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we don’t know what we want. After the S&P 500 closed at its highest level in more than two years on Friday, this week will tell us what will move us forward or backwards. For example, there are three railroads to report on this week: Union Pacific, CSX, and Norfolk Southern. It includes nearly every non-service part of the U.S. economy, including housing, industrial production, minerals, road construction, heating, and food. What numbers would you like to see from these three? Do you want them to be more flexible to support the Fed’s interest rate cut requests? Or do we want positive year-over-year numbers to prove there is no hard landing for the American economy? Or does the Fed want to blatantly make it stronger to tempt tightening, even though so many central bankers are adamant that it’s over? I think the answer lies somewhere in the middle and avoiding a tense hard landing by making the right comparisons. Despite the bond market’s seeming reliance on broader data, this rail is too important and wrong to ignore. Perhaps that’s why the forward curve is wrong. And why is the forward curve so wrong? I think it’s a large funds flow factor that is not sensitive to changes in interest rates and doesn’t care about being wrong. We know from the banking crisis that followed the Silicon Valley Bank collapse almost a year ago that banks are making so many stupid investments that no conclusions can be drawn from them. Regardless, I think equity investors will continue to focus on both interest rates and what drives them. And if you want to be informed, you need to watch the reaction to the rails, regardless of what the market wants. Super 6 Why is this so important? Because we have a default mechanism that always shows up. It’s a return to the Magnificent Seven’s new nickname, the Super Six. That’s because, as reported on Wednesday, Tesla has been separated from the rest of the group’s companies as electric vehicles decline. Arguably, charging stations are growing rapidly and becoming even more popular. No, the default mechanism is a stock in a company called ServiceNow that reports on Wednesday. ServiceNow has almost everything a business could want. A charismatic leader who improves estimates, benefits from generative artificial intelligence, and doubles as an engaging closer. I wouldn’t want to go against CEO Bill McDermott if I were to consider a company that would think about ways to increase productivity. I think that’s the main broad impact of this company. That’s why businesses and governments choose ServiceNow. They know they have a power multiplier and they can’t be ripped off. If ServiceNow puts up pretty good top and bottom line numbers and Rails is disappointing, we’ll see Microsoft break above $400 and Nvidia back in the world chasing another 50 points. Great for the Super 6 are Google’s parent Alphabet, Amazon, Apple, Meta Platforms, Microsoft, and Nvidia. These are all club stocks. But then there’s going to be a lot of discussion about how the Russell 2000 Small Cap Index isn’t rising. As if that has mattered over the past decade and a half. Health Care Stocks The performance of health care stocks, excluding the disastrous health insurance companies, could also be telling. From his JPMorgan Healthcare Conference earlier this month, we found ourselves in the midst of a lot of ingenuity. Abbott Laboratories is the most important stock in the group because it covers all types of healthcare sectors. The company has a bad habit of exceeding expectations on only some items. When prices actually go up, sign up for your favorite healthcare company. I’ll be talking a lot about my favorite players in the sector’s bullpen at the Investment Club’s monthly meeting on Wednesday at noon ET. After our visit to the JPMorgan conference in San Francisco, we added Abbott, Amgen, Novartis, and Walgreens Boots Alliance to our bullpen watch list. At least Abbott is telling a decent story. I’m starting to dread the club name Procter & Gamble’s report because CEO John Mueller is a one-man saboteur who constantly points out things that aren’t going well within the few positives. There is. I wish someone would tell the company that they don’t need to find 10 Achilles heels over the phone. Maybe it’s a Cincinnati thing. P&G will report its quarterly results on Tuesday. Will the market rise driven by the Super Six and healthcare? I certainly think so. The Fed’s Role This market is much more comfortable being led by companies that grow in a non-inflationary environment, as there is still concern that the Fed will change the direction of interest rates. If nothing else other than what we’ve experienced so far, if I were a member of the Fed’s policy-making committee, I’d be more concerned that things are already starting to heat up. Ask yourself what happened to prices last year. I know the answer. There is nothing. It’s just that the pace of inflation is slow, and the Fed is probably regretting saying it wouldn’t tighten any further, and in hindsight I think it was unwise. The power of technology Nevertheless, the Super Six continues to disrupt. Take Apple for example. Going back to the countless downgrades before and after its earnings calls and recent debacle announcements, you won’t find a single word about its most obvious and powerful new product: the Vision Pro mixed reality headset. The headset was released on Friday and sold out immediately. Even though the starting price is $3,500. This preordained “misfire” from a company that “hasn’t innovated since 2011,” the day Steve Jobs died, was a hit. Because, in fact, the company is his machine with hidden innovations in every iOS mobile operating system update that takes place nightly. Vision Pro changes the way you view entertainment, subverting the joy of a 75-inch screen from 20 feet away. I know some people don’t want to watch a soccer game outside in 20 degrees, but I’ve never heard anyone say that they feel like they’re “there” when they’re in their living room looking at the screen. I have never had one. . Welcome to a world where you can lie back and watch TV and switch from commercials to the show you want to watch with just a touch of your thumb and forefinger. It’s no wonder Google’s YouTube and Netflix don’t put their own work on Vision Pro. It’s so powerful that it somehow loses control over the audience. Surprisingly, neither the high price nor the complicated in-store instructions deterred early adopters. When Apple reports its latest quarter on February 1st, adopters will be spreading the word loud enough to give the company something to talk about beyond underperforming Chinese-made devices. Apple can’t hype itself to save its own life, and I don’t know about it. I just want to talk about a phone that worked even after he plummeted from a height of 16,000 feet from a plane with doors that were too flexible, but I can’t get a positive word from them. I don’t think Apple would discuss the incredible revenue stream generated by Vision Pro. This is a very good story, as Vision Pro had little role to play as protection against downgrades. There’s nothing like a new product line at a price point higher than a phone to make the story better. I’m just bullying Apple. Amazon and Alphabet have no problem talking about efficiency. Meta is doing something with these connected Ray-Bans. Maybe it’s because I have a daughter who loves Instagram so I know how powerful a concept it can be. The actual regular Ray-Bans look like they have more baggage than the meta version. All Microsoft needs to do is disclose the number of seats sold for the Copilot AI assistant in its Office suite and capture it. Suffice it to say, Kimberly-Clark can’t win this competition. Boredom is unacceptable in this market. Conclusion So let’s move on. Excitement and calm in the bond market equate to rising stock prices. But that’s only if their product is new and improved, as advertised. Only the Super Six can say that without falsehood. (See here for a complete list of Jim Cramer Charitable Trust stocks.) As a subscriber to Jim Cramer’s CNBC Investment Club, you will receive trade alerts before Jim makes a trade. After Jim sends a trade alert, he waits 45 minutes before buying or selling stocks in a charitable trust’s portfolio. If Jim talks about a stock on his CNBC TV, he will wait 72 hours before executing the trade after issuing a trade alert. 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Jim Cramer and the bulls at the New York Stock Exchange. June 30, 2022.
Virginia Sherwood | CNBC
we don’t know what we want. This week we will find out what will move us forward or set us back. S&P500 It closed Friday at its highest level in more than two years.
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