Each weekday, the CNBC Investing Club with Jim Cramer publishes Homestretch, a handy evening update, just in time for the final hour of trading on Wall Street. Market Declines: The S&P 500 gave back earlier gains and fell during the afternoon on Tuesday, led by mega-cap tech stocks. Ahead of the Fed’s post-meeting press conference on Wednesday afternoon, when central bank chief Jerome Powell is expected to signal that interest rate cuts are coming, the market continued to dump stocks of companies that don’t need lower rates to outperform and raise them. Instead, investors continued to buy stocks of companies whose outlook is much improved in a lower rate environment. In an example of this dynamic, Club name Nvidia doesn’t need rate cuts to spur demand for its AI GPUs, but lower rates could create a windfall for Stanley Black & Decker if lower mortgage rates reignite sales of older homes in need of repairs and remodeling. Nvidia fell 5% on Tuesday. Stanley Black & Decker, also a portfolio holding, rose more than 9% in an earnings-fueled rally that extended last week’s surge. We don’t know how long this rotation will last, but that’s what’s happening right now. Banks Shine: Lost in the shuffle of all the earlier earnings and another tech selloff was a bullish note on large-cap banks from Morgan Stanley analyst Betsy Graseck. We read Graseck closely because of her previous big calls. In January, Graseck and his team upgraded their view on large-cap banks to “attractive” and upgraded Citi, Goldman Sachs and Bank of America to an overweight equivalent to buy. At the time, Morgan Stanley already had overweight ratings on Wells Fargo and JPMorgan. It was a good call. Now, Graseck is back at it again raising price targets on nearly all the banks in his coverage after second-quarter earnings. In his review of the quarter, he found that the capital markets rally is only in its second inning, excess capital supports higher buybacks next year and net interest income is starting to reflect for a handful of banks. Longer term, Grasck thinks banks are leaning toward his “bull case” on lower expected credit losses. Up next: It’s a big earnings night with Club names Microsoft, Advanced Micro Devices and Starbucks scheduled to report. Some other names to watch include Arista Networks, Pinterest, First Solar, Caesars Entertainment, and Electronics Arts. Ahead of Wednesday’s open, we get earnings from Club stocks GE Healthcare and DuPont. Boeing, Norwegian Cruise Line, Mastercard, Humana, Trane Technologies, and Kraft Heinz are also set to report. Club stock Meta Platforms will post earnings after Wednesday’s close. (See a complete list of stocks in the Jim Cramer Charitable Trust here.) As a subscriber to the CNBC Investment Club with Jim Cramer, you’ll 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 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 FOREGOING INVESTMENT CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND OUR DISCLAIMER. NO FIDUCIARY OBLIGATION OR DUTY EXISTS OR IS CREATED BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTMENT CLUB. NO SPECIFIC RESULTS OR EARNINGS ARE GUARANTEED.
Every weekday, CNBC's Investment Club with Jim Cramer publishes Homestretch, a practical afternoon update, just in time for the final hour of trading on Wall Street.
