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Cramer’s week ahead: 3 events will determine if the market’s bad momentum will continue in October

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CNBC’s Jim Cramer on Friday said that 3 key events next week will determine if the nightmarish month for the stock market will continue into October.

Here are the events:

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  • The release of the non-farm labor report Friday. Cramer said he expects it to show inflated hiring and wages.
  • Two speaking engagements by Cleveland Fed President Loretta Mester, whom Cramer believes is the primary inflation hawk on the Federal Open Market Committee. “She wants to protect us … from high inflation, even if that means raising interest rates into a recession,” he said.

The S&P 500 closed out its worst month since March 2020 on Friday. The Dow Jones Industrial Average and the Nasdaq Composite fell 8.8% and 10.5%, respectively, for the month.

While it’s likely that Mester and the report will both bring bad news, investors can protect themselves from the market wreckage if they stick to a solid game plan, according to Cramer. 

“Own high-quality companies with good balance sheets and high dividends that will benefit from a decline in inflation, because that’s what’s going to happen,” he said.

He also previewed next week’s slate of earnings. All earnings and revenue estimates are courtesy of FactSet.

Wednesday: Helen of Troy, Lamb Wesson

Helen of Troy

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  • Q2 2023 earnings release before the bell; conference call at 9 a.m. ET
  • Projected EPS: $2.21
  • Projected revenue: $521 million

Lamb Weston Holdings

  • Q1 2023 earnings release at 8:30 a.m. ET; conference call at 10 a.m. ET
  • Projected EPS: 79 cents
  • Projected revenue: $1.21 billion

We saw this from Nike last night – all that happens is the downside gets accentuated as the upside just treads water or goes marginally higher. That’s what I expect will happen with both when they report,” Cramer said.

Thursday: Constellation Brands, Conagra Brands, McCormick, Norwegian Cruise Line Holdings

Constellation Brands

  • Q2 2023 earnings release at 7:30 a.m. ET; conference call at 10:30 a.m. ET
  • Projected EPS: $2.81
  • Projected revenue: $2.51 billion

He said he expects the company’s top line to be “extraordinarily good.”

Conagra Brands

  • Q1 2023 earnings release at 7:30 a.m. ET; conference call at 9:30 a.m. ET
  • Projected EPS: 52 cents
  • Projected revenue: $2.85 billion

The company needs to grow its business, according to Cramer.

McCormick

  • Q3 2022 earnings release at 6:30 a.m. ET; conference call at 8 a.m. ET
  • Projected EPS: 71 cents
  • Projected revenue: $1.6 billion

Cramer said that the company’s earnings call will simply reinforce its preannounced weaker-than-expected third-quarter earnings and full-year outlook cut earlier this month.

Norwegian Cruise Line

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  • Investor meeting at 10 a.m. ET

Cramer said that he expects Norwegian to be performing better than competitor Carnival, which struggled with higher costs in its latest quarter, but it’s unclear whether that will be enough to help Norwegian’s stock.

Friday: Tilray Brands

  • Q1 2023 earnings release at 7 a.m. ET; conference call at 8:30 a.m. ET
  • Projected loss: loss of 5 cents per share
  • Projected revenue: $169 million

He predicted that the company will make a “bold” statement about the legalization of cannabis, and said he’s pondering whether this could be a great speculative stock to own during the Biden administration.

Disclosure: Cramer’s Charitable Trust owns shares of Constellation Brands.

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Manhattan renters face sticker shock with average rent at $5,200

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An “Apartments For Rent” sign outside a building in the East Village neighborhood of New York, U.S.

Gabby Jones | Bloomberg | Getty Images

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Manhattan rents rose 2% in November, dashing hopes that prices would cool and forcing many renters to give up their leases or downsize, according to brokers.

The median rent for a Manhattan apartment in November hit $4,033, up from $3,964 in October, according to a report from Douglas Elliman and Miller Samuel. The average rent, which is often skewed by luxury sales, fell slightly for the month but is still up 19% over last year, hitting $5,249 in November.

