Jim Cramer’s Top 10 Stock Market Watchlist for Friday

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**Market Movers: What Investors Should Be Watching on Friday**

As traders gear up for the session’s close, several key themes are shaping market sentiment. From private credit’s evolving landscape to the resilience of consumer spending on experiences, investors are dissecting a mixed bag of economic data and corporate updates. Here’s a breakdown of critical developments to monitor:

**1. Private Credit Under the Microscope: Blue Owl Capital’s Capital Return Strategy**
Blue Owl Capital’s recent move to return capital to investors through loan sales is drawing attention, with some market observers deploying the “canary in the coal mine” analogy for private credit. While the sector has faced scrutiny over potentially “mismarked” loans, the current situation with Blue Owl doesn’t appear to signal a systemic crisis, but rather a strategic maneuver within a dynamic market. The underlying performance of these private debt instruments and their implications for broader credit markets will be a key focus.

**2. Economic Slowdown Concerns Emerge: Q4 GDP and Inflationary Pressures**
Initial fourth-quarter U.S. GDP figures landed softer than anticipated, coming in at a 1.4% growth rate. This deceleration is likely influenced by factors such as the recent government shutdown, which can disrupt economic activity. Concurrently, the Personal Consumption Expenditures (PCE) price index, the Federal Reserve’s preferred inflation gauge, showed a 0.4% increase in December, slightly exceeding consensus expectations. This juxtaposition of slowing growth and persistent inflationary pressures will be crucial for the Federal Reserve’s forward guidance.

**3. Texas Roadhouse: Navigating Inflation in a Bullish Cattle Market**
Shares of Texas Roadhouse experienced a notable uptick, suggesting the market is willing to overlook a weaker fourth quarter due to a robust start to the current quarter. However, the ongoing cattle bull market presents a persistent challenge. The sustained high cost of beef, a critical input for the steakhouse chain, could continue to pressure margins, even as consumer demand for casual dining remains resilient. The long-term impact of commodity price cycles on restaurant profitability is a theme investors are closely watching.

**4. Cybersecurity Stocks Face Headwinds: CrowdStrike’s Valuation Adjustment**
The software sector, particularly in cybersecurity, continues to experience valuation recalibrations. Barclays recently adjusted its price target for CrowdStrike, reflecting the broader market sentiment. Despite the reduced target, the firm maintained a “buy” rating, signaling a belief in the company’s long-term prospects. This pullback in cybersecurity valuations, driven by shifting investor appetite for growth stocks, may present an opportune entry point for long-term investors recognizing the enduring need for robust cyber defenses in an increasingly digital world.

**5. Aerospace Innovation: GE Aerospace Takes Flight**
Morgan Stanley initiated coverage on GE Aerospace with a strong “buy” rating and an ambitious price target, underscoring confidence in the engine maker’s financial trajectory. Analysts highlighted the company’s robust cash flow generation, a testament to the enduring strength of the air travel bull market. As global travel continues its recovery, the demand for advanced aviation technology and efficient engine solutions positions GE Aerospace for significant growth. This trend also benefits other players in the aerospace ecosystem.

**6. Pharma Giants and Obesity’s Promise: Pfizer, Eli Lilly, and Beyond**
Pfizer’s stock faced downward pressure following a “sell” rating initiation, with analysts expressing concerns about its near-term performance pending further clarity on its obesity pipeline data. In contrast, positive developments are emerging in the pharmaceutical space. Barclays issued “buy” ratings for Bristol Myers, citing pipeline advancements, and Eli Lilly, a clear leader in the obesity treatment market. The firm also favors Merck. The pharmaceutical industry’s focus on unmet medical needs, particularly in metabolic diseases, presents substantial long-term investment opportunities.

**7. Retail Giant Costco: Navigating Tariffs and Consumer Loyalty**
Citi slightly increased its price target on Costco, a move that seemed to coincide with anticipation of a Supreme Court ruling on tariffs that could impact the retail giant. Costco has been actively contesting certain tariff policies, seeking refunds. This legal and policy battle, coupled with Costco’s strong consumer loyalty and unique membership model, makes it a compelling case study in how large retailers navigate complex trade landscapes.

**8. Beverage Sector Outlook: Molson Coors’ Guidance and Shifting Consumption Habits**
Barclays lowered its price target and maintained a “sell” rating on Molson Coors, citing softer-than-expected guidance for 2026. Analysts suggest the company’s initial projections may have been overly optimistic. Broader trends in the beverage sector, including evolving consumer preferences away from alcohol and the impact of trade policies like aluminum tariffs on brewers, warrant caution. This indicates a potential shift in consumer spending patterns and operational challenges for established beverage companies.

**9. Live Entertainment Resilience: Ticketmaster Parent Beats Expectations**
Live Nation’s shares surged following a strong quarterly revenue report, driven by robust demand for concerts and live events. The company’s outlook for 2026 appears exceptionally strong, with significant growth in early ticket sales and a high percentage of large-venue shows already booked. This trend reinforces the notion that consumers are prioritizing experiences, such as travel and entertainment, even amidst economic uncertainties. This demonstrates a sustained consumer willingness to spend on discretionary categories.

**10. BNPL Sector Challenges: Klarna’s Disappointing Results and Affirm’s Appeal**
Klarna delivered a challenging quarterly performance, reporting wider-than-expected losses and missing key financial outlook metrics for 2026. This led to significant price target reductions from major financial institutions. While the “buy now, pay later” (BNPL) sector faces increased regulatory scrutiny and competitive pressures, Affirm has emerged as a preferred play for many investors due to its operational track record and strategic positioning within the evolving fintech landscape. The path forward for BNPL providers will hinge on profitability and sustainable growth models.