What Cramer is watching Friday — 2-year yield unstoppable as stocks to retest mid-June lows

Published Fri, Sep 23 20229:11 AM EDT

What I am looking at Friday, Sept. 23, 2022 The 2-year Treasury yield at 4.2% is almost impossible to believe. This is a move that is so fast that it tells me there must have been people borrowing shorter to buy this piece of paper, betting it would go back to 3%. Remember, bond yields and bond prices move in opposite directions. Incredible. Meanwhile people are focused on the U.K. and the collapse of the pound. But those interest rates in the U.K. and Europe were always kept artificially low. It's the velocity. The U.S. stock market is very oversold. Our trusted S & P Oscillator is at a minus 7. But Wall Street's so-called fear gauge, the VIX (the CBOE Volatility Index) , is only at 28. I'd like to see a bigger spike. What's the real impact: Taking out of June low or retest? As of Thursday's close, the Dow would need to lose about 188 points, the S & P 500 would have to lose over 91 points, and the Nasdaq would have to lose nearly 421 points to take out those mid-June lows, which were the bottom of the year. Most important note: Goldman Sachs' David Kostin says we should go to 15 times from 18 times earnings on the S & P 500, which would produce a market that would be under pressure for some time. Goldman cut its year-end S & P 500 target to 3,600 from 4,300. The June low for the index intraday was around 3,636. Many people are trying to find out which bank, which country is blowing up. Stay focused on the idea that the Federal Reserve is jawboning another 100 to 150 basis-point worth of rate hikes, which is why the 2-year is so the enemy of stocks. American oil benchmark West Texas Intermediate crude sinks 3% to $80 and change. That is the line in the sand where we need to start worrying about the large dividend yields. Reviewing group again. We own Coterra Energy (CTRA), Devon Energy (DVN), Pioneer Natural Resources (PXD) and Halliburton (HAL). Club holding Costco (COST): No one is even caring about the quarter, which was very good . They are selling just because the company reported Thursday after the bell. Perhaps a sell-the-news situation as the retailer, unlike any other, issues monthly same-store sales figures, which have been strong. Quarter revenue beat estimates and so did earnings per share. Lennar (LEN) acknowledged that prices are too high, and it's offering incentives. The beginning. FedEx (FDX) is in line with what the company said it would do. The increases are within the bounds of the CPI. Deutsche Bank says Club holding Qualcomm (QCOM) is underappreciated for its auto business. We couldn't agree more, and we put out a commentary Thursday on Qualcomm's auto investor day. MoffettNathanson starts Zoom Video (ZM) with a sell rating; Credit Suisse initiates ZM with a neutral (hold) rating. Darden Restaurants (DRI), parent of Olive Garden and LongHorn Steakhouse, had its price target lowered $2 to $129 by Deutsche Bank. But no downgrades after that surprisingly slow business. Perhaps because it was still positive. BMO Capital says it is time to buy Domino's Pizza (DPZ), citing improving labor dynamics. However, Citi lowers price target on DPZ to $415 per share from $475. Williams-Sonoma (WSM) started with a sell at UBS. Block (SQ) is underappreciated, says JPMorgan. But this is one of the black holes of this moment. Morgan Stanley is concerned that Advanced Micro Devices (AMD) will miss numbers, so it cut its price target to $95 per share from $102. AMD is expected to report its latest quarter in the latter part of next month. Boeing (BA) finished SEC review over allegations of misleading claims about safety risks of 737 Max jets after two crashed. Small penalty, $200 million. But China Southern orders 40 Airbus — not Boeing. (Jim Cramer's Charitable Trust is long CTRA, DVN, PXD, HAL, COST and 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.

Traders work on the floor of the New York Stock Exchange on September 21, 2022 in New York City.

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What I am looking at Friday, Sept. 23, 2022

The 2-year Treasury yield at 4.2% is almost impossible to believe. This is a move that is so fast that it tells me there must have been people borrowing shorter to buy this piece of paper, betting it would go back to 3%. Remember, bond yields and bond prices move in opposite directions. Incredible. Meanwhile people are focused on the U.K. and the collapse of the pound. But those interest rates in the U.K. and Europe were always kept artificially low. It's the velocity.