My top 10 things to watch Friday, March 24
1. The Dow, the S&P 500 and the Nasdaq are set to open sharply lower Friday after a slide in Deutsche Bank (DB) shares raises new concerns about financial institutions in Europe. Investors have been selling bank stocks overseas and in the U.S. off-and-on for two weeks since the failure of Silicon Valley Bank in California and later Signature Bank in New York.
2. Is Deutsche Bank a self-inflicted wound? Do shareholders fear another blowup like Credit Suisse? As is typical, the cost of default insurance spikes. How much of it is insurance and how much of it is an attempt to create a run on other securities of the bank, if not depositors, creating a liquidity crisis? The flight from stocks to bonds pushes Treasury yields lower. This week's Fed interest rate hike is also in the mix.
3. U.K. antitrust regulators said Friday they believe Microsoft's (MSFT) proposed takeover of Activision Blizzard (ATVI) no longer presents a substantial lessening of competition in the console gaming market. ATVI shares jump more than 5% to $84 each, moving closer to the $95-per-share offer price. Microsoft is a Club holding.
4. The TikTok hearing on Capitol Hill looked at the collective risk to the U.S. from the Chinese-owned app. The U.S. wants ByteDance to sell TikTok or face a ban here. Any further limitation of TikTok in the U.S. would benefit Facebook-parent and Club stock Meta Platforms (META). However, such action could also motivate some 150 million American youth people to vote against representatives.
5. JPMorgan likes enterprise software giant Oracle (ORCL) here and says demand is somewhat stable. Good client base. I like the callout to Club holding Nvidia (NVDA) the other day.
6. Block (SQ): How much is damaging? How much is not? Shares of the Jack Dorsey company formerly called Square continue lower after Thursday's nearly 15% decline. Responding to the Hindenburg Research short report, Block denies the Hindenburg allegations and plans to explore legal action over "factually inaccurate and misleading" information.
7. Citi opens a catalyst watch on Lululemon (LULU) ahead of the company's fiscal fourth-quarter earnings next week. It is pretty clear to me that we could have some upside here.
8. Accenture (ACN) fiscal second-quarter earnings and revenue upside (many had expected a downside) coupled with the announcement of cuts of 19,000, or 2.5%, of its workforce is driving it.
9. Barclays raises KB Home (KBH) to $51 per share from $42. How can this be happening if a tightening cycle is almost over and QT is in full force?
10. Coinbase (COIN): What hurts it doesn't kill it. It makes it more loved. Though, shares are down again. Building on Thursday's 14% decline after the crypto exchange said it received a Wells Notice, a warning by the SEC of potential securities charges.
(Jim Cramer's Charitable Trust is long MSFT, META, NVDA. See here for a full list of the stocks.)
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