Jim Cramer’s daily rapid fire looks at stocks in the news outside the CNBC Investing Club portfolio. T-Mobile : The wireless carrier announced plans to pay $4.4 billion to buy most of U.S. Cellular . “Who am I to doubt [T-Mobile CEO] Mike Sievert? They got some growth. So stock going higher,” Jim Cramer said Tuesday. T-Mobile was up just under 1%. U.S. Cellular rose more than 1%. Viking Holdings : The cruise line operator’s stock saw lots of analyst initiations. The company went public on May 1. “They don’t want kids, and they don’t want gambling,” and that’s the appeal of Viking, Cramer said. Airbnb : Shares of the short-term rental company were upgraded to a buy-equivalent outperform rating at Wedbush. “I felt that the quarter was excellent. The app is really good. I disagreed with the market. It’s a hard thing to do. Wedbush is basically giving you the bull case,” Cramer said. Shares dropped 7% after its earnings report on May 9 and were still down $10 since the Friday’s close. Huntington Bancshares : The regional bank stock was upgraded to a buy-equivalent overweight rating at JPMorgan. “I thought that the upgrade made very little sense. But I recognize that Huntington Bancshares is in a good state,” Cramer said. Texas Instruments : CNBC reported that activist investor group Elliott Management has taken a $2.5 billion stake in the chipmaker. Cramer said Texas Instruments didn’t make the right moves with customers and shareholders and that’s why Elliott moved in.
A group of 51 stocks in the benchmark equity index swept to record finishes on Tuesday, the most since April 20, 2022, according to a tally from Dow Jones Market Data.
Equities have been in a year-end rally mode, driven higher by tumbling benchmark yields that finance much of the U.S. economy and expectations of coming interest-rate cuts.
The 10-year Treasury rate BX:TMUBMUSD10Y
fell to 4.2% on Tuesday from a high of about 5% in October.
The Dow Jones Industrial Average DJIA
on Tuesday ended at its third-highest level on record, while the S&P 500 index SPX
and Nasdaq Composite Index COMP
added to a string of new closing highs for 2023. The Dow finished 0.6% away from its record close logged almost two years ago, while the S&P 500 was only 3.2% below its close from the same period, according to Dow Jones Market Data.
The push higher for stocks followed inflation data for November that showed price pressures continued to ease from peak levels, but still were above the Fed’s 2% annual target.
The consumer-price index pegged the annual rate of inflation at 3.1%, down from 3.2% in October, with the “last mile” of inflation expected to be the hardest part to tame.
Investors now will be focused on Wednesday’s Federal Reserve decision. Short-term interest rates are expected to remain unchanged at a 22-year high, but the central bank is expected to update its “dot plot” forecast of rates over a longer time horizon.
“Although the market will focus on the timing of rate cuts, we suspect Chair Powell will be keen to strike notes of caution to avoid financial conditions easing too much further to ensure the Fed continues to see encouraging progress on inflation,” said Emin Hajiyev, senior economist at Insight Investment, in emailed comments.
Elon Musk’s SpaceX is known for its frequent launches, which now dominate the space industry. But thesatellites that the rockets send to space are just as important for the company as the launches. Starlink is SpaceX’s answer to providing global, high-speed internet coverage using a network of thousands of satellites buzzing around the planet in a region known as low Earth orbit (LEO), about 342 miles above the Earth’s surface.
SpaceX launched its first batch of Starlink satellites in 2019. Adoption of the service has ballooned since then. The company has said Starlink has more than 2 million active customers and is available on all seven continents and in over 60 countries.
“This growth is uncharacteristic in the sense of its magnitude. Whereas prior satellite service providers have ramped up to anywhere at most between 500,000 to a little bit over a million subscribers. And this has taken, you know, a ten-year period, Starlink’s race to 2 million subscribers has taken only the better part of two years,” says Brent Prokosh, a Senior Affiliate Consultant at Euroconsult.
A Falcon 9 rockets launches a Starlink mission on January 20, 2021.
SpaceX
Experts estimate that the global market for consumer satellite services, including TV, radio, and broadband internet, was worth over $92 billion in 2022. And Starlink could be in a good position to capture a big piece of the market. Although initially conceived for the consumer segment, Starlink’s offerings have expanded to serve enterprise customers including in the maritime and aviation industries.
“Starlink’s importance to SpaceX overall as a company is imperative. Euroconsult estimates that, optimistically, by the end of 2023, this business of Starlink could represent upwards of 40% of SpaceX’s overall business. This total would be somewhere in excess of $3 billion generated from Starlink,” Prokosh says.
Starlink has been praised for its ability to connect remote parts of the world that would otherwise not have access to reliable internet. The service has also become indispensable in areas hit by natural disasters, and, more recently, during times of conflict, particularly in the Russia-Ukraine war.
“The big benefit of Starlink and how it’s being used in Ukraine today is communications. It’s providing a pathway for the military, for civilians to stay connected to the outside world. It allows a pathway for the military to communicate with each other and to provide command and control direction to their forces,” says Kari Bingen who is the Director of the Aerospace Security Project at the Center for Strategic and International Studies.
