The market needs weak retail data to stay strong
The stock market̵[ads1]7;s current run could fizzle out if retail sales data for October come in hot next week, CNBC’s Jim Cramer warned Friday.
“If we see weak retail sales and learn that things are getting very promoted in the key apparel sector, then the market could remain strong,” he said, adding: “The worse retail gets, the less damage the Fed needs to do before they declare victory.”
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Stocks rose on Friday after lighter-than-expected October consumer price index data released the previous day raised investors’ hopes that the Federal Reserve will slow the pace of rate hikes. The benchmark S&P 500 ended its best week since June.
Earnings reports from the nation’s biggest retailers take center stage next week, as do retail sales data for October.
“While I want retail stocks to do well, oddly I have to root for a weak number [from the October report] with little inflation to make it happen,” Cramer said.
He also previewed next week’s results summary. All earnings and revenue estimates are provided courtesy of FactSet.
Tuesday: Walmart, Home Depot
Walmart
- Q3 2023 results announcement at 7 a.m. ET; conference call at 8 a.m. ET
- Estimated EPS: $1.32
- Estimated revenue: $147.67 billion
Cramer said the economy is soft enough that customers are starting to trade down, which is good news for Walmart.
Home Depot
- Q3 2022 results announcement at 6 a.m. ET; conference call at 9:00 a.m. ET
- Estimated EPS: $4.12
- Estimated revenue: $37.94 billion
Wednesday: Lowe’s, TJX, Target, Nvidia
Lowes
- Q3 2022 results announcement at 6 a.m. ET; conference call at 9:00 a.m. ET
- Estimated EPS: $3.09
- Estimated revenue: $23.14 billion
Cramer said Lowe’s and Home Depot are likely to win because of home renovations, but he doesn’t expect either company’s quarters to knock it out of the park.
TJX
- Q3 2023 earnings announcement at 9:30 a.m. ET; conference call at 11 a.m. ET
- Estimated EPS: 80 cents
- Estimated income; $12.30 billion
TJX stock is “the best of the best for this particular moment,” he said.
Goal
- Q3 2022 earnings announcement at 6:30 a.m. ET; conference call at 8 a.m. ET
- Estimated EPS: $2.16
- Estimated revenue: $26.41 billion
He said he believes in Target.
Nvidia
- Q3 2023 results announcement at 3:20 p.m. ET; conference call at 5 p.m. ET
- Estimated EPS: 71 cents
- Estimated revenue: $5.8 billion
Cramer said he is concerned that semiconductor players are experiencing a short-covering rally rather than a sustainable one.
Thursday: Kohl’s, Gap, Palo Alto Networks
Kohl’s
- Q3 2022 results announcement at 7 a.m. ET; conference call at 9:00 a.m. ET
- Current EPS: 82 cents
- Current revenue: $4.05 billion
Space
- Q3 2022 earnings announcement at 4:15 p.m. ET; conference call at 5 p.m. ET
- Estimated EPS: $0
- Estimated revenue: $3.81 billion
Cramer said he is uninterested in both Kohl’s and Gap’s shares.
Palo Alto Networks
- Income statement for the 1st quarter 2023 at 4:05 p.m. ET; conference call at 4:30 PM ET
- Estimated EPS: 69 cents
- Estimated revenue: $1.55 billion
He said he recommends buying the stock if it falls before the earnings call.
Friday: Foot Locker
- Q3 2022 earnings announcement at 6:45 a.m. ET; conference call at 9:00 a.m. ET
- Estimated EPS: $1.14
- Estimated revenue: $2.10 billion
Cramer said he’s betting CEO Mary Dillon has a plan to improve Foot Locker’s performance.
Disclaimer: Cramer’s Charitable Trust owns stock in TJX and Nvidia.
