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Not a great setup. There are too many articles and posts about how we are overhyping AI and how there isn’t enough content to justify recent market moves. There’s no doubt that the market, especially the Nasdaq, has focused endlessly on what amounts to the same information: Nvidia (NVDA) makes great cards; Adobe (ADBE) commissioning them; just like Meta Platforms (META), but we don’t know how; as well as Microsoft (MSFT), Alphabet (GOOGL) Google and most notably Oracle (ORCL); but don’t forget Broadcom (AVGO) and Marvell (MVRL). This is really disturbing. Therefore, I approach this shortened week with some trepidation. There’s really nothing new to see outside of analyst meetings from Samsara (IOT) and MongoDB (MDB), both beloved but both a bit obscure. They can’t move the needle. So it seems to me that this is a test week. Research has no hope at present. If the stock is rising, we will achieve an increase in the target price. If it’s down, we get cuts. Nothing original, nothing against the grain. That’s been the main source of sustenance for a while now, but I think we’ve had enough of it, so it might cause a hiatus. Never mind, I think we’ll get a break and we still don’t have a replacement for the AI theme. Are we going to health care after President Joe Biden’s first campaign rally? Harder and tougher. Finance Before FDIC Penalties? Maybe, and a lot of regional banks seem interesting. Have you seen the yield and P/E ratio multiply at Truist, a really good regional bank? The consumer packaged goods segment has been written off as a past tense: Campbell’s ( CPB ) last quarter may be a template. Retail is tough as nails: only Walmart ( WMT ) and Costco ( COST ) seem to be holding out. Transportation? You’re on your own because I think the Street is eager to end the revenge travel charm. How many times can you recommend cruise ships again? For weeks now, industrials have been going on about the same thing — China’s future stimulus plan that hasn’t arrived yet, and possibly the Democrats’ infrastructure plan. I will not hide in oil and gas because I will be exposed in plain sight. Of course there is some exaggeration and heaven knows I am given to it. Still, I’m worried about this week because for the first time in a long time I think we need to digest properly. No, I just feel like we’ve gotten to the point where I have more ideas to sell than to buy. When I look at the market, I see many charts that are extended where, even if I like them, I would not be comfortable buying them. I’m aware that stocks like Adobe had a huge run to an excellent quarter and then raced up the hill even more on AI-fueled numbers. That in itself is pretty amazing. But then sellers appeared out of nowhere and reversed a large part of the move. There is a lot of fluff on the tape. I see fluff in a lot of places, maybe all but the poor oils that seem to need a quick replenishment of the strategic oil supply. At times like these, I like to think about what it would take to put new money to work. Now we know we didn’t get any interest rate hikes from the Federal Reserve last week because the central bank didn’t seem to know what to do – too many misfits trying to invent something they couldn’t, so why not put it off? But like I said, we can’t seem to get unemployment up and wage growth down. The Fed knows that without more layoffs, you can’t reduce the most pressing part of inflation—rents. We have them in tech and now in finance, but not enough to make people leave their homes or go back to their people. That’s why I think they’re really playing for time. They need to build more houses and they need the house builders to lose discipline. To that I say, good luck. But what matters is that I feel we are fresh off the catalysts to go higher and that most stocks just don’t seem to be at levels that make sense to buy. Why not just wait? This is difficult for most of us. We will want to jump at the first sign of a price break for fear of missing out. Still, it’s worrying again. We don’t want to be afraid of coming. We want to buy the things we want at our prices or otherwise. Are these the prices we want for Microsoft? For Nvidia? So let’s wait and see. I’m willing to spend a percent or two, maybe three, to see if we can’t get a better basis for our stock if we want to buy any. Since the market is officially overbought, I think I’ll wait until we have a few days down before it’s worth pulling the trigger. (Jim Cramer’s Charitable Trust is long NVDA, META, MSFT, GOOGL, COST. Find a full list of stocks here.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive trade alerts before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling shares in his charitable trust’s portfolio. If Jim was talking about stocks on CNBC TV, he waits 72 hours after the trade alert is issued before he executes the trade. THE ABOVE INVESTMENT CLUB INFORMATION IS SUBJECT TO OUR TERMS AND PRIVACY POLICY ALONG WITH OUR DISCLAIMER. NO FIDUCIARY OBLIGATION SHALL EXIST OR CREATE BY YOUR ACCEPTANCE OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTMENT CLUB. NO PARTICULAR RESULT OR PROFIT IS GUARANTEED.
Jim Cramer in Squawk on the Street, June 30, 2022.
Virginia Sherwood | CNBC
Not a great setup. There are too many articles and posts about how we are overhyping AI and how there isn’t enough content to justify recent market moves.
There is no doubt that the market, in particular Nasdaqgathered endlessly on what amounts to the same information: Nvidia (NVDA) makes great cards; Adobe‘s (ADBE) their commissioning; so it is Platform meta (META) but we don’t know how; as Microsoft (MSFT), Alphabet‘s (GOOGL) Google and most importantly, Soothsayer (ORCL); but don’t forget Broadcom (AVGO) a Marvell (MVRL).