My top 10 things to watch Monday, August 5 1. A global sell-off is underway Monday, with Japan front and center. Too much leverage in Japan? Its Nikkei 225 dropped 12.4% for its worst day since “Black Monday” in 1987 and entered into a bear market. Crypto is not acting like a safe-haven asset, as bitcoin tumbled 13% and at one point dropped below $50,000 each for the first time since February. 2. In the U.S., mega-cap tech names including Amazon , Alphabet and Microsoft are tracking for steep declines at Monday’s open — as are the major stock indexes. Futures for the tech-heavy Nasdaq 100 were down more than 5%. Questions about return on investment for AI spending are now being paired with fears about the health of the U.S. economy. Still, are these kinds of declines justified? The VIX index, often called Wall Street’s fear gauge, more than doubled Monday to over 52, reaching levels last seen during pandemic-related volatility in 2020. That’s too high. 3. There are a lot of problems in the market that we still need to work through, as I told Investing Club members in my Sunday column . Even after back-to-back declines Thursday and Friday, stocks did not end last week in oversold territory. But we will be Tuesday if the market stays down like this. We have been building our cash position so we can take advantage of sell-offs like this. 4. Nvidia is down big, likely due to both the broader sell-off and a media report that said the launch of its next-generation Blackwell chip platform could be pushed back by at least three months. Is it really delayed? In a statement to Reuters , a spokesperson for the Club holding and leading AI chipmaker said: “As we’ve stated before, Hopper demand is very strong, broad Blackwell sampling has started, and production is on track to ramp in the second half.” I don’t think there’s been slippage from the original shipment schedule. 5. If you really think there’s a delay to Blackwell, then go buy shares of fellow Club name Advanced Micro Devices . As its earnings report last week made clear, the chipmaker has a ton of business for its AI chips that launched in late 2023, with new iterations on the way, too. Let me be clear, though: I don’t believe there is a delay for Nvidia’s Blackwell. 6. Apple also is tracking for outsized losses Monday. Compounding the general sell-off pressures: Warren Buffett’s Berkshire Hathaway disclosed over the weekend that it sold nearly half its massive stake in the iPhone maker. Given Buffett’s reputation, the move is being viewed as a good reason for other investors to sell Apple, a longtime Club name. I won’t guess why Berkshire downsized the position, but Buffett’s endorsement had always been seat-of-the-pants. 7. Kellanova shares traded up into the sell-off last week, which was very odd. Now, The Wall Street Journal is reporting that privately held candy giant Mars is in advanced talks to buy the snack maker, which was spun out of cereal firm Kellogg in October 2023. The deal could value Kellanova at roughly $30 billion, the Journal reported. 8. Shares of Eli Lilly are under pressure again Monday and on track to open at levels last seen in May, erasing all of their summer gains. While drug stocks are generally seen as defensive, Eli Lilly is not trading that way. Investors have grown worried about emerging competition in the fast-growing GLP-1 market to treat diabetes and obesity from the likes of Roche and Viking Therapeutics . But I don’t think the dynamics have really changed, given the expensive and complex manufacturing process for these drugs. That acts as a moat for Lilly and Wegovy maker Novo Nordisk . 9. Bernstein lowered its price target on Boeing to $207 a share from $222, but maintained its buy-equivalent rating on the troubled plane maker after its earnings report. Aerospace veteran Kelly Ortberg starts as Boeing’s new chief executive Thursday. Amid all Boeing’s challenges, the question for me is the cash flow. Is there enough? 10. Club names DuPont and Linde received price-target boosts after reporting earnings last week. RBC upped its price target on DuPont to $102 a share from $87, noting its margins are expanding and it’s settling its PFAS liabilities. For Linde, Bank of America went to $516 a share from $495 and said the industrial gas giant’s guidance is still conservative. Sign up for my Top 10 Morning Thoughts on the Market email newsletter for free (See here for a full list of the stocks at Jim Cramer’s Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. 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My top 10 things to watch Monday, August 5
1. A global sell-off is underway Monday, with Japan front and center. Too much leverage in Japan? Its Nikkei 225 dropped 12.4% for its worst day since “Black Monday” in 1987 and entered into a bear market. Crypto is not acting like a safe-haven asset, as bitcoin tumbled 13% and at one point dropped below $50,000 each for the first time since February.
2. In the U.S., mega-cap tech names including Amazon, Alphabet and Microsoft are tracking for steep declines at Monday’s open — as are the major stock indexes. Futures for the tech-heavy Nasdaq 100 were down more than 5%. Questions about return on investment for AI spending are now being paired with fears about the health of the U.S. economy. Still, are these kinds of declines justified? The VIX index, often called Wall Street’s fear gauge, more than doubled Monday to over 52, reaching levels last seen during pandemic-related volatility in 2020. That’s too high.
3. There are a lot of problems in the market that we still need to work through, as I told Investing Club members in my Sunday column. Even after back-to-back declines Thursday and Friday, stocks did not end last week in oversold territory. But we will be Tuesday if the market stays down like this. We have been building our cash position so we can take advantage of sell-offs like this.