The increases continue to defy predictions that New York’s sky high rents would fall after the summer and give renters some relief after rents hit all-time records. While rents are easing in many parts of the country, New York’s rents remain stubbornly high and the number of unrented or empty apartments remains low.

“Rents are not coming down as quickly as many would hope,” said Jonathan Miller, CEO of Miller Samuel.

The rise in New York rents also adds pressure to overall inflation, since rents are a large component of inflation indexes and New York is the nation’s largest rental market.

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Manhattan rents are so high that many tenants have started to balk at the prices — either moving out of the city or finding smaller, less expensive rentals. The number of new leases signed in November plunged 39% over October, marking the biggest decline since the start of the pandemic in 2020, according to Miller.

Brokers and real-estate experts say landlords over-reached when they started renewing the leases signed in 2020 and 2021, often demanding rent increases of 20% or more. With landlords typically requiring renters to have annual income of 40 times the monthly rent, the rising median rents have stretched many tenants to the breaking point.

“There is some gridlock,” said Bess Freedman, CEO of Brown Harris Stevens. “In 2021, rents took off like a rocket and now tenants are stuck. People aren’t going to sign new leases at these prices, they’re just too expensive. Landlords need to start getting more reasonable.”

Freedman said one of her friends faced a rent increase of 30% with a recent lease renewal. “She felt like she was being gouged,” Freedman said.

Vacancy rates remain low, putting little pressure on landlords to lower rents anytime soon. The vacancy rate in November was 2.4% — still below the historical norm in Manhattan of about 3%, according to Miller Samuel.

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There are some early signs that landlords may start capitulating in 2023. The number of landlord concessions — which may include a month of free rent and other deals — rose to 16% in November from 13% in October. Real-estate experts say the big drop in new leases, if it continues, will eventually force landlords to meet renters at a lower price point.

Joshua Young, executive vice president and managing director of sales and leasing at Brown Harris Stevens, said landlords were overly bullish expecting rent increases of 20% or more, and many are now starting to lower prices or adding more concessions to keep their apartments filled.

“A lot of landlords are getting stuck with inventory so and they’re not getting their increases, so they’re reducing price,” he said.



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Cramer’s lightning round: AGNC Investment is not a buy

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Paramount Global: “Too cheap to believe. … I don’t know where it bottoms, but it sure isn’t close to the top.”

Hasbro Inc: “I don’t like the earnings, and I think that Mattel‘s actually cheaper.”

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Citigroup Inc: “The book value is so different from where the common stock is, the price. Something is very wrong there.”

Cramer's lightning round: AGNC Investment is not a buy

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Jim Cramer says not to fear bearish economic talk from bank CEOs – there’s no ‘financial apocalypse’

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Jim Cramer says not to fear bearish economic talk from bank CEOs
CNBC’s Jim Cramer on Wednesday told investors that they should take gloomy economic commentary from bank executives with a grain of salt. 

“Don’t panic the next time you hear one of these bank CEOs say something terrifying — they don’t know the impact of their words,” he said, adding, “Sure, we’ve got plenty of problems, but they’re not financial apocalypse problems.”

The S&P 500 slipped for a fifth trading session on Wednesday as investors mulled the possibility of a recession.

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Adding to investors’ worries, JPMorgan Chase CEO Jamie Dimon said on Tuesday that inflation is eating away at consumers’ pocketbooks and could create a recession. 

The chief executives of Bank of America and Wells Fargo also warned that the economy is slowing down as Americans cut back on spending.

“Memo to America’s bankers: Don’t try to frighten us. Don’t try to get us to sell everything,” Cramer said. “Don’t be Grinches telling us a hurricane could be coming.”

He urged the chief executives to remind investors of what’s going right in the Fed’s fight against inflation, and gave an example of what he believes one of the CEOs should have said: 

“There will come a day when the Fed will be done tightening, although that may be when the S&P 500 is a good bit lower. But I don’t know if I want to take the chance of possibly missing the [next] big rally. Hey, maybe buy small,” he said.

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Disclaimer: Cramer’s Charitable Trust owns shares of Wells Fargo.

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