What Cramer is watching Friday — Starbucks soars on China hope, jobs growth still strong

Published Fri, Nov 4 20229:47 AM EDT

What I am looking at Friday, Nov. 4, 2022 The "old economy" is on fire and it's going to be hard for the Federal Reserve to cool it down. October jobs growth: 261,000 versus 205,000 expected. Strong labor market except for Silicon Valley, where we're seeing hirings freezes ( Qualcomm and Amazon ) and layoffs (fintech Stripe and planned cuts at Twitter). The Fed has more work to do. China appears to be breaking the ice on zero-Covid. Foreigners there to get BioNTech (BNTX)- Pfizer (PFE) mRNA vaccine. U.S. stocks higher Friday morning, and so are bond yields, with 2-year Treasury yield hitting new 15-year high of 4.88%. Oil prices surge 4% to over $90 per barrel. Club holding Starbucks (SBUX) CFO tells CNBC when rolling Covid mobility restrictions get lifted, the company's business gets a lift; also says trying to build out in China for when it fully reopens, and demand normalizes. The stock rise 6%. Price target bumps higher at Wedbush, City and Evercore ISI. After the bell Thursday, solid quarter and good guidance. Starbucks will emerge was No. 1 Western consumer brand in China. healthy growth in our North American business; mobile order and pay up 26% in fiscal Q4. Reiterated intention to return roughly $20 billion to shareholders in the next three years. Club holding Apple (AAPL) to join with layoffs? Who wouldn't? The false conundrum of layoffs now. Club holding Coterra Energy (CTRA): In Q3, nearly 500% year-on-year revenue growth to $2.52 billion. Beat on quarterly EPS, too. Making tons of cash. Returns 74% of free cash flow to shareholders. Coterra hikes fixed-plus-variable dividend payout on a sequential basis. DoorDash (DASH) jumps 12% on Friday, one day after releasing better-than-expected quarter. Resilience of demand multiple new verticals. Post-pandemic winner but macro headwinds. Most resilient category: Food spend only twice down in 60 years. Expedia (EXPE) better than expected quarter; is down huge so this is a comeback move. 25% lodging increase in Q3. Airbnb (ABNB) had better growth; demand improved; resumed buyback. Block (SQ): Better than expected quarter, with big short position. The stock, though way down year-to-date, jumps 11%. PayPal (PYPL) slowing growth? Total payment volume (TPV) miss, the analysts are just plain confused. The stock down more than 3.5%. JPMorgan raises price target on Coinbase (COIN), while saying negative things, which tends to be a sure sign of a bottom. Volumes suffer but resilient. Transaction revenue declined 44% but subscription and services revenues grew 43%. Twilio (TWLO) three downgrades and two PT cut. Cowen downgrades, sees acute pressure from worsening macro; management pulled 30% growth target. The stock sinks 24%. Atlassian (TEAM) disaster: shares lose 24% on Friday. Software maker downgraded to hold from busy Piper Sandler. Choosing to invest in the business. Macro headwinds. Weakness in cloud-loyalty discounts. Slowing growth in new customers—The results came as a bit of a shock. Mizuho frankly thought we would never see from a high performing company "shockingly weak." Warner Bros Discovery (WBD): $2.5 billion in cash, $50 billion in gross debt. Synergy target $3.5 billion. Direct-to-consumer subscribers 94.9 million, plus 2.8 million net adds. CEO David Zaslav says the age of content is back. Reported free cash flow negative $192 million. Goldman Sachs upgrades Restaurant Brands (QSR) to hold from sell. Improving trends at Tim Hortons. Burger king early stages of reinvestment turnaround. Carvana (CVNA): Cars ended the quarter at their most unaffordable point ever, a lot of headwinds, says Wedbush. "Tough quarter worse outlook." Volumes to be lower sequentially. The stock dives 14%. Funko (FNKO): The fun is over. Over inventoried. The stock plunges more than 55% on Friday. DraftKings (DKNG) shares sink 15%. Not clear if a recession would impact. GoPro (GPRO): Really bad quarter. Multiple downgrades. Gross margin under long term by 500 basis points. Too many in the channel. The beleaguered stock sinks 5%. (Jim Cramer's Charitable Trust is long QCOM, AMZN, AAPL, SBUX and CTRA. 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.

general view of a Starbucks store on September 15, 2022 in Plainview, New York

Bruce Bennett | Getty Images News | Getty Images

What I am looking at Friday, Nov. 4, 2022

The "old economy" is on fire and it's going to be hard for the Federal Reserve to cool it down. October jobs growth: 261,000 versus 205,000 expected. Strong labor market except for Silicon Valley, where we're seeing hirings freezes (Qualcomm and Amazon) and layoffs (fintech Stripe and planned cuts at Twitter). The Fed has more work to do. China appears to be breaking the ice on zero-Covid. Foreigners there to get BioNTech (BNTX)-Pfizer (PFE) mRNA vaccine. U.S. stocks higher Friday morning, and so are bond yields, with 2-year Treasury yield hitting new 15-year high of 4.88%. Oil prices surge 4% to over $90 per barrel.
Club holding Starbucks (SBUX) CFO tells CNBC when rolling Covid mobility restrictions get lifted, the company's business gets a lift; also says trying to build out in China for when it fully reopens, and demand normalizes. The stock rise 6%. Price target bumps higher at Wedbush, City and Evercore ISI. After the bell Thursday, solid quarter and good guidance. Starbucks will emerge was No. 1 Western consumer brand in China. healthy growth in our North American business; mobile order and pay up 26% in fiscal Q4. Reiterated intention to return roughly $20 billion to shareholders in the next three years.