1. Club holding and Dow stock Johnson & Johnson (JNJ) first-quarter beat on earnings-per-share and revenue. Shares flat. EPS: $2.68 versus $2.50 expected on revenue of $24.75 billion versus $23.67 billion expected. The company is set to split two this year. Consumer, to be called Kenvue, saw Q1 sales up 7.4% versus up 1.4% expected. Sales at pharma and medtech, to keep J&J name, rose 4.2% and 7.3% in Q1, respectively, also blowing away estimates. The company raised full-year adjusted EPS and operation sales.
2. Goldman Sachs (GS) Q1 investment banking revenue fell 26% and advisory down 27%. Headcount down 6% from the prior quarter. Managed to beat on Q1 EPS: $8.79 versus $8.10 expected. Missed on revenue: $12.22 billion versus $12.79 billion expected. Top decile fixed income, currency and commodities (FICC) quarter. FICC only down year over year due to impossible compares. Equities beat. Net interest income (NII) miss and down 14% from a year ago. Dow stock Goldman down nearly 4%.
3. Bank of America (BAC) shares up more than 2%. Just a very quarter with tremendous sales and trading and the lowest bad loans in 50 years. Solid beat. EPS: 94 cents versus 82 cents expected. Revenue: $26.39 billion versus $25.13 billion expected. Net interest income beat, up 25% year over year.
4. The Dow, the S&P 500 and the Nasdaq are set to open higher on strong J&J and BofA earnings. Netflix (NFLX) reports quarter after the closing bell Tuesday. March housing starts and building permits missed expectations. However, Chinese GDP grew at 4.5% in the first quarter, faster than anyone expected, as most Covid restrictions end. The world's second-largest economy grew 2.9% in the fourth quarter of 2022.
5. Evercore ISI adds Club holding Starbucks (SBUX) to "tactical outperform" list. Shows you Chinese mobility is coming back. China subway traffic up. Buying coffee on the way. Expect accelerating U.S. transactions. New CEO Laxman Narasimhan doing a good job already.
6. The last bear on Nvidia (NVDA) throws in the towel. HSBC doubled-upgraded the Club stock to buy from reduce (sell) rating. The analyst: "Shocked by pricing power" of Nvidia's powerful artificial intelligence semiconductors.
7. Wolfe Research upgrades Club holding Emerson Electric (EMR) to outperform from peer perform (buy from hold). The analysts say EMR's this acquisition of National Instruments (NATI) could be the end of the underperformance. We agree this could be much better news.
8. Wells Fargo upgrades Club name Danaher (DHR) to overweight from equal weight (buy from hold). Increases price target to $285 per share from $275. Overblown pessimism. Time to buy.
9. For Merck (MRK), I think this Prometheus Biosciences (RXDX) acquisition for $10.8 billion will prove to be a bargain. I believe it will within two years really hurt Abbvie (ABBV), which has similar drugs, Rinvoq and Skyrizi, that will really be slammed. Merck to get $17 billion in autoimmune sales very quickly.
10. Charles Schwab (SCHW), multiple price target lowering but, as Deutsche Bank says, the downside much more limited. I think there could be a squeeze here because deposit losses as large as they were, tapered off pretty quickly.
(Jim Cramer's Charitable Trust is long JNJ, SBUX, NVDA, EMR, DHR. See here for a full list of the stocks.)
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