My top 10 things to watch Wednesday, August 14 1. Wall Street is looking at a modestly higher open after basically in-line consumer inflation did not give investors enough reason pile into stocks like they did on Tuesday’s cooler producer price data. Following the CPI on Wednesday morning, the market odds moved back towards a quarter-point Fed interest rate cut next month. At noon ET Wednesday, we hold our Monthly Meeting for Investing Club subscribers, discussing latest on Wall Street and grading a chunk of Club’s stock portfolio. 2. The July consumer price index’s 0.2% month over month rise met estimates, while a 2.9% year-over-year gain was a bit lower than expected. That’s the lowest annual rate since March 2021. Excluding food and energy, the monthly and yearly increases in core CPI matched what economists had predicted. Sticky shelter inflation came in higher than June’s reading. 3. The Justice Department is exploring whether breaking up Club name Alphabet ‘s Google would be an appropriate remedy after a judge found the tech giant built an illegal monopoly in the online search market, Bloomberg News reported . While it’s still early in the remedy process and other options are on the table, I have said for years that the sum-of-the-parts valuation for Google is very strong for shareholders. 4. Privately held candy maker Mars is buying Kellanova , the owner of Cheeze-It and other food brands, for nearly $36 billion in cash. It values Kellanova, which was spun out of cereal maker WK Kellogg last year, at $83.50 a share. Mars gains exposure to crackers and energy bars with the deal. Shares of Kellanova jumped more than 7% Wednesday, to a few dollars below the deal price. 5. More Wall Street analysts upgraded Club holding Starbucks after the coffee chain on Tuesday surprisingly hired Chipotle CEO Brian Niccol to replace Laxman Narasimhan, sending its stock soaring 24.5%. In addition to three upgrades early Tuesday, Deutsche Bank, Stifel and more followed suit later on. Deutsche Bank argued that investors will be willing to look past Starbucks’ weak near-term fundamentals in order to give Niccol time to develop a multiyear recovery strategy. We boosted our price target on Starbucks to $100 a share Tuesday, up from $90. 6. Baird and Evercore ISI lowered their price targets on Chipotle following Niccol’s departure, with analysts at both firms lamenting the loss of the highly respected executive. Baird went to $62 a share from $74, while Evercore went to $59 from $65. Both maintained their buy-equivalent ratings on the stock, which slid 7.5% in Tuesday’s session. On the other hand, Wedbush upgraded Chipotle to outperform, arguing the burrito chain remains in good hands and is in a position to gain market share in the second half of the year despite a challenging economic backdrop for restaurants. 7. Mortgage refinancing applications jumped 35% last week compared with the previous week, as homeowners looked to capitalize on interest rates reaching their lowest levels in more than a year. As we await a Fed rate cut as soon as next month, this spike in refinancing goes to show how beneficial lower rates will be for consumers. Meanwhile, mortgage applications to buy a house ticked up 3% week over week, but still were down 8% compared with the same period last year. 8. Elliott Management, the activist investor group with a big Starbucks stake, is launching a fight for 10 seats on the 15-member Southwest ‘s board. Elliott has targeted the airline, which has seen its stock price lag its competitors. Southwest said it tried unsuccessfully to work with Elliott. 9. Intel sold its 1.18 million-share stake in chip designer Arm Holdings whose stock increased more than 2.5% on the move. The Arm stock sale, estimated to be worth $147 million, comes as Intel looks to cut $10 billion in costs in a restructuring plan that includes plans for 15,000 layoffs. 10. Club name Palo Alto Networks landed another price-target bump ahead of its quarterly earnings report next week. Citigroup upped its PT to $385 a share from $345, saying its industry checks during the quarter have been respectable. In recent days, Stifel and Barclays also hiked their PTs on the cybersecurity provider. Sign up for my Top 10 Morning Thoughts on the Market email newsletter for free (See here for a full list of the stocks at Jim Cramer’s Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. 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My top 10 things to watch Wednesday, August 14
1. Wall Street is looking at a modestly higher open after basically in-line consumer inflation did not give investors enough reason pile into stocks like they did on Tuesday’s cooler producer price data. Following the CPI on Wednesday morning, the market odds moved back towards a quarter-point Fed interest rate cut next month. At noon ET Wednesday, we hold our Monthly Meeting for Investing Club subscribers, discussing latest on Wall Street and grading a chunk of Club’s stock portfolio.
2. The July consumer price index’s 0.2% month over month rise met estimates, while a 2.9% year-over-year gain was a bit lower than expected. That’s the lowest annual rate since March 2021. Excluding food and energy, the monthly and yearly increases in core CPI matched what economists had predicted. Sticky shelter inflation came in higher than June’s reading.
3. The Justice Department is exploring whether breaking up Club name Alphabet‘s Google would be an appropriate remedy after a judge found the tech giant built an illegal monopoly in the online search market, Bloomberg News reported. While it’s still early in the remedy process and other options are on the table, I have said for years that the sum-of-the-parts valuation for Google is very strong for shareholders.