Ukrainian forces set up Starlink satellite receivers to provide connection for civilians at Independence Square after the withdrawal of the Russian army from Kherson to the eastern bank of Dnieper River, Ukraine, on November 13, 2022.
Metin Atkas | Anadolu Agency | Getty Images
But Starlink’s growing influence is garnering condemnation from critics who say Musk is meddling in geopolitics. Meanwhile, the scientific community has its own concerns.
“The astronomical community got concerned about the first launch of the Starlink satellite a few years ago because the projection of the full constellation of several tens of thousands of satellites in low Earth orbit was immediately seen as an interference to both the optical observation and to radio observation,” says Piero Benvenuti, who is the Interim General Secretary, International Astronomical Union.
To find out more about Starlink’s rapid expansion and if it can continue, watch the video.
As corporate earnings season reaches its peak in the coming weeks, Morgan Stanley advises traders to look for certain stock plays. A third of the S & P 500 companies are set to announce earnings this week, as well as 40% of the Dow Jones Industrial Average. Investors will be keeping a close eye on mega-cap tech names Alphabet, Meta and Microsoft, which have all seen shares surge amid the tech rally this year. Oil giants Chevron and ExxonMobil are also set to report their quarterly results, as well as major telecom companies and consumer names. Morgan Stanley chief equity strategist Mike Wilson said in a Monday note that he expects “performance dispersion to rise” as more companies report their earnings. Wilson recommends investors choose stocks that exhibit high earnings quality, strong free cash flow generation and improving earnings revision. The firm screened for stocks that fell under the following criteria: Top 1,000 U.S. stocks by market cap Top 2 quintiles of earnings stability Top 2 quintiles of earnings quality Overweight rating by the firm’s research analysts Take a look at some of the names on the list, and where they could be headed next. Health-care names UnitedHealth Group , Humana and Elevance Health all appeared on Morgan Stanley’s screen. UnitedHealth Group, which is the largest health-care company in the U.S., is also one of the names listed on the 30-stock Dow. The company’s second-quarter results beat analysts’ expectations on top- and bottom-lines. Investor sentiment was further boosted by the company raising the low-end of its full-year adjusted earnings outlook. To be sure, shares are still down 4% year to date, underperforming the Health Care Sector SDPR Fund , which has traded near the flat line in 2023. T-Mobile , another one of Morgan Stanley’s picks, will be releasing its quarterly results Thursday. Shares have only gained 1% in 2023, lagging behind the broad market index’s 18.3% rise over the same period. Nonetheless, more than 90% of analysts covering the stock rate it a buy, according to Refinitiv. The consensus price target on shares implies nearly 26% upside from Friday’s close. Automaker General Motors also made the list. The company is set to report earnings Tuesday before the bell. Wall Street will be looking to see if GM can continue its outperformance from the prior quarter, during which it posted an earnings beat and raised its 2023 guidance. Analysts polled by Refinitv estimate GM’s earnings have jumped more than 60% in the second quarter. The stock has gained more than 16% this year. Household products manufacturer Colgate-Palmolive , another one of Morgan Stanley’s picks, will announce earnings at the end of this week. Colgate-Palmolive has recouped some of its losses from the start of 2023 , but is still trading down 2% year to date. Analyst Dara Mohsenian upgraded shares to overweight from equal weight in January, and also named it his top pick in the household and personal care industry. Disclosure: Comcast is the parent company of NBCUniversal and CNBC. —CNBC’s Michael Bloom contributed to this report.
In this photo illustration, the Cox Communications logo is displayed on a smartphone screen.
Rafael Henrique | SOPA Images | Lightrocket | Getty Images
Cox Communications is ringing in the new year with the official launch of its mobile business.
The privately held cable and internet operator plans to announce the national launch of Cox Mobile Thursday at the Consumer Electronics Show in Las Vegas.
Cox has trailed peers like Comcast, Charter Communications and Altice USA, which started offering mobile service to their customers in recent years and have been adding customers at a fast clip.
Like Comcast and Charter’s services, Cox Mobile will only be available to new and existing customers. Cox has 7 million customers in 18 states, and has started quietly offering mobile service in certain markets in recent months.
Cable operators began offering mobile service with the aim of giving customers another reason not to leave their broadband plans. This holds true now more than ever, as profitability for these business units is in sight.
“I think now they’re reusing wireless as a way to reinforce their broadband business. There’s not much profitability in it yet, but that’s not their concern. The concern is holding on to broadband customers,” said John Hodulik, an analyst at UBS.
Although wireless companies like AT&T, Verizon and T-Mobile hold the large bulk of wireless customers in the U.S., Comcast and Charter’s mobile businesses have been growing at a faster rate due to cheaper and more flexible plans.
Charter’s Spectrum Mobile offers a $30 unlimited data plan, or $14 by the gigabyte of internet used in the month plan. Similarly, Comcast’s Xfinity Mobile starts at $30 for unlimited data, or $15 by the gigabyte.
The cheaper options stem from their ability to rely heavily on home broadband Wi-Fi and hotspots for data usage. When their mobile customers leave Wi-Fi and rely on a network, they’re offloaded to the cable companies’ partner operator — Verizon for both Comcast and Charter — still giving the wireless company a piece of the pie.
