Jim Cramer’s top 10 things to watch in the stock market Thursday

1. The S&P 500 and Nasdaq, both on seven-session winning streaks, were looking lower after more records. The June consumer price index year over year came in around its lowest inflation level in more than three years. Stock futures were initially higher on the CPI numbers but later fell on some worries about deflation.
2. Fed whisperer Nick Timiraos from The Wall Street Journal makes it clear that central bank chief Jerome Powell is pivoting and coming around to the idea that it’s time to start cutting rates. Lower inflation without a significant slowdown is job one. Powell is getting close to mission accomplished.
3. Are shareholders of Costco getting a goodbye present from Rich Galanti, who stepped down as CFO but is still helping with the transition? The Club name decided to increase membership fees for the first time since 2017. It’s a second catalyst for the stock that we’ve been waiting for since the special dividend was announced in late 2023. Yes, I will renew my membership for one of the greatest bargains on Earth. It’s a good sign on inflation: Costco waited until it thought it was not an issue. As for June sales, Costco reported a 7.4% increase to $24.48 billion. E-commerce sales soared more than 18%. Lots of price target increases pointing to strong core comps and the membership fee hike.
4. PepsiCo reported mixed quarterly numbers on softer demand in North America for its drinks and snacks. The company also cut its outlook. Quaker recall was drag. Numbers led by Pepsi, not Frito Lay. This could be a frugal consumer or GLP-1 weight loss drugs from Novo Nordisk and Club name Eli Lilly, or it could be both factors.
5. Chill’s and Maggiano’s company Brinker is still crushing it. That’s because the other guys raised prices too much. CEO Kevin Hochman told me on “Mad Money” the brands are delivering value every day. Morgan Stanley lowered its price target on McDonald’s to $300 per share from $312, citing near-term soft trends. The analysts said a possible miss is “well understood.”
6. Delta matched quarterly expectations on earnings per share but missed on revenue. The airline maintained its full-year guidance. Big hit on Olympics from travelers avoiding Paris this summer? However, people do want to go to Europe see Taylor Swift in concert.
7. Wells Fargo raised its Advanced Micro Devices price target to $205 per share from $190 and kept its overweight buy rating. People like AMD’s deepening internal open-source software. For the Club, we own Nvidia and Broadcom, which got a price target boost to $2,400 per share from $1,650 at Rosenblatt. The analysts maintained their buy rating on Broadcom. Rosenblatt sees upside to Broadcom’s fiscal 2024 recently increased sales target. Nvidia and five other Club tech stocks dominate the market, and we think they should.
8. Despite setbacks, Pfizer is pushing ahead with its experimental once-per-day weight loss pill. The drugmaker plans additional early-stage trials in the second half of the year. Pfizer is trying to break into the GLP-1 market dominated by Novo Nordisk‘s Ozempic and Wegovy and Eli Lilly‘s Mounjaro and Zepbound.
9. Piper Sandler raises its Hims & Hers price target to $18 per share from $16. TD Cowen goes to $25 from $15. I really like this one on GLP-1s. Compounded formulations are temporarily allowed because of the shortages of the branded drugs. Hims & Hers said it will eventually offer the brands when the shortage is over.
10. Piper Sandler cut its Estee Lauder price target to $108 per share from $141 but kept its neutral rating. The analysts said the biggest risk is whether a wary consumer is willing to pay for luxury. The Club stock has been just awful as it struggles in China.

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