What Cramer is looking at Tuesday — Fed rate watch, 2-year Treasury yield surge, Ford warning

Published Tue, Sep 20 20228:57 AM EDTUpdated Wed, Sep 21 20229:02 AM EDT

What I am looking at Tuesday, Sept. 20, 2022 U.S. stock futures were up Tuesday until the 2-year Treasury yield kept up its relentless run to 4%. It reached a new 15-year high at 3.977%. Federal Reserve Chairman Jerome Powell and company begin their two-day September meeting Tuesday, with the market expecting a 75-basis-point interest rate hike for the third meeting in a row. Housing starts too high but permits lower. Club holding Ford (F): No end yet to inflation and supplies of nameplates caused the shortfall. The parts are on the most expensive trucks. Still no let-up in costs. Inflation remains everywhere. Ford saw $1 billion increase in supply chain costs in its current quarter. Shares sank nearly 4% in the premarket. Morgan Stanley upgrades Club name Humana (HUM) to overweight from equal weight (buy from hold). Last year, Humana promised to fix its Medicare Advantage program, and they did so. There is a lot of upside. RBC likes it, too. KeyBanc starts Club holding Pioneer Natural Resources (PXD) with an overweight (buy) rating. PXD has huge 10% dividend yield. Very good balance sheet. Barclays downgrades Nike (NKE) to equal weight from overweight (hold from buy). U.S. will not be able to subsidize China's slowdown anymore. The Dow stock was up nicely Monday and set to give more of it back when Tuesday's session opens. Dutch Bros. (BROS): CEO tells me business is getting better and expansion on track. Some moderation in costs, but the opportunity to grow is good, and there is now a more ample supply of workers. They say turnover is under control among managers. Had previously feared job hopping. Bank of America downgrades building supplier Louisiana-Pacific (LPX) to underperform from neutral (sell from hold). BofA takes timber company Weyerhaeuser (WY) to neutral (hold) from buy. Counter to Monday's call from KeyBanc about buying the homebuilders. Etsy (ETSY) started with a neutral (hold) at BofA. This one is almost always started with a buy. Are the analysts at last getting more cautious? Autozone (AZO): a play on older cars. Lots of raised numbers on Wall Street after Monday's strong quarter. Ziff Davis (ZD): Evercore likes it, starts it with an outperform (buy) rating. This is a very, very cheap stock. CEO Vivek Shah is a great manager. Digital media play. Susquehanna downgrades PayPal (PYPL) to neutral from positive (hold from buy), says that Braintree division is doing very well and that is lowering gross margins. "Creating negative leverage from mix" is how the analysts there put it. Citi cuts price target on Dow Inc. (DOW) to $49 per share from $56 due to pricing. Chemicals continue to be under pressure. Watch this one: The dividend yield of nearly 6% does not seem to be protecting the downside. Bernstein cuts price target on HP Inc. (HPQ) to $30 per share from $40. It's really bad, analyst Toni Toni Sacconaghi says, because the declines are in printing supplies, the best margin, 100-basis-point hit and 18 cent annual headwind. Deutsche Bank takes Western Digital (WDC) to hold from buy. Who would be recommending this thing? Pricing has been terrible for ages and demand is deteriorating. Truist takes Norwegian Cruise Line (NCLH) to buy from hold; raises Carnival (CCL) price-target to $10 per share from $8. Chamath Palihapitiya returns $1.15 billion Hedosophia IV (IPOD) and $460 million from Hedosophia VI (IPOF). Goldman Sachs (GS) cuts 25 bankers in Asia. There will be plenty of bankers. But this will help Powell's cause. Remember he wants to cause job loss. He can't get "there" unless he does. (Jim Cramer's Charitable Trust is long F, HUM and PXD. 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.

The Marriner S. Eccles Federal Reserve building in Washington, D.C., on Tuesday, Aug. 23, 2022.

Graeme Sloan | Bloomberg | Getty Images

What I am looking at Tuesday, Sept. 20, 2022

U.S. stock futures were up Tuesday until the 2-year Treasury yield kept up its relentless run to 4%. It reached a new 15-year high at 3.977%. Federal Reserve Chairman Jerome Powell and company begin their two-day September meeting Tuesday, with the market expecting a 75-basis-point interest rate hike for the third meeting in a row. Housing starts too high but permits lower.
Club holding Ford (F): No end yet to inflation and supplies of nameplates caused the shortfall. The parts are on the most expensive trucks. Still no let-up in costs. Inflation remains everywhere. Ford saw $1 billion increase in supply chain costs in its current quarter. Shares sank nearly 4% in the premarket.