My top 6 things to watch Monday, May 8
1. With earnings slowing, investors are shifting focus to Tuesday’s debit ceiling meeting at the White House. On Sunday, Treasury Secretary Janet Yellen said failure to raise the nation’s borrowing limit would cause a “steep economic downturn.” Early June is the deadline. As things get closer and closer, I think about the 2011 debt ceiling game of chicken and it was not good for markets.
2. The Dow, the S&P 500 and the Nasdaq are set to open mixed after Friday’s strong rally broke a four-session losing streak. However, the Dow and S&P 500 still closed lower for the week. The Nasdaq eked out a weekly gain. Regional banks rebounded for a second session Monday. Wynn Resorts (WYNN) reports quarter after the closing bell Tuesday. Disney (DIS) out after the bell Wednesday. Both Club names.
3. Morgan Stanley raised its price target on Disney to $120 per share from $115. Keeps overweight (buy) rating. The analysts boosted estimates after taking into account cost-cutting measures. Calls Disney shares “compelling here.” We agree as shareholders of Disney for the Club.
4. Warren Buffett says Club holding Apple (AAPL) is his favorite stock. Best investment. At Berkshire Hathaway’s (BRK.a) annual meeting Saturday, Buffett said people would rather give up their second $35,000 cars than give up their iPhones. The Club raised our price target on Apple to $185 per share from $175 after last week’s strong quarter. We also boosted four other PTs and one rating.
5. Buffett said Berkshire doesn’t intend to buy the rest Occidental Petroleum (OXY). Berkshire purchased more shares of Occidental this year, taking its stake to 23.5%. In oil and natural gas production, we own Coterra Energy (CTRA) and Pioneer Natural Resources (PXD), which we added to Friday. We also own oilfield services giant Halliburton.
6. Club holding Estee Lauder (EL), adding to Friday’s bounce, jumped 5% early Monday. The stock plunged 17% on Wednesday after delivering a mixed quarter but a very weak outlook. The New York Post reported Sunday that activist investor Nelson Peltz was thinking about a “possible shakeup.” The Post said it is not known whether or not Peltz has acquired a stake in Estee Lauder.
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