Every weekday the CNBC Investing Club with Jim Cramer holds a “Morning Meeting” livestream at 10:20 a.m. ET. Here’s a recap of Friday’s key moments. 1. Mixed earnings signals on consumer strength 2. Social media stocks get slammed 3. Get ready for the most important week of earnings season 1. Mixed earnings signals on consumer strength The major indices were down Friday, but stocks are still looking to close the trading week with gains. It was a busy five days for earnings, which helped us get more insight into consumer strength. AT & T (T) reported on Thursday and while the telecom giant provided strong wireless subscriber growth, it lowered its free cash flow guidance from $16 billion to $14 billion, flagging consumer credit as a potential early-stage concern. AT & T still outperformed Verizon (VZ), which reported on Friday. VZ had a disappointing quarter with flat revenues and lower-than-expected subscriber numbers. The wireless network operator cut its full-year EPS outlook from $5.40 to $5.55 down to $5.10 to $5.25. Most notable for Verizon was a year-over-year increase in churn, which is the rate at which consumers discontinue service with the company. American Express (APX) on the other hand beat expectations for the second quarter with record spending from card members, stemming from strong appetite for traveling and entertainment. Based on the company’s performance year to date, Amex raised its full year revenue growth guidance to 23% to 25%, from 18% to 20%. The Federal Reserve’s Federal Open Market Committee meeting is on deck next week from July 26 and 27. Investors will be gauging the central bank’s decision on how far it will move interest rates. Analysts expect the Fed will hike rates 75 basis points. 2. Social media stocks crushed The big story Friday morning came from Snap (SNAP)’s second quarter earnings, which missed on the top and bottom lines. Despite the company’s May warning that its second-quarter results would come in below expectations, the company’s evaporating growth can be seen in the numbers. Snap’s sales growth was 42% in the fourth quarter of 2021, slowing to 38% in the first quarter and then plunging to 13% year-over-year in the second quarter. SNAP didn’t provide guidance for the third quarter and said it plans to slow hiring. SNAP is down more than 35% Friday after revenue growth slowed due to challenges related to a difficult macro environment and growing competition. Twitter (TWTR) added to bad news for the sector with its revenues falling 1% compared to last year, while the Street expected a 10.5% growth. Just like Snap, Twitter cited advertising as its main challenge — along with the battle over Elon Musk’s pending Twitter acquisition. Meta (META) and Alphabet (GOOGL) fell on these earnings, roughly 7% and 5% respectively. But Snap, Meta and Alphabet are very different companies, said Jeff Marks, the Investing Club’s director of portfolio analysis in Friday’s Investing Club ‘Morning Meeting.’ Snap is not profitable while Meta and Alphabet are highly profitable companies that trade at a reasonable valuations with larger platforms that offer higher return on investments to advertisers. If an advertiser needs to slash its advertising budget, we believe they are less likely to cut from Alphabet and Meta. Plus, they are great long-term companies to hold. Both Big Tech companies, and Club holdings, will be reporting earnings next week. 3. Get ready for the most important week of earnings season Microsoft (MSFT) reports Tuesday after the bell. Foreign exchange rate headwinds and lockdowns in China could hit earnings but its cloud computing business, Azure, is doing very well. Alphabet will report reporting Tuesday after the bell, and Meta reports Wednesday after the bell. Humana (HUM) reports Wednesday before the bell. The stock is up 5% year to date. While there were challenges with Medicare Advantage growth earlier this year, we like Humana because it’s a defensive name that will perform in a recession. Qualcomm (QCOM) will report after the bell on Wednesday. While the stock has had a nice run over the past couple weeks, QCOM is down 15% this year. But shares are still cheap and pay a dividend. On earnings, we will be looking to confirm whether Apple (AAPL) is using Qualcomm’s 5G modems in their iPhones — which would be a win for the company. Ford (F) earnings will come in after the bell on Wednesday. The chip shortage is limiting the company’s production, but volumes are offset with higher prices. The stock has a reasonable valuation and comes with a 3% dividend yield. We believe Ford has a bright future in the electric vehicle business, especially following news this week about batteries . (Jim Cramer’s Charitable Trust is long META, GOOGL, MSFT, QCOM, HUM, F, AMZN, AAPL. See here for a full list of the stocks.) “As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade” THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.”
