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Here’s why we’re not sweating Amazon’s light second-quarter guidance
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Published
2 weeks agoon
Every weekday the CNBC Investing Club with Jim Cramer holds a “Morning Meeting” livestream at 10:20 a.m. ET. Here’s a recap of Wednesday’ key moments. U.S. stocks were mixed Wednesday as Wall Street prepared for the Federal Reserve’s next policy decision in the afternoon. Fed chief Jerome Powell is set to deliver remarks during a 2:30 pm ET press conference. Although the U.S. central bank is expected to hold interest rates steady, traders will be looking for clues on what needs to happen before rate cuts can finally begin. “There’s a lot of data that’s been hot, but we know there’s rot underneath,” Jim Cramer said, citing Tuesday’s weaker-than-expected consumer confidence numbers. “[Powell] should certainly be able to correct the impression that everything is strong [in the economy].” Dupont De Nemours stock surged more than 8% after Wednesday’s quarterly earnings report. There were positive signs of recovery in the company’s semiconductor business – a big reason we first invested in the materials giant. “People don’t realize what it’s like when [CEO] Ed Breen gets on the juggernaut,” Jim said. “This is the DuPont we wanted when we bought it.” Shares of Estee Lauder declined more than 10% despite the cosmetic firm’s solid fiscal third-quarter numbers. There was a solid beat on earnings, but its current-quarter outlook and revised organic sales outlook spooked investors. Still, Jim argued that the worst seems to be behind the cosmetics giant despite the stock’s Wednesday decline. “People hate the company too much,” he said of the market’s reaction. Amazon posted fantastic quarterly results on Tuesday . However, management’s current-quarter guidance came in a bit light, which could be factoring into the stock’s muted gains Wednesday. We’re not concerned about the tech giant, though, hoping its outlook proves conservative in the classic “under promise, over deliver” game. “There’s no incentive in giving some pie in the sky number,” Jim said Wednesday. “[Management] did not say, ‘You know what, things are slowing down.’ That was not the takeaway of the call. Things are either ahead of plan or accelerating, and that is what matters with Amazon.” The Club raised its price target to $200 from $190 apiece after the print. (Jim Cramer’s Charitable Trust is long AMZN, EL, DD. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
