4 takeaways from the Investing Club’s ‘Morning Meeting’ on Tuesday

Energy
Tuesday, July 19th, 2022 10:00 am EDT

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 Monday’s key moments. 1. Apple to slow down hiring — what this means for the market 2. JNJ earnings: business is still very strong 3. Halliburton reports better-than-expected earnings 4. Quick mentions: PXD, EL, CRM 1. Apple to slow down hiring — what this means for the market The markets opened on a bright note on Tuesday with the S & P 500 and the Nasdaq both up more than 1.5% in morning trading. It was a welcome reversal from Monday afternoon when all the major U.S. indices fell following reports that Apple (AAPL), one of the world’s most popular consumer brands, announced it will cool down hiring plans and reduce spending in some areas of the company. Apple is not alone. Global investment bank Goldman Sachs (GS) and video services platform Vimeo (VMEO) also announced they will either be slowing hiring or laying off employees. Why is this happening? Companies across all sectors are trying to manage rising prices amid a potential economic slowdown, making this a likely emerging theme this earnings season. What’s top of mind for this earning season is whether company profits have held up with higher costs and waning consumer confidence. “Businesses are pivoting right now because they see what the Fed wants to do, and they’re not going to just sit there and lose money,” Jim Cramer said in the Investing Club’s ‘Morning Meeting’ on Tuesday . Overall, we prefer to take an optimistic view and think the market is in rather good shape. 2. JNJ earnings: Business is still very strong Investing Club holding Johnson & Johnson (JNJ) reported solid second-quarter revenue results of $24 billion, a 3% year-over-year increase and earnings per share of $2.59, 5 cents better than the Wall Street consensus. Here’s a quick breakdown: JNJ’s pharma business delivered $13.3 billion in sales, a 6% year-over-year increase. MedTech brought in $6.9 billion in sales, a 1% year-over-year decline. The consumer segment reported $3.8 billion in sales, a 1% year-over-year decline. While these are solid numbers, there were some challenges during the quarter. Inflation pressures and continued supply-chain disruptions impacted JNJ sales. Furthermore, the strong dollar weighed on international sales and compelled the company to cut forward year EPS guidance. On a more positive note, the midpoint of the company’s full-year-adjusted EPS outlook was maintained on an operational basis, which excludes the impact of currency. We think that if the dollar starts to weaken, the stock could see some new highs. Our takeaway from the quarter is JNJ’s business is still very strong. “In terms of experimentation and growth JNJ is the best in the field,” Cramer said. Notable mention: JNJ announced in November 2021 that it will separate its consumer health business from its pharmaceutical and MedTech business, creating two separate businesses, eventually resulting in two publicly traded companies. 3. Halliburton reports better-than-expected earnings Earnings results from the oil field service company and Club holding Halliburton (HAL) came in strong at $5.07 billion versus FactSet estimates of $4.71 billion, and earnings per share of $0.49 vs. an expected $0.45. Halliburton is a beneficiary of tight oil supply and strong demand for the commodity in both North America and international markets. “I expect the international markets will experience multiple years of growth, and I am confident that Halliburton is positioned to benefit more from this multi-year upcycle than ever before,” said Halliburton President and CEO Jeff Miller in the company’s press release. Miller echoed similar sentiments about the company’s ability to grow in North America. By geographic region, Halliburton saw most of its revenue from the North American geographic region. Catch Halliburton’s Jeff Miller on Mad Money tonight. HAL stock rallied on Monday as oil prices rose and is up 1.6% on Tuesday. HAL saw a 52-week high of $43.99 on June 8 and currently stands at about $29. “The stock is not up nearly enough. People decided that the oil business is finished. I expect this stock to have a better move,” Cramer explained. As long-term investors, we like Halliburton for its increasing sales, improving margins, and the fact that it acts as a hedge in our diversified Investing Club portfolio. Year to date HAL is up 20%, while the S & P 500 is down 20%. 4. Quick mentions: PXD, EL, CRM Pioneer (PXD): Bank of America downgraded Pioneer Natural (PXD) to sell from hold. We still like the company for its consistent record of growth and because it has the highest dividend in the S & P 500. Estee Lauder (EL): We sold this stock last December because the multiple was high but it’s coming down. We like this beauty company because it has a huge China presence and is a high-quality company in a fast-growing category. “We should be buying Estee Lauder,” Cramer says. Salesforce (CRM): “The stock reflects a lot of bad and not a lot of good,” Cramer said, but highlighted that Dreamforce, the company’s annual conference which could help add more to company sales. The Club’s position: We are sticking with this company. (Jim Cramer’s Charitable Trust is long AAPL, HAL, JNJ, PXD, CRM. 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.”

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