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Tech and real estate have been among the S&P 500’s worst sectors in 2022.
Cramer said he believes tech and real estate will continue to struggle next year; however, tech may start to see its fortunes improve after the first half of 2023.

CNBC’s Jim Cramer on Wednesday highlighted technology and real estate stocks he believes can perform well in 2023, following a dismal year for both sectors.
Rising interest rates presented challenges for tech and real estate industries in 2022. Information technology is down 27% year to date, as of Wednesday’s close, while real estate has fallen 28.4% over the same stretch. The only S&P 500 sectors to perform worse are consumer discretionary, down 36.2%, and communication services, down 40.3%.

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Cramer said he believes tech and real estate will continue to struggle next year; however, tech may start to see its fortunes improve after the first half of 2023.

Tech picks for 2023

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Oracle’s fiscal 2023 second-quarter earnings last week were “magnificent,” Cramer said. The stock sells for less than 17 times forward earnings. While enterprise software is hardly Cramer’s favorite industry right now, he said Oracle’s business appears “very durable.”

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Cramer said he likes Broadcom’s diversification strategy, including its pending deal to acquire VMware. Broadcom shares also carry a dividend yield around 3.3%, allowing investors to be patient while that acquisition goes through regulatory review, he said. The company also recently announced a $10 billion stock buyback program.

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Palo Alto Networks is not in the S&P 500. Nonetheless, Cramer said he believes it’s the best-run cybersecurity company operating in an industry that has long-term staying power in the digital age. While Palo Alto Networks reported better-than-expected results last month, Cramer noted the stock isn’t too far away from its 52-week closing low of $142.21 on Nov. 4. “I recommend picking some up now right here and maybe some more into weakness,” he said.

Real estate picks for 2023

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Cramer said he likes Realty Income because its top retail tenants — such as Dollar General, Walgreens and 7-Eleven — have businesses that can hold up during a potential recession. “Best of all, this company’s a dividend machine; they pay a monthly dividend,” he said, “and tend to raise it multiple times a year. Currently, the stock yields 4.6%.”

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While shares of Federal Realty have fallen around 25% in 2022, Cramer said the stock has been a solid long-term performer. Its current dividend yield is 4.25%. Cramer said Federal Realty’s specializes in mixed-use properties, many of which are in wealthy suburbs. That is notable given concerns around a potential recession.

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Cramer said the logistics focused real estate investment trust, or REIT, has continued to turn in strong results even as its stock has fallen around 31% year to date. Cramer said he thinks Prologis shares have tumbled far enough to start looking enticing.

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It’s that time again! “Mad Money” host Jim Cramer rings the lightning round bell, which means he’s giving his answers to callers’ stock questions at rapid speed.

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AMC Entertainment: “Going to take a pass on that. $5 is where it should be, and no higher.”

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Tecnoglass: “Very smart. Very good company. … I would buy it if it came in a little. It’s had a very big run.”

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Laredo Petroleum: “Laredo is a second-rate oil producer. I prefer very much that you buy Pioneer, PXD, which I think is much stronger and the Charitable Trust owns it.”

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D R Horton: “I think Horton is a very good choice, but you do know they all trade together. [Toll Brothers] is good, too … But I think you’re right.”

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A federal judge approved the DOJ’s request to postpone an overlapping SEC civil suit over an alleged fraud scheme involving the so-called $100 million New Jersey deli.
The SEC consented to pausing the case until the criminal litigation is complete, the judge said.
Federal prosecutors are in the discovery phase of the litigation and will provide a status update Jan. 17.

Your Hometown Deli in Paulsboro, N.J.
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A federal judge granted the Justice Department’s request to pause the Securities and Exchange Commission’s civil case regarding alleged fraud involving a small-town New Jersey deli whose parent company was once valued at $100 million in the stock market.
Federal prosecutors had requested earlier in December that the judge postpone the SEC case due to considerable overlap with their criminal litigation. They argued that postponing the civil case would “preserve the integrity” of the prosecution by preventing the defendants from seeing the extent of the government’s evidence against them.

