October Monthly Roundup: Navigating the Tech Pullback. What We Bought and Our Shopping List.
We used the AI pullback to add to several holdings, made a handful of rating and target changes, and sharpened our shopping list.
Oil Drops While Other Inflation Pressures Look to Accelerate: 8 Key Items Shaping the Stock Market Monday
Marvell and Lumentum ink a deal, Google and Amazon address capex funding concerns and other headlines moving the market this morning.
Chip Rout Sends Nasdaq to Worst Month Since March 2025
Intel’s record drop leads a cascade in chip names with the S&P 500 and Nasdaq seeing their worst session since June, while defensive buying gave the Consumer Staples ETF its best month on record.
From The Street of Dreams
$KO: JPMorgan raised the firm’s price target on Coca-Cola to $98 from $95 and keeps an Overweight rating on the shares. The firm views the company’s Q3 report as strong.
$KO: Morgan Stanley analyst Dara Mohsenian raised the firm’s price target on Coca-Cola to $103 from $100 and keeps an Overweight rating on the shares. “Solid” Q3 results highlight sustained higher organic sales growth than peers, with robust pricing power, sustained share gains, and strong Fairlife growth, the analyst tells investors.
$KO: Piper Sandler raised the firm’s price target on Coca-Cola to $103 from $102 and keeps an Overweight rating on the shares. The firm remains bullish on Coca-Cola and its long-term growth outlook and continues to believe its best-in-class execution positions the company more favorably vs. peers, even in a tough consumer environment.
KO: Wells Fargo raised the firm’s price target on Coca-Cola to $100 from $90 and keeps an Overweight rating on the shares. The firm says Coca-Cola is entering a “great” debate. After a year in which virtually every key metric was great, and the stock’s performance matched, investors are beginning to ask whether “great” this year makes it harder to exceed expectations next year. That narrative is still in its early stages, but becoming the focus of that debate may be the stock’s next key challenge, the firm argues.
KO:Citi analyst Filippo Falorni raised the firm’s price target on Coca-Cola to $103 from $102 and keeps a Buy rating on the shares.
$KMB: UBS analyst Peter Grom raised the firm’s price target on Kimberly-Clark to $113 from $106 and keeps a Neutral rating on the shares. Kimberly-Clark’s Q3 results missed on revenue but beat earnings on better SG&A and below-the-line items, while reiterated FY26 guidance was better than feared and drove a share rally likely amplified by positioning, the analyst tells investors in a research note.
Long KO VS KMB VS
A Fair Criticism Deserves a Response
Subscriber jryan (below) delivered some reasonable comments and criticism yesterday in the Comments Section.
Basically he said he is “getting sick of reading about cannabis and Fin TV commentary” — and he wants more (long) stock suggestions, etc.
I wanted to respond in the first column of the day.
* Few longs have represented value to me as I have been unduly negative for a lengthy period of time. I take ownership of that.
* The stocks that I have owned have recently been Staples ($KO, $PEP, $PG and $KMB), selected cannabis names and some others. The consumer nondurable stocks have been fine recently (and I have taken profits in them). We shall see about cannabis — a speculative sector and my focus has been intermediate-term based on the improved likelihood of rescheduling and other factors clearly delineated in my Diary.
*As to the CNBC constructive criticism. I point these out not only as an advocate of the retail viewer that should see timestamps (panelists taking ownership) and observe better company interviews, but so they can evaluate the merits and process of the panelists’ recommendations and become better-informed investors through more hard-hitting interviews (that serve more than as a marketing tool of companies).
* But the criticism directed to Fin TV also is intended to highlight investment recommendations from panelists and guests that I strongly disagree with. Choosing stocks to avoid (in that FIN TV criticism) can be as valuable or even more valuable than choosing stocks to buy. Consider my negative comments towards $BA, $BABA, $META, $UBER, $NFLX, $RDDT, $TTAN, $DIS, $CLF, $MRNA and $UNH (a few years back) etc. that were mostly confidently and strenuously recommended on CNBC.
* My “More Tales From Nvidia” series is intended to deliver the idea that the functionality, productivity and ROIC on the enormous capital spend may disappoint the many and multitude of optimists on AI. I have felt that my contrarian and non herd-like observations were valuable in a backdrop of near-universal bullishness (that is readily and frequently available from the buy/sell sides, panelists and guests). My view was that dwelling on “More Tales” had statistical value in that over 40% of the S&P is comprised of large-cap tech.
* As to specific AI beneficiaries, I have admitted (often) of missing $MSFT and $GOOGL. The valuation on $AAPL seems foolish to me — the shares have prospered and I have been wrong. But the others ($META, $AMZN and even $NVDA) have not set the world on fire this year. As to memory and chip stocks, they have been “the world’s fair” up until the summer but awful since late June. Not only do I think these companies are “overearning,” but the volatility is not for me and not consistent and doesn’t conform with my appetite for risk.
* The financial stocks were quite strong until early summer. I repeatedly cautioned not to embrace banks, brokers and private equity shares (I successfully shorted $BX, $KKR and $APOL since then). Viewed by panelists as perhaps the best “value play,” financials have been dismal over the last four months. We avoided this decline (in $C, $JPM, $BAC, $GS, $MS et al).
