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Google job cuts, Netflix delivers


My top 10 things to watch Friday, Jan. 20

1. Alphabet (GOOGL) lays off 6% — about 12,000 workers — or what the Google parent and Club holding added last year. Smart move for a company that finds out that it’s cyclical. Joins wave of tech job cuts. Don’t forget Google’s self-driving unit, Waymo, will be on display at Super Bowl.

2. GOOGL shares bucked the sharp back-to-back downdraft in the Nasdaq, and they’re up more than 2.5% early Friday. The Dow Jones Industrial Average and S&P 500 are set to be mixed after three-session losing streaks. As of Thursday’s close, the Dow went negative for the year.

3. Netflix (NFLX) jump roughly 6%, also supporting a Nasdaq rise early Friday, after the streaming giant blew past expectations for fourth-quarter subscriber additions. The content slate is what matters. This is how Netflix added so many people. It figured out that titles make the world go round. That’s the real secret.

4. Netflix co-founder Reed Hastings gives up his co-CEO role but stays on as chairman. He’ll still be involved. But Hastings has done succession right. Greg Peters, ad-supported tier creator, will join Ted Sarandos as co-CEO. They’ll do great together.

5. Salesforce (CRM) downgraded to market perform from outperform (hold from buy) at Cowen, which also cut its price target to $160 per share from $175. Analysts high executive turnover at the Club holding; tough competition for Slack; budget pressure. Also, cost pressure. Salesforce needs to take $3 billion to $5 billion out. Huge overhang.

6. Not enough people or time yet on the Eli Lilly (LLY) Alzheimer’s drug trial, but so far so good. It will stretch out a bit. The Food and Drug Administration rejects accelerated approval for donanemab. Phase 3 trial results remain on track for release in the second quarter. Donanemab is not the reason to own the stock as we have made it clear numerous times to Club members.

7. Mounjaro is the main driver for Lilly’s future. Already approved for type-2 diabetes, the drug should soon get regulatory approval for obesity treatment as well. A weight loss indication could make it the biggest drug of all time. $1700 a month and can be paid for by insurance, according to Zach Reitano, CEO of direct-to-patient healthcare company Ro, who was interviewed for Thursday evening’s “Mad Money.”

8. MKM Partners downgrades Pinterest (PINS) to neutral from buy; keeps its $27-per-share price target. Cautious near-term stance. Negative readthrough from proprietary ad agency survey for Facebook parent and Club holding Meta Platforms (META), Google’s YouTube and Snap (SNAP).

9. Nordstrom (JWN) shares sink 6% early Friday after the department store chain posted weak holiday sales and cut guidance. Gross margin painful. Off-price Rack thesis challenged. CEO Erik Nordstrom says, “Consumers are being more selective with their spending given the broader macro environment.”

10. Barclays upgrades Ralph Lauren (RL) to overweight from equal weight (buy from hold); increases its price target to $134 per share from $101. Same upgrade for PVH Corp (PVH). Barclays raises its PT on the company behind Tommy Hilfiger, Calvin Klein and Van Heusen to $106 from $72.

(Jim Cramer’s Charitable Trust is long GOOGL, CRM, LLY, META. 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.

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