Judge Christine O’Hearn granted that request on Wednesday, stating that there was no opposition from either the SEC or the defendants. The SEC declined to comment beyond public filings.
The decision marks the latest step in the saga of Your Hometown Deli, a now-closed sandwich shop in Paulsboro, New Jersey, which prosecutors allege was used as a pawn for an international market manipulation scheme. It was the sole asset of Hometown International, a company controlled by financiers James Patten, Peter Coker Sr. and Peter Coker Jr. The latter are father and son.
Prosecutors charged the three men with multiple criminal counts in September, alleging that the trio manipulated the market to artificially inflate the values of Hometown International and another shell company, E-Waste. Patten and Coker Sr. were arrested the day the charges were announced, while Coker Jr., who lives in Hong Kong, remains at large. The SEC also unveiled its civil suit against the three men on the same day.
Your Hometown Deli made under $40,000 in annual revenue despite Hometown International’s $100 million market value, according to public filings. Paul Morina, the principal and wrestling coach at Paulsboro High School, opened the deli with his longtime friend Patten in 2014.
Prosecutors say Patten convinced Morina to open the deli under the umbrella of Hometown International. Without Morina’s knowledge, Patten and the Coker father-son duo “began positioning Hometown International as a vehicle for a reverse merger that would yield substantial profit to them,” prosecutors allege.
Earlier this month, prosecutors said they expect to review about two batches of 80,000 documents each by Jan. 27. The court will hold a status conference on those documents Jan. 17.

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Stephanie Linnartz, the current president of Marriott International, was named Under Armour’s next CEO.
The athletic apparel brand hopes Linnartz’s digital background will jumpstart its attempts to grow e-commerce operations.
“It will be a partnership. She and I will be partners. We’re not hiding from that,” said founder and executive chairman Kevin Plank.

Under Armour said Wednesday that it has hired Marriott International President Stephanie Linnartz to be its next CEO, capping off a seven-month hunt for a new boss that the company hopes will grow its digital business. 
Linnartz, who has been with Marriott since 1997, was one of 60 candidates considered for the role. While athletic apparel is a big leap from the hospitality business, she was selected for her digital prowess and success in transforming the hotel chain’s online presence, Under Armour founder and Executive Chairman Kevin Plank told CNBC. 

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“She’s really a learner,” Plank said. “She’s got that intellectual curiosity and she’s coming in with the point-of-view as a pro.” He said the company is leaning into its priorities of “digitization, product and brand” after a transition period of five or six years.
Linnartz, who started as a financial analyst at Marriott in 1997, will start her new job on Feb. 27.
Colin Browne has been serving as interim CEO since June after Under Armour’s previous top executive, Patrik Frisk, unexpectedly resigned in May. Browne will resume his position as chief operating officer, the company said in a news release. 
Plank said the company isn’t looking for a major change in direction and that it “really” likes the strategy currently in place, but he acknowledged the brand is “not growing as much as we want.” 
Under Armour has been seeking to build out its e-commerce operations, boost profits and compete with rival brands Nike and Lululemon as it struggles with low margins, costly litigation and a slashed fiscal year outlook. 

The company is banking on Linnartz’s experience leading Marriott’s multibillion-dollar digital transformation to accelerate Under Armour’s online initiatives. 

