3 events will set the market’s tone for October

CNBC’s Jim Cramer on Friday said that three key events next week will determine if the nightmarish month for the stock market will continue into October.

Here are the events:

• The release of the nonfarm labor report Friday. Cramer said he expects it to show inflated hiring and wages.
• Two speaking engagements by Cleveland Fed President Loretta Mester, who Cramer believes is the primary inflation hawk on the Federal Open Market Committee. “She wants to protect us … from high inflation, even if that means raising interest rates into a recession,” he said.

The S&P 500 closed out its worst month since March 2020 on Friday. The Dow Jones Industrial Average and the Nasdaq Composite fell 8.8% and 10.5%, respectively, for the month.

While it’s likely that Mester and the report will both bring bad news, investors can protect themselves from the market wreckage if they stick to a solid game plan, according to Cramer. 

“Own high-quality companies with good balance sheets and high dividends that will benefit from a decline in inflation, because that’s what’s going to happen,” he said.

He also previewed next week’s slate of earnings. All earnings and revenue estimates are courtesy of FactSet.

Wednesday: Helen of Troy, Lamb Wesson

Helen of Troy

• Q2 2023 earnings release before the bell; conference call at 9 a.m. ET
• Projected EPS: $2.21
• Projected revenue: $521 million

Lamb Weston Holdings

• Q1 2023 earnings release at 8:30 a.m. ET; conference call at 10 a.m. ET
• Projected EPS: 79 cents
• Projected revenue: $1.21 billion

“We saw this from Nike last night — all that happens is the downside gets accentuated as the upside just treads water or goes marginally higher. That’s what I expect will happen with both when they report,” Cramer said.

Thursday: Constellation Brands, Conagra Brands, McCormick, Norwegian Cruise Line Holdings

Constellation Brands

• Q2 2023 earnings release at 7:30 a.m. ET; conference call at 10:30 a.m. ET
• Projected EPS: $2.81
• Projected revenue: $2.51 billion

He said he expects the company’s top line to be “extraordinarily good.”

Conagra Brands

• Q1 2023 earnings release at 7:30 a.m. ET; conference call at 9:30 a.m. ET
• Projected EPS: 52 cents
• Projected revenue: $2.85 billion

The company needs to grow its business, according to Cramer.

McCormick

• Q3 2022 earnings release at 6:30 a.m. ET; conference call at 8 a.m. ET
• Projected EPS: 71 cents
• Projected revenue: $1.6 billion

Cramer said that the company’s earnings call will simply reinforce its preannounced weaker-than-expected third-quarter earnings and full-year outlook cut earlier this month.

Norwegian Cruise Line

• Investor meeting at 10 a.m. ET

Cramer said that he expects Norwegian to be performing better than competitor Carnival, which struggled with higher costs in its latest quarter, but it’s unclear whether that will be enough to help Norwegian’s stock.

Friday: Tilray Brands

• Q1 2023 earnings release at 7 a.m. ET; conference call at 8:30 a.m. ET
• Projected loss: loss of 5 cents per share
• Projected revenue: $169 million

He predicted that the company will make a “bold” statement about the legalization of cannabis and said he’s pondering whether this could be a great speculative stock to own during the Biden administration.

Disclosure: Cramer’s Charitable Trust owns shares of Constellation Brands.