* The stocks that I have been short in the AI sphere have been terrific (to the downside) — $ORCL and $CRWV. (Avoiding them as longs has also been a valuable contribution.) My recent foray into shorting NVDA was profitable also.
* As to my preoccupation with CNBC I suggest taking the number of words written about FIN TV and divide it by the number of words written on other subjects daily. You will find my criticism is dwarfed by my other columns. In the scheme of things my criticism is de minimis.
* Finally, to jryan I say there are many other contributors that actively recommend longs and provide a valuable service.
All this said I am imperfect.
I take ownership of my mistakes.
The transparency of my Diary exposes my blemishes.
I believe jryan has some good points and I will purposefully look for more long ideas in the future.
I truly appreciate jryan’s comments and I have tried to respond to his concerns:
jryan
Just a thought. There used to be a lot of different investment ideas, stock suggestions etc., but all it seems to be now is cannabis and CNBC commentary, which I don’t watch anyway. Kind of getting sick of it, especially the cannabis info, is it ever going to pay off? Likely, but it will be quite a while from today, if ever. But at least it’s easier to scroll through the commentary and use less time.
Position: Long KO (VS), PG (VS), KMB (VS), MSOS common (VL) and calls (VS), VRNO (VS), GLAS (S), GTBIF (S), TRLV (VS), CURLF (VS); Short AAPL (S)
AI Frenzy Returns to Wall Street as Chip Stocks Explode Higher Before Big Tech Earnings
A wave of AI-related deals sent semiconductor shares soaring, helping the Nasdaq rally while investors prepared for the Fed and crucial earnings from Microsoft and Google parent Alphabet.
Staples Are UnStable Today
* This week I warned that it was ‘too much too fast’…
I further reduced my staples exposure recently — today we are seeing a lot more pressure on consumer non-durables (($PG) -$1, ($PEP) -$3, ($KMB) -$1 and ($KO) -$1.25 (I warned about a sell off after the guide up).
From last week:
Staples Slammed
Staples (consumer non-durables) are getting hit over the last few hours.
A reminder, I am down to VS on KMB, PG and KO.
I sold out my entire PEP holdings.
I would be a buyer of the space on weakness — but not at current prices.
Position: Long KMB (VS), PG (VS), KO (VS)
Position: LONG KMB (VS), PG (VS) KO (VS)
Meta and Broadcom-Anthropic Financing Deals: 8 Key Items Shaping the Stock Market Tuesday
Earnings from Boeing and Welltower, prepping for Paccar’s results plus other headlines moving the market this morning.
Coke Beats and Raises
Coca-Cola ($KO), an investment long, beat and raised this morning.
Here is the press release:
I have been reducing the weighting of KO on the recent strength, which seemed to have discounted the strong fundamentals in a near all-time share price high.
Position: Long KO (VS)
Tuesday’s Busy Calendar
It’s a full slate of economic data and earnings as the Fed starts its two-day meeting.
September US economic reports include durable goods orders and new home sales. October reports include Conference Board consumer confidence and the Richmond Fed manufacturing and Dallas Fed services surveys. For August, we get the S&P Cotality Case-Shiller and FHFA home price indexes. We’ll also get the weekly ADP NER Pulse.
The FOMC begins its two-day meeting, with the decision Wednesday at 2pm ET.
Non-Bill (>1yr in maturity) US Treasury auctions are $70B of 5-year notes. Treasury will also conduct a buyback of 20- to 30-year securities.
41 S&P 500 components report, six of them with market caps over $100bn:
- Before the open: Coca-Cola ($KO), Boeing ($BA), S&P Global ($SPGI), HCA Healthcare ($HCA), Freeport-McMoRan ($FCX), American Tower ($AMT), Johnson Controls ($JCI), UPS ($UPS), Sherwin-Williams ($SHW), Ecolab ($ECL), Hilton ($HLT), Illinois Tool Works ($ITW), Royal Caribbean ($RCL), Paccar ($PCAR), PayPal ($PYPL), IQVIA ($IQV), CenterPoint Energy ($CNP), Xylem ($XYL), Hubbell ($HUBB), CMS Energy ($CMS), Invesco ($IVZ) and Pentair ($PNR)
- After the close: Visa ($V), Seagate Technology ($STX), Waste Management ($WM), Robinhood ($HOOD), Oneok ($OKE), NXP Semiconductors ($NXPI), Baker Hughes ($BKR), Ventas ($VTR), EQT ($EQT), Arch Capital ($ACGL), Extra Space Storage ($EXR), FirstEnergy ($FE), F5 ($FFIV), PPG Industries ($PPG), Expand Energy ($EXE), Essex Property Trust ($ESS), CoStar Group ($CSGP), Universal Health Services ($UHS) and BXP ($BXP)
Outside the US, Novartis ($NVS) and Porsche ($DRPRY) have reported, followed by SK Hynix ($SKHY) tonight.
Ex-US highlights include China September industrial profits, South Korea Q3 GDP, France October consumer confidence, Eurozone September M3 and the ECB’s Q3 Bank Lending Survey. Israel also holds parliamentary elections.
From Christophe Barraud’s international Week Ahead rundown:
