My top 10 things to watch Friday, Jan. 13
1. Bank stocks decline on recession concerns after kicking off earnings season Friday, dragging down the entire market. The Dow Jones Industrial Average and the S&P 500 closed Thursday on three-day winning streaks and the Nasdaq finished up for a fifth straight session. Our trusted S&P Oscillator is at plus 9.5% as of Thursday’s close. Rarely this overbought. But breadth is great so might be able to transcend.
2. Club holding Wells Fargo (WFC) saw fourth-quarter earnings cut in half to 67 cents per share due to regulator settlement costs and higher loan reserves. Revenue fell 5.7% to $19.66 billion and missed estimates. Repurchases back. Credit quality remains strong. Big beats on net interest income and net interest margin.
3. Bank of America (BAC) fourth-quarter earnings of 85 cents per share beat estimates; revenue of $24.66 billion did, too. Higher rates help offset declines in investment banking. Credit cards up. Consumer is very strong.
4. Citigroup (C) says fourth-quarter net income fell by more than 20% — investment banking drag masks higher rate benefit. Revenue of $18.01 billion beat estimates.
5. Dow stock JPMorgan (JPM) beat with fourth-quarter revenue of $35.57 billion. Adjusted earnings-per-share of $3.57. Net interest income on this and others are lower than thought because of classic repricing. The bank says a mild recession is now its “central case.”
6. UnitedHealth (UNH), also a Dow stock, bounced around Friday morning after the health insurer reported a much better-than-expected quarter. Maintained guidance for 2023. Should bode well for Club holding Humana (HUM), which is set to report its quarterly results before the opening bell on Feb. 1.
7. Delta Air Lines (DAL) shares drop as higher costs hit first-quarter guidance. The carrier in Q4 did beat on earnings and revenue. Adjusted EPS $1.48 on $12.29 billion, excluding refinery sales.
8. Mizuho says 2023 estimates for Amazon (AMZN) are 10% too high. This is our line at the Club as well, unless they really start cutting costs. I’ve said repeatedly the 18,000 announced job cuts are just a drop in the bucket of the reductions that are needed.
9. Tesla (TSLA) cuts prices — as much as $20,500 in U.S. and Europe. Dramatic. Wells Fargo’s research analysts say the electric automaker might lose its tech valuation; cuts price target to $130 per share from $230; keeps an equal weight (hold) rating. Guggenheim puts a sell on Tesla with an $89-per-share price target.
10. Tim Cook, CEO of Club holding Apple (AAPL), requests and receives a 40% pay cut to $49 million in 2023. While agreeing to reduce his compensation in these tough times, Apple’s board praised Cook’s performance.
(Jim Cramer’s Charitable Trust is long WFC, HUM, AMZN, AAPL. See here for a full list of the stocks.)
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