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Jim Cramer’s top 10 things Friday: Hot inflation, Costco, Microsoft

My top 10 things to watch Friday, Dec. 9, 2022

1. Wholesale inflation: JUST PLAIN BAD. The government says November producer prices rose 0.3% overall versus the 0.2% expected increase. Ex-food and energy core rate double estimates: up 0.4%. US stock futures, up solidly before the numbers, turned lower after the release. Bond yields up. Consumer prices for November are out Tuesday morning when the Federal Reserve’s two-day December meeting begins. PPI keeps pressure on the Fed. Food inflation mitigated by Costco.

2. Costco (COST): Fiscal first-quarter 2023 total revenue of $54.44 billion and earnings-per-share of $3.07 — both missed estimates. Membership fee revenue was $1 billion. EPS includes a 15-cent charge to downsize fleet and a 12-cent drag due to the strong dollar. Food business really booming. Inflation: a little light at the end of the tunnel. Prices on corn, flour, sugar, butter all lower, even steak. Temporary discounts work: TVs sales up but smaller size screens. Looking ahead, we’re encouraged by the expected membership fee hike and special dividend. Costco hopes to open 24 net stores this fiscal year. Wall Street analysts cut their price targets, including at Citi, Stifel, Wells Fargo and Loop Capital.

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