Under Armor’s new CEO Stephanie Linnartz
Courtesy: Under Armour

During her tenure at Marriott, Linnartz grew its Bonvoy loyalty program to 173 million members and delved into the sports world when she developed multi-year partnerships with the NFL, the NCAA and the Mercedes-AMG PETRONAS F1 Team. 
In a release Wednesday, Marriott CEO Anthony Capuano praised Linnartz as an “incredible executive.” She will leave the company Feb. 24, three days before she starts at Under Armour.
“It has been one of the most significant and best experiences of my life to build a career at Marriott,” Linnartz said in the release.
She is also a member of Home Depot’s board of directors. She will be able to bring that retail background and insight to the position, Plank said. 
Plank said he will remain as brand chief and executive chairman, and will continue to be “involved in the business in an important way.”
“It will be a partnership. She and I will be partners. We’re not hiding from that,” said Plank.
Under Armour began with humble roots in 1996. Plank, a former football player, developed the prototype for the brand’s signature moisture wicking shirt while a student at the University of Maryland and later perfected his designs out of his grandmother’s basement in Georgetown. 
By 2005, he took the Baltimore-based company public and on its first day of trading, its value doubled. 
Five years later, Under Armour had quadrupled its revenues and surpassed $1 billion.
Most recently, the company reported $1.57 billion in sales in their fiscal second quarter, up 2% from the prior year, along with a net income of $87 million. 

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Most American shoppers say they are willing to pay more for their retail club memberships — a sentiment that bodes well for Investing Club holding Costco (COST). The survey says … According to an Evercore ISI survey of more than 2,500 U.S. consumers, more than 80% said they’d be willing to pay a higher annual fee to stay in their shopping clubs, up 25 percentage points from 2015. The survey also found that Americans intend to renew memberships at “record high levels,” or more than nine of every 10 respondents. “We viewed member pushback as minimal and lower than prior year surveys,” Evercore said, indicating consumers are receptive to fee hikes following increases for Amazon’s (AMZN) Prime service in March and Walmart’s (WMT) Sam’s Club in October. This is a positive readthrough for Costco, which hasn’t hiked annual membership prices in several years. In the Evercore survey, Costco was reported as having the “highest fee inelasticity,” or consistent demand for its products, even in a deteriorating economy, with 60% of its members willing to pay 10% or more in membership fees. Moreover, an overwhelming 94% of Costco members in the survey said they’ll ‘definitely’ or ‘probably’ renew their memberships as loyal customers continue to see value in the club model. Those numbers are consistent with renewal rates in the U.S. and Canada at 92.5%, according to Costco’s latest quarterly results , which were released earlier this month. The worldwide renewal rate was 90.4%. As a result of the survey findings, Evercore favors Costco for a planned fee increase and the potential for a special dividend sometime next year. The firm kept its outperform, or buy rating, on COST and increased the stock’s price target to $540 per share from $530. “We are boosting our COST base case as a result of today’s survey findings, as the company (Costco) appears well positioned to continue compounding as traffic and renewal rates hit record highs, with the added survey insight that a fee hike is likely to be relatively well received by members while boosting earnings growth to double digits,” analysts at Evercore said. Costco’s standard Gold Star Membership costs $60 per year. For an additional $60, customers get the Executive Membership and earn additional rewards and lower prices on certain products and services. Costco’s last membership price hike was in June 2017, when the wholesale retailer increased its standard membership fee from $55 to $60 and its Executive membership from $110 to $120. Historically, Costco has increased its membership fee every five years, an anniversary that passed a few months ago. While no formal announcements have been made yet, CFO Richard Galanti said in the company’s last earnings report that “it’s a question of when not, if.” Galanti added during the Dec. 9 call, “We feel that we’re in a very strong position right now. And if we have to wait a few months or several months, that’s fine.” Earlier this year, management said the company has held off raising membership fees as the inflation burden has weighed on consumers. But with decades-high inflation showing signs of cooling as of late, that could support Costco’s case to increase fees. Evercore analysts believe Costco could make the announcement in April 2023 Shares of Costco closed up nearly 1% on Wednesday at $462.06 apiece. The stock has dropped 18% year to date, pretty much in line with the S & P 500 ‘s decline in 2022. For the Club, we’re sitting on an unrealized gain of nearly 60% gain on stock purchased in 2020. We own 110 shares of COST for a 1.8% weighting in the portfolio. On Dec. 1, we sold 55 shares of COST and lowered it to a 2 rating . Bottom line Positive consumer survey results from Evercore — which confirmed strong membership renewal rates, as seen in its latest quarter — signal that any Costco membership fee increases would likely be met with very little resistance from shoppers and could be a catalyst for the stock. That’s a position we share, and it aligns with our investment case on the wholesale retailer, which we think is best in class. Consumers are willing to pay more for membership fees because they know Costco has cost-saving deals, offering a strong value proposition unmatched by retail competitors. It’s a volume-driven company. As inflation is deteriorating consumer spending power, Americans are seeking refuge in discounts. In a recent interview with Jim Cramer, Costco CEO, Craig Jelinek called the compamy the “price police,” because it constantly negotiates prices with its suppliers to get the best deals for its members. Another potential catalyst for Costco stock is the company’s likely decision to issue a special dividend, which Evercore thinks could happen in 2023. Costco has more cash sitting on its balance sheet than what it needs to run its business, allowing it to reward shareholders with an additional cash dividend on Costco common stock in addition to its quarterly dividend. The last time Costco declared its special dividend was in November 2020 at $10 per share. The company has issued it four times in the past eight years. While long-term investors in Costco, we know the retailer isn’t immune to a slower economy. Overall, we are cautious of the retail sector as macroeconomic headwinds continue to plague consumers, explaining why we prefer value-based stores. Costco is the best among its peers since it delivers durable earnings, record membership renewal rates and returns cash to shareholders — all while expanding its presence on a global scale. (Jim Cramer’s Charitable Trust is long COST. 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.

