Technology cannot find the bottom.Industrials, consumer goods stocks rebound
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Many businesses were clocked up last week. Many industries saw weakness, from media to gambling to cloud computing to software sales. It’s been a year since the Nasdaq closed at an all-time high, so the pain in the tech sector seems to know no bounds. (To be clear, I’m not talking about Apple’s (AAPL) release from Sunday night on the iPhone 14 Pro and Pro Max issues due to production showdowns due to Covid restrictions in China.) At the same time. , the industrial sector continues to see impressive growth. Although November got off to a rocky start, the Dow Jones Industrial Average rose nearly 14% in October, its best month since 1976. Some liked using rails and showed very strong numbers. Some people like to use airlines, they are as powerful as I can remember. But I like to soak in the wisdom of Nick Akins, who happens to be the CEO of American Electric Power, the largest power transmission company in the United States. When I interviewed him for “Mad Money” last week, I was shocked to learn that his business is accelerating with great force in chemicals, paper, primary metals and most importantly oil and gas extraction. I received This is his quintessential snapshot of the American economy in 2022, and it seems that no matter what Federal Reserve Chairman Jerome Powell does, he can’t control that economy. Dichotomy is everywhere. We are seeing strong growth in manufacturing and strong growth in travel and leisure and all that goes along with it. However, in the technology sector, especially in areas related to software and semiconductors, hiring freezes and layoffs are common. Combining the strengths of the industry and travel, and the spending that goes with it, leads to higher prices for consumers on the move and higher spending once they reach their destination. Mastercard (MA), Visa (VA) and American Express (AXP) all show that Americans are traveling and traveling less often than they used to. Once again, I think it has something to do with behavior after the Covid pandemic. We know that Airbnb (ABNB) CEO Brian Chesky tried to track down spending on luxury homes in the fourth quarter. From my own digging after talking to him about “Mad Money,” I find nothing far from the truth. This has been confirmed by Marriott (MAR) and Expedia (EXPE). No wonder travel, leisure and entertainment employment continues to do well. Nothing really slows this juggernaut, though. A Zillow (Z) rep is so clear that after seeing the Fed’s incredible interest rate hikes, it’s the worst time to buy a house. Powell noted the “delay” in his legendary 2 p.m. I know. But there is no delay in housing. We also heard some discouraging words about cars from the incredibly challenging Ernie Garcia, CEO of Carvana (CVNA). He sees tough times coming for used cars. His negative comments sent his stock price down nearly 39% on Friday. Many fear he doesn’t have the capital to sustain the pace of sales and stock he envisions. But we don’t see any weakness that would depress the industry’s powerhouses. Carvana’s and Zillow’s calls have not resonated as auto and housing stocks have already fallen. This goes back to the tech I heard CEOs repeating the terms “macroeconomic uncertainty” and “facing headwinds” almost unanimously on a conference call. Unlike housing and auto stocks, these hit the chin every time. Some of the drops we’ve seen have been incredibly exaggerated, notably Atlassian (TEAM) where he fell nearly 29% on Friday and Cloudflare (NET) his 18%. Both are excellent companies. But I’m not used to seeing companies of this quality experience slowdowns. Because it helps companies digitize, automate and develop new software. All the buzzwords we are used to. He heard the same from Appian (APPN), another company that offers enterprise software solutions, and another stock that he lost more than 18% on Friday. Heaven knows that they were made during the good times. I wonder if someone thought they would raise it? Maybe so, but I bet those who own these stocks and the like don’t see the slowdown coming until last week. They abandoned these stocks at a record pace. But the sale wasn’t just limited to companies unaccustomed to stumbling. Shares of Twilio (TWLO), which makes leading customer management and retention software, surged again and then plunged again, dropping nearly 35% on Friday. Of course, these stocks are very popular stocks, and the creators of Exchange Traded Funds (ETFs) would put these basket after basket and link them all together. Even the best, like ServiceNow (NOW), brought a big surprise and his 13% pop on Oct. 27, but couldn’t stand the onslaught, leaving all its gains and subsequent returned some. For example, these stocks have been derisked, as opposed to cars and homes, which have not been digitized, so they see little, if not a full rally, down. -The end of the cycle is still in them. Digging into software failures to see what they mean about headwinds and how they’re impacting businesses provides data that’s still concerning for all technologies. The first is the issue of what is called “top of the funnel,” which means that your attempts to acquire customers are lagging behind. Acquisition of new customers simply takes time or “longer” is the watchword now. Existing customers are retained at a normal rate, so retention is not an issue. But it seems to be getting harder and harder to get them to do more. So-called land and expansion has not happened. Fewer people land and not much to expand. I have a customer who is holding me back. Fintech is not spending. Reasonable given the amount they have already spent. Crypto companies are in trouble, and the problem extends to a beleaguered media sector. But I don’t think there are enough companies needing, funded, or publicly traded for this software. At the same time, these once-thriving tech companies that were watching an ever-expanding funnel somehow didn’t seem to see this coming. and hired in the summer. Many companies have more employees than ever before. Their reaction has mostly been to freeze hiring, but some have started laying off personnel. However, the latter is extremely rare. That won’t be the case next quarter, believe me. For me, all these cuts stick to stocks in companies that forecast bearishness, soft goods companies that will benefit immensely when the dollar struggles after falling raw material costs and an incredible rally next year. That’s it. It actually stays fluid and influences consumers who like to spend on small luxuries like cosmetics, cold lattes like Estée Lauder (EL) or Starbucks (SBUX). Now, I’ve been focusing on the semifinals repeatedly and I know they need stronger PCs and servers, games and mobile phones.If you see them stronger let me know. please. I don’t But this software sale is a reminder of the 2001 failure. The only difference is that many of these companies are profitable. they just don’t want to be. That’s changing now, but not fast enough to handle the moment we’re in pain and the series of stocks that haven’t bottomed out yet. As usual. Mergers and bankruptcies are only for those who have money in the bank, and the most powerful customers end up where the Fed finishes tightening and customers come back to life. (Jim Cramer’s charitable trusts are Long AAPL, GOOGL, EL, and his SBUX. For a full list of shares, see here.) As a subscriber to Jim Cramer’s CNBC Investing Club, Jim Receive trade alerts before they place trades. After Jim sends a trade alert, he waits 45 minutes before buying or selling stocks in his charitable trust portfolio. If Jim talks about his stock on his CNBC TV, he will wait 72 hours after issuing a trade alert before executing the trade. The investment club information above is subject to our Terms of Use and Privacy Policy, along with our disclaimer. No fiduciary duty or obligation exists or is created by your receipt of any information provided in connection with The Investment Club. No specific results or benefits are guaranteed.
Jim Cramer at the NYSE on June 30, 2022.
Virginia Sherwood | CNBC
Many businesses were clocked up last week. Many industries saw weakness, from media to gambling to cloud computing to software sales. The pain in the tech sector seems to know no bounds. Nasdaq It closed at an all-time high. (To be clear, I’m not talking about apple (AAPL) iPhone 14 Pro and Pro Max Issues Released Sunday Night Covid restrictions in ChinaThis is because they are supply, not demand. )
https://www.cnbc.com/2022/11/06/jim-cramer-tech-cant-find-a-bottom-industrial-consumer-stocks-bounce.html Technology cannot find the bottom.Industrials, consumer goods stocks rebound
