Stocks were lower Tuesday after Wall Street closed at fresh records on Monday.
TheStreet’s Katherine Ross and Jim Cramer discussed breaking news in the stock market. Cramer spoke about Apple’s services revenue, Credit Suisse’s potential losses from the Archegos implosion and Tuesday’s markets overall.
Apple: Buy Or Sell?
Morgan Stanley analyst Katy Huberty cut her price target on Apple (AAPL) – Get Report to $156 from $164 a share while raising her services revenue estimate.
Huberty said in a research note that the price target cut reflected lower multiples being granted to several of Apple’s peers, but maintained her overweight rating.
Cramer agreed with Huberty that Apple will continue to post very strong services revenue. “[Huberty] is being prudent when she says while services revenue will go up, people may not want to pay as much for Apple services as before. That’s why she cut her price target,” Cramer said.
Credit Suisse and Archegos
Credit Suisse (CS) – Get Report has reportedly sold additional blocks of stocks totaling more than $2 billion linked to the unwinding of massive equity positions by Archegos Capital Management.
Cramer said Credit Suisse had an unwise philosophy of playing the market even in a margin situation. “You should never do that. No one in that room should have said ‘we’ll hold on, maybe it’ll pass,'” Cramer said.
He added that Goldman Sachs (GS,) – Get Report on the other hand, was able to get rid of the stock it got hung on very quickly even before the markets opened.
Tuesday’s Markets
Cramer said interest rates are still low so the stock market can go higher. “If the Fed continues to keep interest rates low, then you’re going to see money pour into the stock market,” said Cramer. “The employment numbers released last Friday show growth without inflation so we can continue to buy until we get a number that is different.”
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