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Most American shoppers say they are willing to pay more for their retail club memberships — a sentiment that bodes well for Investing Club holding Costco (COST). More

H&M announced it will be pulling a line of merchandise featuring pop star Justin Bieber.
Bieber had slammed the company on Instagram, calling the products “trash.”
The company said despite Bieber’s claims, it followed all proper approval procedures.

Canadian singer-songwriter Justin Bieber arrives for the 64th Annual Grammy Awards at the MGM Grand Garden Arena in Las Vegas on April 3, 2022.
Angela Weiss | Afp | Getty Images

H&M will no longer sell a line of Justin Bieber merchandise after the musician told fans he didn’t “approve” of the clothing bearing his name and likeness.
“The H&M merch they made of me is trash and I didn’t approve it,” the singer wrote in an Instagram story Monday. “Don’t buy it.”

H&M said Wednesday it will be removing the line from its stores and its website out of “respect” for Bieber. The company also denied claims that it didn’t seek his approval.
“H&M has followed all proper approval procedures, as we have done in this case, but out of respect for the collaboration and Justin Bieber, we have removed the garments from selling,” the company said in a statement.
A representative for H&M told CNBC it pulled all items from the line including t-shirts and hoodies. The collection also included tote bags and phone accessories, according to various media reports. Many of the products featured Bieber himself or lyrics to hit songs like “Ghost” from his 2021 album “Justice.”
As of midday Wednesday, a search for Bieber’s name on H&M’s website returned zero products.

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Home sales declined 7.7% on a monthly basis in November.
Sales were down 35.4% year over year, marking the tenth straight month of declines.
The median sales price rose 3.5% to $370,700 from a year ago.

Sales of existing homes fell 7.7% in November compared with October, according to the National Association of Realtors.
The seasonally adjusted annualized pace was 4.09 million units. That is weaker than the 4.17 million units housing analysts had predicted, and it was a much deeper fall than usual monthly declines.

Sales were down 35.4% year over year, marking the tenth straight month of declines. That was the weakest pace since November 2010, with the exception of May 2020, when sales fell sharply, albeit briefly, during the early days of the Covid pandemic. In November 2010, the nation was mired in the great recession as well as a foreclosure crisis.
These counts are based on closings, so the contracts were likely signed in September and October, when mortgage rates last peaked before coming down slightly last month. Rates are now about one percentage point lower than they were at the end of October, but still a little more than twice what they were at the start of this year.

