Every weekday, the CNBC Investing Club with Jim Cramer publishes Homestretch, a helpful afternoon update just in time for the final hour of trading on Wall Street. (We will no longer be recording audio, so we can get this new written article to members as quickly as possible.) No big changes: The market continues to hold in a tight range on Tuesday, following three straight sessions of muted action as investors and traders digest a four-week rally that took major stock benchmarks to new all-time highs. Another reason for the recent uneventful trading could be that everyone is waiting for Nvidia to report its earnings after the closing bell on Wednesday. Nvidia is one of our two “own it, don't trade it” stocks. (Apple is the other). With analysts expecting bigger and bigger things from Nvidia, the stakes are high for the AI chip powerhouse to continue beating quarterly estimates and raising future guidance. Updates to Nvidia's next-generation Blackwell chip platform, scheduled for release later this year, and its software business will be key elements to watch. Baby formula suits: Activist investment group Eminence Capital has taken a stake of at least 0.5% in Reckitt Benckiser, according to the Financial Times. Eminence's reported position follows Reckitt's liquidation to a record low in March due to concerns over baby formula litigation. Sources told the Financial Times that other activist investors are interested in Reckitt because they also believe the stock has been too affected by an Illinois jury verdict, which the company has said it will appeal. The interest in Reckitt is notable because the club's name, Abbott Labs, has also been affected by the Illinois ruling. Abbott makes a competing baby formula and faces similar lawsuits, alleging the companies failed to warn about the risks of their products. While we were in Abbott shortly before liquidation, as was Eminence in Reckitt, we have slowly built our position on this weakness. In the two days following the verdict against Reckitt, Abbott lost more than $10 billion in market capitalization despite many analysts' assumptions that Abbott's liability in any settlement of its baby formula lawsuits would be only hundreds of millions of dollars. The stock has continued to fall over the months, even as the company reported a better-than-expected quarter last month. It also raised its outlook for the full year, something it hasn't done after the first quarter in years. ABT YTD mountain Abbott YTD Abbott's next baby formula event is a state trial in St. Louis that begins in July. We understand that St. Louis is very plaintiff-friendly, so unfortunately, we do not expect this pending litigation to go away anytime soon. However, we are willing to be patient and continue to use stock weakness as buying opportunities because Abbott has the medical community on its side, and the loss of more than $10 billion in market capitalization far exceeds what it could seem like a possible agreement. Once the market realizes that Abbott's exposure is much less than what its shares have been penalized for, investors will finally focus on how the business is actually doing. And we know that the fundamentals are solid. Next up: After the closing bell, homebuilder Toll Brothers will report earnings. On Wednesday morning, we'll hear from the club name TJX Companies, owner of TJ Maxx, Marshalls and HomeGoods. We focus on the off-price retail group's comparable sales growth, margins and what management has to say about the availability of quality branded merchandise in the market. Target, Analog Devices and Williams-Sonoma will also report Wednesday. (See here for a complete list of Jim Cramer's Charitable Trust holdings.) 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 fund'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 INVESTMENT 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 THE RECEIPT OF ANY INFORMATION PROVIDED IN RELATION TO THE INVESTMENT CLUB. NO SPECIFIC RESULTS OR BENEFITS ARE GUARANTEED.
Every weekday, the CNBC Investing Club with Jim Cramer publishes Homestretch, a helpful afternoon update just in time for the final hour of trading on Wall Street. (We will no longer be recording audio, so we can get this new written feature to members as quickly as possible.)
