My top 10 things to watch Friday, Sept. 11
1. Stocks are still looking at a higher open after consumer inflation, excluding food and energy prices, was in line. The S & P 500 and Nasdaq are looking to break a four-session losing streak. The market odds on a Federal Reserve interest rate hike at next week's meeting are pretty much a lock. Bond yields are flat but remain elevated. Oil down; but WTI is still near $100 per barrel, with Brent at $104.
2. Are managers fearful of telling the story about how hopeless the government bond buying program is? It's been pyrrhic, so far. But in true President Donald Trump fashion, in one of the worst weeks for bonds ever, Treasury Secretary Scott Bessent declares victory. Not political, just truth.
3. Oil remains about $100. Middle East supply issues. But worries are really about a potential breach of our warship protection and subsequent full-out war. International Energy Agency said global supply will drop 5.7 million barrels a day in 2026 — 6% below last year. Previous forecast: down 4% this year.
4. Mortgage rates are starting to crimp housing: 30-year fixed rate loans go 7%. Wells Fargo cut its price targets on homebuilders Lennar, D.R. Horton, Toll Brothers, and PulteGroup; building products firm Masco; toolmaker Stanley Black & Decker; and big-ticket appliance maker Whirlpool. Our exposure to housing: Home Depot. Dependent on rates, which are going the wrong way. We're glad we reduced this position. I updated all our portfolio stocks at yesterday's September Monthly Meeting.
5. Luxury home furnishings retailer RH exceeded estimates on quarterly margins, earnings, and sales. Outlook was not as strong, but shares are up 7.5% anyway. Investors are more focused on the massive earnings beat. This is the company formerly named Restoration Hardware.
6. Oracle shares are jumping roughly 6% as the company's AI cloud numbers blast past expectations. New contracts do not require additional capital. Less worries about debt. Fiscal 2027 outlook was fairly modest. The stock, even with this morning's gains is still down about 17% year to date.
7. I think analysts staying negative on Adobe have this one wrong. Yes, the business is slowing, but it is not negative. It can buy something to return to luster with the new CEO. Reaches 1 billion monthly users. AI-first annual recurring revenue (ARR) growing 150%. Revenue and EPS above expectations. The stock is down 3%.
8. Microsoft plans to triple its data center capacity by 2032 to 38 gigawatts. Great news for fellow Club stock GE Vernova, which is the best way to play this need for compute. GEV makes the natural gas turbines that generate off-grid power for these facilities. Meanwhile, OpenAI considers slowing capacity.
9. RBC analysts said that "AI infrastructure demand driving accelerated growth" at Dell. They started coverage of the enterprise server maker with a buy. Price target $640, implying 25% upside on to of what's already a more than 300% year-to-date gain. Agentic AI demand.
10. Goldman Sachs reiterated Nvidia a buy with a $300-per-share price target. Will anything matter here until Nvidia announces a half-trillion-dollar buyback? I have been encouraging management to do an Apple-style repurchase plan that retired some $877 billion worth of shares during Tim Cook's 15 years as CEO.
