What Cramer is watching Wednesday — oversold market bounce; promising Alzheimer's drug

Published Wed, Sep 28 20229:08 AM EDT

What I am looking at Wednesday, Sept. 28, 2022 The 10-year Treasury yield briefly topped 4% early Wednesday for the first time in 14 years before pulling back some. The 2-year yield , which has been ripping higher, eased to about 4.15%. U.S. stock futures turned positive. The Bank of England intervened in the bond market in a move to try to stabilize the falling British pound. Bank of England saves? Exactly what? Unlimited buying of bonds. Holy cow. Our trusted S & P Oscillator at minus 12.6. That indicates extremely oversold conditions. It actually went down from Tuesday's lowest-since-early-Covid reading after the S & P 500 dipped to another bear market low. Mortgage applications decreased another 3.7% from a week earlier and are now down 84% from same week a year ago. The national average for a 30-year fixed rate mortgage is 6.52% (some say 7% but that may be next week with long-end bond yields finally budging.) That's the highest since mid-2008 in the midst of the housing crisis. Is this what the Fed wants? Mortgage rates have now DOUBLED from a year ago, which is an unprecedented increase but not one the Fed seems to dislike. There are unconfirmed rumors from parts suppliers, reported by Bloomberg, that Club holding Apple (AAPL) plans to slow production of the new iPhone 14. I want to stress that these are, indeed, unconfirmed and that I did NOT hear this when I was on the West Coast last week visiting suppliers. I want to make sure that members know that any supplier that even risks talking to the press about these matters will be cut off immediately. Is it worth it? Morgan Stanley, the authority on Apple, says these stories are more bark than bite. Shares of Apple fell roughly 3.5% in the premarket. Biogen (BIIB) shares rocketed more than 50% higher in Wednesday's premarket after a phase three trial showed promising data on its experimental Alzheimer's drug, which is being developed with Japanese partner Eisai. We're seeing multiple upgrades on Wall Street. The data will be peer reviewed and presented Nov. 29 at the Clinical Trials on Alzheimer's Congress. We think you should take profits in Biogen and roll them into Club holding Eli Lilly (LLY), which we think has similar-to-better data on its Alzheimer's drug. Lilly shares soared over 8% in the premarket. Lilly also has its new diabetes treatment that's shown to be effective in trials as an obesity drug. SpartanNash (SPTN) CEO Tony Sarsam tells me there have been more than 8,000 requests for price increases for this food wholesaler and retailer. But as I said Tuesday night on "Mad Money," Costco (COST) is beginning to demand rollbacks wherever it saw the last round of price increases if they involve, say, steel ( Weber ), resin, ( Newell Brands ), corn or cargo ships from China. Container ships are a falling knife so anyone who blames them should have to roll back prices. This also emphasizes that one of the big price increase points was the move out of China to other Asian nations and that is now calming down. I think this is a peak moment in food now. Atlantic Equities upgraded Netflix (NFLX) to overweight from neutral (buy from hold). Ad supported launch is not understood to be important, but it will be. Will it be the same for the Club holding Disney (DIS)? Citi crushes the autos with price target cuts: $78 per share from $87 for General Motors (GM); $13 from $16 for Ford (F). Oddly GM remains a buy. Club holding Ford remains a neutral (hold). The reasons include everything from supply chain mishaps to recession in Europe. Wells Fargo downgrades Lockheed Martin (LMT) to underweight from equal weight (sell from hold). Lockheed is the main maker of weapons for Ukraine, which has been fighting off a Russian invasion for seven months. Ag Committee in Congress: Russia, Ukraine and Belarus account for between 30% and 40% of fertilizer, so how can prices get even lower? Citi lowers its price target on Caterpillar (CAT) $180 per share from $195. Again on supply chain. Keeps a neutral (hold) rating. JPMorgan analyst Matt Boss says based on recent incoming call volume he sees "peak negativity" into Nike 's (NKE) quarterly print. Boss points out Nike shares down more than 40% year to date. Susquehanna is very bearish on rails from macro and predicts shortfall for Norfolk Southern (NSC), especially if labor problems persist. Downgrades NSC to neutral from positive (hold from buy), cuts price target to $218 per share from $275. Total collapse of the cyclicals? Susquehanna cuts PT on Union Pacific (UNP) $208 from $240, keeps neutral rating. Is this group falling apart? Susquehanna goes to neutral from positive on CSX (CSX) and cuts PT to $29 from $35. Barclays says the correction for Applied Materials (AMAT) shares could be deeper than expected. Is that factored in to the stock price? The note says no it is not: "sharper correction" coming. Barclays cuts price target on AMAT to $85 per share from $95, keeps equal weight (hold) rating. (Jim Cramer's Charitable Trust is long AAPL, LLY, COST, DIS and F. 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.

Jim Cramer at the NYSE, June 30,2022.

Virginia Sherwood | CNBC

What I am looking at Wednesday, Sept. 28, 2022

The 10-year Treasury yield briefly topped 4% early Wednesday for the first time in 14 years before pulling back some. The 2-year yield, which has been ripping higher, eased to about 4.15%. U.S. stock futures turned positive. The Bank of England intervened in the bond market in a move to try to stabilize the falling British pound. Bank of England saves? Exactly what? Unlimited buying of bonds. Holy cow. Our trusted S&P Oscillator at minus 12.6. That indicates extremely oversold conditions. It actually went down from Tuesday's lowest-since-early-Covid reading after the S&P 500 dipped to another bear market low.