Lane Turner | The Boston Globe | Getty Images

“In essence, the residential real estate market was frozen in November, resembling the sales activity seen during the Covid-19 economic lockdowns in 2020,” said Lawrence Yun, NAR’s chief economist. “The principal factor was the rapid increase in mortgage rates, which hurt housing affordability and reduced incentives for homeowners to list their homes. Plus, available housing inventory remains near historic lows.”
Read more: Mortgage refinance demand surged 6% last week
At the end of November there were 1.14 million homes for sale, which is an increase of 2.7% from November of last year, but at the current sales pace it represents a still-low 3.3 month supply.

Low supply kept prices higher than a year ago, up 3.5% to a median sale price of $370,700, but those annual gains are shrinking fast, well off the double digit gains seen earlier this year. It is still the highest November price the Realtors have ever recorded, and, at 129 straight months, it is the longest running streak of year-over-year price gains since the realtors began tracking this in 1968. Roughly 23% of homes sold above list price, due to tight supply.
“We have seen home prices come down from their summer peaks over the past five months. At the same time, we have also seen rent growth retreat for 10 consecutive months,” wrote George Ratiu, senior economist at Realtor.com in a release. “However, the cost of real estate remains challenging for many households looking for a place to call home, especially as high inflation and still-elevated interest rates have been eroding purchasing power.”
Sales decreased in all regions but fell hardest in the West, where prices are the highest, down nearly 46% from a year ago.
Homes sat on the market longer in November, an average 24 days, up from 21 days in October and 18 days in November 2021. Despite the slower market, 61% of homes went under contract in less than a month.
With prices still high and mortgage rates hitting a cyclical peak, first-time buyers remained on the sidelines. They were responsible for 28% of sales in November, which was unchanged from October, and up slightly from 26% in November 2021. Historically first-time buyers make up about 40% of the market. A separate survey from the Realtors put the annual share at 26%, the lowest since they began tracking.
Sales fell across all price categories, but took the steepest dive in the luxury million-dollar-plus category, dropping 41% year-over-year. That sector had seen the biggest gain in the first years of the pandemic.
Mortgage rates have come off their recent highs, but it remains to be seen if it will be enough to offset higher prices.
“The market may be thawing since mortgage rates have fallen for five straight weeks,” Yun added. “The average monthly mortgage payment is now almost $200 less than it was several weeks ago when interest rates reached their peak for this year.”

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AMC said it is no longer in talks to acquire some theaters from rival Cineworld.
Cineworld filed for Chapter 11 bankruptcy protection in September.
AMC’s disclosure comes after the company reported another quarterly loss last month.

Pedestrians pass a Cineworld Group Plc cinema in Aldershot, U.K., on Monday, Oct. 5, 2020.
Jason Alden | Bloomberg | Getty Images

AMC said it is no longer in talks to acquire theaters from Regal parent company Cineworld, which had filed for bankruptcy protection earlier this year.
Cineworld, which is based in the United Kingdom, had been in discussions with AMC to hand over some of its theaters after filing for Chapter 11 bankruptcy in September.

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In a filing with the Securities and Exchange Commission on Wednesday, AMC said the discussions with Cineworld lenders regarding assets in the U.S. and Europe had ended. The disclosure comes after AMC reported another quarterly loss last month despite an increase in revenue, as the theater chain spent more than it brought in.
The world’s largest movie theater company has been trying to reduce its debt loads, which were exacerbated during the pandemic when people hunkered down at home and streaming services boomed. Even as audience attendance has rebounded more recently, the disruption of movie production over the past two years has left theater operators such as AMC hurting for new releases to boost ticket sales.
The outlook for 2023 appears more promising, with a healthy slate of highly anticipated new releases.
Read the full SEC filing here.

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