Cox Mobile will offer similar plans, unlimited at $45 a month or $15 by the gig. Cox is also reportedly using Verizon as its network partner, which the company is expected to confirm at Thursday’s event.
A wrench was thrown in Cox’s plans to launch its mobile business when T-Mobile sued the company in 2021, saying Cox was obligated to pursue a partnership with them. Earlier this year, a Delaware court judge reportedly ruled in Cox’s favor.
Charter said it had 4.7 million wireless customers as of Sept. 30, while Comcast said it reached 5 million.
“We started off with this reimagined mobile service because we knew customers would spend a significant amount of time on Wi-Fi,” said Danny Bowman, chief mobile officer at Charter, adding Spectrum Mobile customers spend about 85% of their time on Wi-Fi.
“By keeping the mobile package simple, we have exponential growth,” Bowman added. Charter and Comcast also allow customers to bring their own devices, an option Cox won’t yet offer. Currently, customers must purchase Samsung phones through Cox for service.
Smaller cable operators are also seeing the value in offering a mobile plan to customers.
The National Content and Technology Cooperative, or NCTC, an industry group made up of more than 700 cable and broadband providers, has been in discussions to create a mobile offering for its members.
“It’s become such a focal point. It’s the thing everybody seems to think is what you need to have,” NCTC President Lou Borrelli said of mobile offerings. “I’ve seen it referred to as the new bundle. I don’t dispute that.”
Since NCTC’s membership includes small providers — many in rural areas — the cooperative started discussions with wireless operators last year on behalf of its entire base.
Borrelli said NCTC hadn’t been in a rush to offer mobile until it saw how Charter and Comcast did in net additions in 2021. “I remember getting calls from some of our board members saying, ‘You know, maybe we should look at this,’” he said.
NCTC’s negotiations should wrap up this year, Borrelli said. Some have already added mobile. Colorado-based WOW! Internet, Cable & Phone unveiled a mobile plan in July through a partnership with Reach Mobile.
Borrelli said consumer research in certain markets showed companies had no choice in the matter. “Members have told us they don’t care what the results are, we need to do this.”
Disclosure: Comcast is the parent company of NBCUniversal, which owns CNBC.
Last year was one of the worst for stock markets in more than a decade. The three major U.S. indexes — the S & P 500 , the Dow Jones Industrial Average and the Nasdaq Composite — all clocked their worst year since 2008 . The MSCI World Index fared no better, also ending the year with its worst performance since 2008. As market pros warn investors of bumpy times ahead , CNBC Pro used FactSet data to screen for low-volatility stocks that not only beat the market in 2022 but are expected to rise further this year. The following MSCI World stocks ended last year in the black, are buy-rated by the majority of analysts covering them, and have average potential upside of at least 20% over the next 12 months. They also are less volatile than the index, with a 3-year historical beta of less than 1. “Beta” is a measurement of a stock’s volatility ; a beta of 1 means that a stock’s volatility is equal to the market, whereas a beta below 1 means that stock is less volatile than the market. Telecommunications U.S. telecom giant T-Mobile turned up on the screen. The company grew its market cap by more than 20% last year, but analysts covering the stock think it could still rise a further 27%. Its largest shareholder Deutsche Telekom made the list too, with the company given average upside of 34.5%. Telecom stocks are typically seen as a relatively defensive play, with their dividends a key reason for their popularity among income-seeking investors. Utilities The sector is traditionally seen as a safe haven during periods of market upheaval, given its steady, regulated earnings, inflation-based contract clauses and higher dividend income relative to other sectors. The sector ended the year down 3.6%, making it the second-best performer among the 11 major sectors on the index. It also enjoys the second-highest dividend yield, according to FactSet data. Germany’s RWE and Enel Chile were among the utility names that made CNBC’s screen, with a historical beta of 0.8 and 0.2 respectively. Shares of RWE returned 16.4% in 2022, but analysts expect further upside of 25.8%. Enel Chile had a standout year, with the stock returning 30.8% in 2022, but analysts think it can still rise a further 43%. Gaming Video game giant Activision Blizzard is another well-known name on the list. The stock gained 15% last year, but analysts give it upside of a further 20%. It has a historical beta of 0.3. The company is the subject of a proposed $68.7 billion acquisition by Microsoft , but the deal could be in jeopardy, with the U.S. Federal Trade Commission seeking to block it on anti-competition grounds. Nintendo also made the list. Microsoft announced in December that it had entered into a 10-year commitment to bring popular video game franchise Call of Duty to Nintendo once the acquisition of Activision Blizzard had been completed, following a similar commitment to bring the game to Sony ‘s Xbox. The moves are widely seen as an attempt by Microsoft to assuage regulators’ and competitors’ concerns over the Activision deal. Fertilizer Stocks Fertilizer stocks Nutrien and Corteva made the screen too. Shares in Nutrien were up just 4% last year, having fallen significantly from April’s 52-week high of 147.93 Canadian dollars ($109.34). Some 54% of analysts covering the stock still rate it a buy, however, with consensus estimates give the stock average upside of 38.6%
