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Jim Cramer’s top 10 things to watch in the stock market Wednesday — tech earnings edition

My top 10 things to watch Wednesday, Jan. 31

  1. The Nasdaq is set for a big decline at Wednesday’s open as Alphabet slides more than 5% after earnings from the Google parent failed to exceed lofty expectations. Ahead of the last trading day of January, the Nasdaq was up more than 3% for the month. The S&P 500 and the Dow, which have been hitting records recently, were up more than 3% and 2%, respectively, for January, as of Tuesday’s close.
  2. Earnings take a back seat to the Federal Reserve, which concludes its two-day meeting Wednesday afternoon. No interest rate cut is expected. But what’s said in the policy statement and by Fed Chairman Jerome Powell will be scrutinized for signals of whether a rate cut is in the cards for March. I’ve been questioning why the Fed should even be thinking about a cut when the economy is holding up and inflation continues to cool. Hiring at U.S. companies slowed in January, according to ADP. The government’s monthly employment report is out Friday.
  3. We raised our Club price target on Microsoft to $450 per share from $400 following Tuesday’s after-the-bell earnings. Strong quarter on artificial intelligence strength and solid revenue guidance. Excellent Azure cloud.  Shares were relatively flat, which is no surprise given their run-up to record highs into the print. We still want to see more of a pullback before considering buying more shares so we maintained our 2 rating.
  4. The slide in Alphabet shares do not reflect all the good news in Tuesday evening’s quarterly results. Yes, advertising was off a bit but fine. But excellent with Google Cloud, which was soft in the prior quarter. The number of firms who raised this one ahead of the reporting period was insane, and it could never equal the hype. We increased our Club price target on Alphabet to $160 per share from $140. But again, reiterated our 2 rating.
  5. The third Club name that reported late Tuesday, Starbucks, saw its shares rally on a better-than-feared quarter. But quarterly numbers were and January, too. The stock’s more than 4% raise is a good example of what can happen to a stock when the entire market knows its dealing with a temporary issue. Everyone knew a shortfall was coming. I had been warning about it for weeks. However, we lowered our Club price target to $115 per share from $125 to reflect the challenges ahead. We kept our buy-equivalent 1 rating.
  6. Advanced Micro Devices, ex-Club stock and current Bullpen watch list name, issues a huge guide higher from AI business lines. But for the quarter, embedded business disappointed and gaming was weak. I don’t like compare to Club AI powerhouse Nvidia. Not sure it’s fair. AMD shares are sinking for a second straight session after running to record highs last week.
  7. Danaher, coming off a strong quarter and Tuesday’s well-deserved stock pop, gets lots of price target increases on Wall Street, which until recently hadn’t been that enthused about the stock. The life sciences company saw its stock hit a 12-month high. We also raised our Club price target to $260 per share from $250. The stock on Tuesday extended to 34% its increase since hitting a 52-week low on Oct. 30, 2023.
  8. Boeing quarter revenue good. But losses much wider than expected. Strong free cash flow $2.95 billion versus $1.91 billion expected. Postponing guidance as the aircraft maker grapples with the fallout from a fuselage panel that blew out midflight on one of its new 737 Max 9s earlier this month. The Dow stock adds more than 1.5% in early trading.
  9. Dow stock Walmart announces a 3-for-1 stock split as shares stand a couple of dollars below all-time high of nearly $170 each. The move was made to allow more employees to buy into its stock purchase plan. Walmart has done 11 stock splits in its history. The last one was in 1999.
  10. Tesla devastating ruling about Elon Musk’s $56 billion pay package. Judge says return it. Musk can appeal. Did see Musk see this coming? All about X, former Twitter, and the cut of control. Bad disclosure and no give without a get. Shares of Tesla drop more than 2.5% following Tuesday’s after-the-bell disclosure.

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