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With major corporations such as Alphabet, Meta, Apple, Microsoft, and Amazon gearing up to disclose their quarterly earnings next week, CNBC personality Jim Cramer is advising investors to remain cautious and analytical. He pointed out the upcoming nonfarm payroll report, which is also anticipated next Friday. A disappointing hiring outcome could pressure the Federal Reserve to implement further rate cuts, Cramer noted.
Cramer labeled the situation a “huge opportunity” but cautioned investors to wait before making significant moves. He highlighted that the market reactions have often been misguided since the earnings season commenced, with initial responses being incorrect nearly half the time. Patience, he advised, is key—process the information fully and participate in conference calls prior to making decisions.
The earnings season kicks off on Monday with Ford’s report. Cramer expressed hope for a solid performance that avoids costly warranty issues and minimizes losses in the electric vehicle sector.
On Tuesday, McDonald’s will take the spotlight, and Cramer mentioned the importance of addressing the recent E. coli outbreak linked to the company’s Quarter Pounders, which has caused 75 reported cases across 13 states. The full impact on the fast-food chain’s business remains uncertain.
Cramer anticipates strong earnings reports from Royal Caribbean, Reddit, and PayPal, predicting that all three will exceed expectations and adjust their year-end guidance upwards.
Alphabet’s earnings report is also due after market close on Tuesday. Cramer commented on the stock’s inconsistent performance, stating that while Alphabet is a strong company, it has failed to align with investor expectations under current leadership.
He forecasted that Advanced Micro Devices could gain market share from Nvidia, while Chipotle’s upcoming earnings will be its first since Brian Niccol transitioned to Starbucks. Cramer indicated that announcing a new permanent CEO could positively influence Chipotle’s stock.
Wednesday will feature additional earnings reports, including those from Caterpillar and Eli Lilly. Cramer noted his observations of Caterpillar’s machinery in operation at Chevron’s offshore facilities but was uncertain if a strong performance would meaningfully impact Caterpillar’s already high stock price. Eli Lilly, known for its weight-loss medications, is likely to benefit from positive news highlighted in a recent Stifel report regarding their product’s effects on food stocks.
Meta and Microsoft will follow with their reports later that same day. Cramer expressed confidence in Meta’s potential to continue delivering solid earnings; however, he was less certain about Microsoft’s ability to reassure investors regarding the effectiveness of its AI tool, Copilot. He also pointed to solid expectations for Booking Holdings and DoorDash, which should provide additional insights ahead of the crucial nonfarm payroll data.
The earnings frenzy continues into Thursday with both Apple and Amazon set to report after the closing bell. Despite concerns over the recent iPhone 16 launch, Cramer advised a measured approach with Apple stocks, saying investors should be familiar with the company’s cyclical nature. He also emphasized that Amazon’s operations remain strong, and investors should be cautious not to overreact to any perceived downturns in stock value.
Cramer pointed out two pharmaceutical stocks—Merck and Bristol-Myers—as undervalued, but warned that if Friday’s employment numbers underperform, these stocks might not be wise purchases.
On Friday, the eagerly awaited nonfarm payroll report is set for release, which Cramer underscored as highly significant. Strong employment figures could diminish the likelihood of an interest rate cut in November. Investors often react by selling during fed rate cut cycles, but history suggests that such moments may present buying opportunities. Additionally, oil giants Chevron and Exxon are scheduled to announce their earnings that same day.
Cramer highlighted Chevron’s impressive capital return via dividends and buybacks, despite it being the laggard among its peers. He observed that Exxon seems to be more favored, particularly following its recent acquisition of Hess, even though it may not boast as robust earnings. He recommended shifting investment strategies toward Exxon given the circumstances.
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