Don’t trust any stock rally unless oil prices, bond yields fall, Jim Cramer warns
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 Wednesday’s key moments. Oil, bonds weigh on stocks Watch Constellation Brands Oracle on deck 1. Higher oil prices, bond yields weigh on stocks Stocks fell Wednesday morning, with the market on track for back-to-back days of declines. The S & P 500 was down 0.68%, while the Nasdaq Composite lost roughly 0.9%. Meanwhile, bond yields climbed higher, with that that of the 10-year Treasury at nearly 4.3%, as oil prices remained supported by Saudi Arabia’s decision Tuesday to extend production cuts by 1 million barrels a day. West Texas Intermediate crude, the U.S. oil benchmark, was hovering just under $87 a barrel. As Jim Cramer tweeted earlier Wednesday: “It’s September, do not trust any [stock] rally unless the yield on the 10 year drops and oil loses at least $3.” Higher oil prices are starting to impact corporate earnings, with major U.S. airlines like Southwest Airlines (LUV) warning about a spike in fuel costs . 2. Watch Constellation Brands TD Cowen on Wednesday upgraded Club holding Constellation Brands (STZ) to outperform, from market perform, while raising its price target on the stock to $300 a share, up from $240. Cowen points out accelerating beer growth, which should support the Modelo beer maker’s margin outlook. The firm also notes Constellation’s portfolio optionality, arguing it could sell its wine and spirits businesses to boost stock buybacks and its expand its multiple. Shares of Constellation Brands were trading up 0.62% Wednesday morning, at roughly $259 apiece. 3. Oracle on deck More analysts are writing positive checks ahead of Club holding Oracle ‘s (ORCL) quarterly results on Sept. 11. Guggenheim said it expects cloud revenue at the high end of guidance, supported by partner checks, while reiterating the software firm as a “best idea.” Mizuho said it expects a strong quarter and believes the the company’s Sept. 21 analyst day could be a near-term catalyst for the stock. Oracle stock was down around 0.56% in midmorning trading, at $123.27 a share. (Jim Cramer’s Charitable Trust is long STZ, ORCL. 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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