Every weekday, CNBC Investing Club with Jim Cramer publishes the Homestretch – an actionable afternoon update, just in time for the final hour of trading on Wall Street. (We are no longer recording audio so we can get this new article to members as quickly as possible.) Off the lows: U.S. stocks were wobbly on Thursday but traded well off their worst levels of the session . The market was already heading into a bearish session due to disappointing reactions to the results, which weren’t all bad. There have been numerous earnings increases over the past 24 hours, but the lack of an upward outlook for the full year has fallen short of the high bars set by bullish investors. In addition to the drop in profits caused by the Meta Platforms club name, it was concerns about stagflation that rattled Wall Street after the first quarter GDP report showed tepid economic growth and continued pressure on price. Stagflation occurs when economic growth stagnates, but inflation remains high. The bond market has not been kind to stock bulls, with the 10-year Treasury yield hitting its highest level in more than five months. However, Thursday afternoon’s auction of $44 billion in 7-year notes was largely without fireworks. Pockets of Green: On days when the market is down significantly early in the session, it’s always interesting to see which groups of stocks rebound first. Unfazed by rising bond yields, utilities led the pack for most of the day. We understand the defensive bias if the market is worried about sluggish economic growth – but energy, materials and industrials have also advanced. Tech started the day soft, but a rally in semiconductor stocks, including Club names Nvidia and Broadcom, helped push the sector back into positive territory. It helps that Meta is sending huge checks to both companies to support its AI initiatives. Opportunity in Meta? This is one of the biggest drags on the market after providing weak revenue guidance for the second quarter. However, the stock reached its worst levels of Thursday’s session. “We sold it for $490 in March. You know what we want to do now? Buy it back. Because Mark Zuckerberg has earned our trust and we’re not going to abandon him just because he sees an opportunity that the rest of us don’t, to monetize the AI generation,” Jim Cramer said. Club Results: Microsoft and Alphabet report after the bell Thursday. The bar should be a little easier due to Thursday’s market pullback. One thing to remember about Microsoft is that it provides earnings guidance right before the Q&A conference call, so you can’t make a full judgment on the stock until you listen to CFO Amy Hood. Clearly, the significant weightings of these two giants in the S&P 500 make them key reports for market sentiment. What they have to say about AI capital spending will also impact the market. This is how Nvidia and Broadcom could bounce back on a down day after hearing Meta Platforms. Busy Friday: The next inflation test will come in the morning when the personal consumption expenditures price index for March is released. Core PCE, which excludes food and energy prices, is the Federal Reserve’s preferred measure of inflation. Friday also brings earnings from Exxon Mobil, Chevron, Abbvie, Colgate-Palmolive and HCA Holdings. (See here for a complete list of Jim Cramer’s Charitable Trust stocks.) As a subscriber to CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after a trade alert is sent before buying or selling a stock in his charity’s portfolio. If Jim talked about a stock on CNBC TV, he waits 72 hours after the trade alert is issued before executing the trade. THE ABOVE INVESTMENT CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, AS WELL AS OUR DISCLAIMER. NO OBLIGATION OR FIDUCIARY OBLIGATION EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTMENT CLUB. NO SPECIFIC RESULTS OR PROFITS ARE GUARANTEED.
Every weekday, CNBC Investing Club with Jim Cramer publishes the Homestretch – an actionable afternoon update, just in time for the final hour of trading on Wall Street. (We are no longer recording audio so we can get this new written feature out to members as quickly as possible.)
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