning Meeting' on Monday

Published Mon, Jul 18 20221:13 PM EDT

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 Monday's key moments. 1. The market's top performers and underperformers 2. Bank earnings reflect strong consumer 3. Oil making a comeback 4. Quick mentions: NVDA, GOOGL, DIS 1. The market's top performers and underperformers Investors are anxiously awaiting earnings reports this week from a slew of big companies, including International Business Machines (IBM), Netflix (NFLX), Tesla (TSLA) and AT & T (T), as well as Investing Club holdings Halliburton (HAL) and Johnson & Johnson (JNJ), which will both roll in Tuesday before the opening bell. Stocks were down last week but finished on an encouraging note with Friday's positive retail sales data, wrinkling out some investor concerns that came from June's hot CPI report last Wednesday. While the market estimates a 75-basis point rate hike in July, it's less clear what the Fed's decision could be come September. Jim Cramer has been saying that inflation has reached its peak. The 10-year Treasury yield fell 17 basis points to 2.93%, but the 2-year Treasury was steady at 3.12%, resulting in an evident inversion of the nominal yield curve. An inverted yield curve means short-term debt securities have higher yields than long-term debt securities. Historically, inverted yield curves have preceded recessions, because they tend to come with Federal Reserve rate hikes that reduce growth. The S & P 500 was down 2.9% last week. Of the 63 industries in the S & P 500, the best performing industry was airlines, while the largest underperformer last week was energy. In the past 30 days, the S & P 500 is down 5.8% with consumer staples and healthcare being the best performers during that period. 2. Bank earnings reflect strong consumer Goldman Sachs (GS), Bank of America (BAC) and Charles Schwab (SCHW) reported their second quarter earnings this morning before the bell. Last week, Club holding Morgan Stanley (MS) reported misses on sales and profits, while Wells Fargo (WFC) reported a much better quarter than feared and Citigroup (C) posted a 25% increase in revenue. Bank of America's reported a 32% drop in earnings from last year's $9.2 billion. One of the bank's highest expenses was its provision for credit losses (PCL) of $523 million. PCL is money the bank earmarks because it believes consumers may become delinquent or default on loan payments. Despite the consumer's creditworthiness in question, the bank highlighted consumer resiliency. "Our U.S. consumer clients remained resilient with continued strong deposit balances and spending levels," said Bank of America Chair and CEO Brian Moynihan in the bank's earnings statement. Goldman Sachs (GS) and Charles Schwab (SCHW) delivered strong second quarter earnings. Wells Fargo, which reported earnings on Friday, rallied 6% on Monday. Jeff Marks, the Club's director of portfolio analysis, said we like the bank since it raised its full-year net interest income guidance to up 20% year-over-year and maintained its full year expense outlook of $51.5 billion. "I do see the market rewarding the banks basically on the idea that things are not so bad," Cramer added. Bottom line: While stocks have been reflecting market negativity overall, we are seeing strong bank numbers amid a Fed tightening cycle and a strong consumer. 3. Oil making a comeback WTI crude oil is up more than 4% on Monday, rising past $100 to $101.24, after a 20% pullback in commodity prices in July. We will get a good read on the energy sector once we see second quarter earnings from Club stock, and North American player, Halliburton on Tuesday. Other Club oil holdings we're closely monitoring are Coterra (CTRA) and Pioneer (PXD). "The way I want to view the oils is this time they spiked, if they spike again, we will take some off," Cramer said. The Investing Club's philosophy is: we don't want to be greedy. 4. Quick mentions: NVDA, GOOGL, DIS We are starting to think that Nvidia (NVDA) could be making a comeback. It is one of the top performers in the Investing Club's portfolio today, up 4.4%. Are we at the end of an era when a stock rallies after it splits? It's quite possible because Alphabet (GOOGL) completed its stock split today and the stock is staying steady at roughly $112 per share. Our read: the market is getting more rational since the stock isn't rallying — and that's a good thing. On Friday, Disney (DIS) raised its subscription fee on its sports streaming service ESPN+ to $9.99 per month from $6.99. "I think DIS is the cheapest stock in our portfolio," Jim said. Disney shares are down 37% year to date. (Jim Cramer's Charitable Trust is long HAL, JNJ, WFC, CTRA, PXD, NVDA, GOOGL, DIS. See here for a full list of the stocks.) 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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 Monday's key moments.

1. The market's top performers and underperformers

2. Bank earnings reflect strong consumer

3. Oil making a comeback

4. Quick mentions: NVDA, GOOGL, DIS