Ada Nya Begini: Here's our plan for Monday after another painful week to own stocks

Friday, September 23, 2022

Here's our plan for Monday after another painful week to own stocks - CNBC

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Stocks took a beating this week as the Federal Reserve raised interest rates by another 75 basis points, the third consecutive hike of that magnitude. It wasn't the rate move — which was anticipated by the market — but Fed Chair Jerome Powell's hawkish comments on Wednesday that hurt stocks. He's now targeting a rate of 4.4% at the end of the year, up from the 3.4% rate projected at the central bank's June meeting. It was the fifth losing week out of the last six for all the major stock averages, capped by another painful drop on Friday. The one bright side is that this vicious selling is creating bargains and opportunities for those with a long-term mindset. The S & P 500 Short Range Oscillator should be at an extreme oversold reading after Friday. Perhaps it will be minus 10%, maybe even lower. (Anything below a minus 5% indicates the market is oversold.) We'll be watching the 2-Year Treasury for a sign that it's okay to buy stocks. Jim Cramer believes that if the yield on the 2-Year stabilizes — meaning it doesn't keep climbing throughout the next session — then we have to put some money to work because the market is so oversold. If the 2-Year yield continues to soar, then that may mean more pain lies ahead for equities. We've been slow to deploy our precious cash during this malaise. But after talking it over, Jim and the team believe the plan is to slowly step up our buying Monday into two or three positions — only into high-quality companies and yes, perhaps an oil firm — given the magnitude and speed of this decline. Under the hood this week, all sectors lost ground, with energy leading to the downside followed by consumer discretionary and real estate. Meanwhile, the U.S. dollar index advanced to the 113 level, notching its best week since March 2020. Gold pulled back to around the $1,650 per ounce. WTI crude prices fell below $80 per barrel. The yield on the 10-year Treasury advanced to the 3.7% level. Looking back On the earnings front, we got results from Costco (COST) on Thursday. On Tuesday, we learned that housing starts for the month of August came in at a seasonally adjusted annual rate (SAAR) of 1.575 million, ahead of expectations of a 1.45 million. Building permits, on the other hand, were below expectations at a 1.517 million SAAR, missing the 1.6 million estimate. Existing home sales were reported on Wednesday to have fallen to a 4.8 million unit SAAR, the slowest sales pace since May 2020. Also Wednesday, the Federal Reserve raised the federal funds rate by another 75 basis points while maintaining its hawkish tone. On Thursday, initial jobless claims for the week ending Sept. 17 came in at 213,000, an increase of 5,000 from the prior week and below expectations of 215,000. What's ahead No portfolio companies will be reporting next week. Here are some other earnings reports and economic numbers to watch in the week ahead: Tuesday, September 27 Before the bell: Cracker Barrel (CBRL), Jabil (JBL), United Natural Foods (UNFI) After the bell: BlackBerry (BB), Cal-Maine Foods (CALM) 8:30 a.m. ET: Durable Goods Orders 10:00 a.m. ET: New Home Sales Wednesday, September 28 Before the bell: Cintas (CTAS), Paychex (PAYX), Thor Industries (THO), Stem Inc. (STEM) After the bell: Vail Resorts (MTN), Jefferies Financial (JEF), Concentrix (CNXC), MillerKnoll (MLKN) 10:00 a.m. ET: Pending Home Sales Thursday, September 29 Before the bell: Bed Bath & Beyond (BBBY), Rite Aid (RAD), CarMax (KMX) After the bell: Micron (MU), Nike (NKE) 8:30 a.m. ET: Initial Jobless Claims 8:30 a.m. ET: Gross Domestic Price Index Friday, September 30 Before the bell: Baker Hughes (BKR) 8:30 a.m. ET: Personal Spending and Income (See here for a full list of the stocks in Jim Cramer's Charitable Trust is long.) 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.

U.S. Federal Reserve Board Chairman Jerome Powell holds a news conference after Federal Reserve raised its target interest rate by three-quarters of a percentage point in Washington, September 21, 2022.

Kevin Lamarque | Reuters

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Here's our plan for Monday after another painful week to own stocks - CNBC
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Here's our plan for Monday after another painful week to own stocks - CNBC

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