My top 10 things to watch Monday, March 27
1. First Citizens BancShares (FCNCA) to the rescue, buying large chunk of failed SVB deposits and loans. Healthy help from the FDIC. Blueprint to end the banking storm and keep the Fed on course. First Citizens shares up over 50%. No raid on Deutsche Bank (DB), which was under siege last week. Pressure, for now, off First Republic Bank (FRC), the regional whose stock's ups and downs seem to be the driver of the overall stock market of late. So there is stress, but we now have a way for banks to get bigger. Is flight to quality over? How tight is credit?
2. First Republic up more than 30% ahead of Monday's open (as of Friday's close down 90% year to date) and the Dow, the S&P 500 and the Nasdaq set to build on Friday's and last week's gains on Wall Street.
3. The banking crisis is doing the Fed's job and creating a window for stocks to rally before earnings season starts. I connected the dots in my Sunday commentary. Big inflation number comes this Friday: the Fed's favorite personal consumption expenditure (PCE) index.
4. Also as I mentioned Sunday, we'd be watching General Mills' (GIS) for signals on food prices. Better-than-expected earnings per share (EPS) and revenue. Fueled by strong net price realization. Will Club holding Costco (COST) let those higher prices continue? Looking out beyond this fiscal year, General Mills' CEO also sees inflation going down but staying above historic levels. GIS gets from price target bumps on Wall Street.
5. Club holding Salesforce (CRM) and Elliott Investment Management agree to stop fighting as the last activist breaks bread with co-founder and CEO Marc Benioff. Elliott said it abandoned director nominations following actions taken by Salesforce, including Benioff announcing earlier this month a plan to accelerate the company's profitability goals by two years.
6. Club name Nvidia (NVDA), up more than 80% year to date after a terrible 2022, gets a price target boost at UBS to $315 per share from $270. Big call that cites partners lined up.
7. Pioneer Natural Resources (PXD) sees price target cut at Raymond James, which goes to $241 per share from $300. Same with EOG Resources (EOG) to $149 from $171. Chasing down. Often a bottom. Diamondback Energy (FANG) to $165 from $205. We've been buying PXD this month.
8. Baird takes Caterpillar (CAT) to underperform from neutral (sell from hold), citing a slowdown in non-residential. I think this is a really bad call. We see CAT as a buy due to government-mandated spending on infrastructure, activity that needs the type of construction and excavation machines that the company is known for.
9. RH (RH), the company formerly known as Restoration Hardware, price target cut to $245 per share from $335 at Wedbush. Keeps neutral (hold) rating. Is this trade overdone on the downside? That new PT is about where RH closed on Friday.
10. Wingstop (WING) cut to underperform (sell) from hold at Jefferies, which kept its $160-per-share price target. The company has been among the strongest of this group. Great franchise model. Not regarded as played out. Near-term momentum is well understood. Category-leading development is also well known.
(Jim Cramer's Charitable Trust is long COST, CRM, NVDA, PXD, CAT. See here for a full list of the stocks.)
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