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.) Market Talk: The S&P 500 and Nasdaq jumped to new intraday highs on Wednesday, extending gains from the previous session. rally on the last day. In fact, the S&P 500 surpassed 5,300 points for the first time in history. Meanwhile, the Dow Jones was about half a percentage point away from its all-time high. The catalyst for Wednesday's session was a colder-than-expected April consumer price index, which caused a rally in Treasury bond prices and a drop in yields (based on their inverse relationship). As a result, market odds have increased that the Federal Reserve will make multiple interest rate cuts this year. A weak April retail sales report, also released Wednesday, was seen as a “bad news but good news situation” as cooling demand for goods could help ease inflation. The only thing we are keeping an eye on in this rally is how overbought the stock market has become. You have to go back to last December to find a time when the S&P 500 short-range oscillator was so overbought. To be fair, it only took a shallow drop back then to fix that overbought condition: the S&P 500 fell about 2% from December 28, 2023 to January 4. However, the market needed a few weeks to digest the end of 2023 before it rose again. New High: We had a chance to catch up with Danaher's bullish presentation at the Bank of America Healthcare conference on Tuesday. We thought management's talk was consistent with what we heard last month when the medical diagnostics and life sciences firm delivered progress across its three core businesses. We took it as a sign that the long-awaited change in the biotech industry had finally arrived. On the call, Danaher went on to note that bioprocessing inventory destocking will be behind us in the second quarter, driven by normalization of inventory levels and order patterns from large customers. The company continued to cautiously anticipate low activity in China. One point from the conference that we found particularly interesting: If drug prices drop as a result of the Inflation Reduction Act, Danaher could see a tailwind under the assumption that the volumes and consumption of those drugs by part of the patients would increase. Danaher's business is primarily consumables, meaning it is volume-based. Danaher shares rose more than 1% on Wednesday, adding to gains of 3% the previous day. The move puts the stock at a new 52-week high, although still about $30 per share below its Covid pandemic record. The stock's strong performance over the past year is a good example of how it can pay to continue investing in a high-quality company while facing temporary inventory challenges. In these cases, the stock price will likely bottom long before its business cycle does. Brief comments from Cramer “It could be a big problem for unemployment claims if Red Lobster abruptly closed about 50 restaurants. That's a lot of employees,” Jim Cramer said. “Disney doesn't deserve this drop because it's becoming a very cheap stock, but people don't think Disney is serious about layoffs now. No, Peltz.” “Data centers hog natural gas. I think a lot of natural gas plants will be built to meet energy demand.” Next up: Cisco Systems reports after the closing bell on Wednesday and we're interested to hear what the networking equipment company has to say about its acquisition of Splunk. Thursday morning we'll hear from Walmart, Deere and a couple of Chinese companies on Baidu and JD.com. (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.)
