My top 10 things to watch Tuesday, Jan. 31
1. Will the outperformance of speculative stocks continue? The market's worst performers of 2022 —including crypto, SPACs and cloud software stocks — are some of the biggest winners in this year's rally. Stay away. As I wrote Sunday, I see this as a moment to rotate into mature stocks that are aligned with the so-called old, or real, economy.
2. You'll find many of these real economy stocks, or workhorses, in the Dow. We took a look at its 30 members to show how they match up with the names we own in the Trust.
3. UBS says iPhone sell-through, or sales to end users, was down 12% in the fourth quarter of 2022 as a result of supply chain disruptions; it maintained a buy rating on Apple (AAPL). Let's figure that's now consensus, which would place the stock at about $130.
4. Apple is one of 9 Club stocks that report quarterly earnings this Thursday. The list includes industrial conglomerate Honeywell International (HON), Starbucks (SBUX) and tech giant Alphabet (GOOGL). These reports and conference calls should provide great intel on the state of the U.S. economy. Here's our breakdown of Thursday's schedule, including analysts' estimates for earnings-per-share and revenue.
5. McDonald's (MCD) posted really great numbers — topping earnings and revenue estimates. But the market doesn't like it, which is stupid. Share fell more than 1% in the premarket.
6. Johnson & Johnson (JNJ) won't be able to use the bankruptcy trick to offload tens of thousands of lawsuits over its talc products. A U.S. appeals court ruled the health-care conglomerate improperly placed a subsidiary in Chapter 11 even though it is not in financial distress. Remains a mess. The company has already paid $3 billion.
7. Humira's days as the best-selling drug end today as Amgen (AMGN) starts selling a near identical biologic. AbbVie (ABBV), which makes the injectable treatment for rheumatoid arthritis, expects 45% drop in sales in 2023. That's mostly priced into the stock, which sells at a low multiple.
8. Caterpillar (CAT) sales rose 20% in the fourth quarter of 2022 on strong demand for its construction equipment. This is really a great quarter, but stock is being treated badly by market.
9. Deutsche Bank sees improving leadership and efficiency at Disney (DIS). New CEO Robert Iger will use his own plan, will integrate Hulu better.
10. The amazing decline in natural gas is something to celebrate as it is used in many things. Prices fell to the lowest level in nearly two years on Monday, thanks to an unseasonably warm winter.
(See here for a full list of the stocks in Jim Cramer's Charitable Trust.)
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