My top 10 things to watch Monday, Oct. 7
1. Wall Street was looking to open lower Monday. The Dow, the S&P 500, and the Nasdaq eked out weekly gains after Friday’s rally. Bond yields creeped higher after Friday’s strong jobs report reduced expectations for another jumbo Fed interest rate cut. Monday morning, the 10-year Treasury yield topped 4%. The week ahead features two key inflation reports — plus, Club name Wells Fargo kicks off earnings season at the end of the week.
2. We’re continuing to watch for Israel’s response to Iran’s missile attack last week, and U.S. oil prices pushed another 2% higher Monday to around $76 per barrel. Sure, the jump in crude caused few stocks to go down — but also, lots of stocks to go higher. There’s too much negativity about the stock market. Tons of downgrades to start the week. I highlighted three positives in my Sunday column.
3. Wells Fargo downgraded Amazon to a shocking hold-equivalent and cut its price target to $183 per share from $225. The analysts expect no upside and short-term pressure. They’re worried about Walmart competition. The Club name is well above where it was when it reported earnings. Can you get back in if you sell? That’s always been the issue. We don’t play that game. Club name. Worried about Walmart competition.
4. Jefferies downgraded Apple to hold from buy. The analysts increased their price target but it’s still below where the Club stock is currently trading. The Jefferies note said Apple is attractive long-term but thinks the tech giant’s hardware “needs rework before being capable of serious AI, with a likely timeline of 2026 or 2027.”
5. Bank of America downgraded Mexican beer powerhouse Constellation Brands to neutral from buy and lowered its price target to $255 per share from $300. Barclays kept its buy-equivalent rating but lowered its PT to $300. The analysts are concerned about wine and spirits, like we are as shareholders. I had Constellation CEO Bill Newlands on “Mad Money” on Friday and he said he sees green shoots at the high-end wine and spirits.
6. Barclays downgraded DuPont to a sell-equivalent rating and trimmed its price target to $84 per share from $88. I do not get this downgrade, citing a full valuation. While the Club stock has run higher, the business is splitting into three pieces. I think this is a real bad idea to sell.
7. Abbott Laboratories saw a huge win last week when the FDA, CDC, and NIH said there’s no conclusive evidence that specialized infant formula for preemies causes the terrible intestinal illness necrotizing enterocolitis. Could it end the lawsuits and turn around the loss of a big case in July? The Club name is currently involved in another trial. Buy this into weakness.
8. Club name Home Depot could see more business in Florida as a second hurricane takes aim at the state’s Gulf Coast. Hurricane Milton could make landfall in the Sarasota area. That’s south of where deadly Hurricane Helene roared ashore on Sept. 26 in Florida’s big bend and then traveled north bringing devastation with it.
9. Activist investor group Starboard has a $1 billion stake in Pfizer and is seeking to turn around the struggling drugmaker, according to CNBC sources. Jeff Smith’s Starboard is worried about recent acquisitions and costs under current leadership under CEO Albert Bourla. Sources say Starboard approached former Pfizer executives for help.
10. Humana caught two downgrades: TD Cowen and Jefferies. It’s a muddled situation to say the least. The stock was down again Monday in what would be its sixth straight session. The sell-off is the result of a drop in Humana’s Medicare Advantage quality ratings.
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