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. Markets: Wall Street is under pressure Thursday, sending the tech-heavy Nasdaq Composite down more than 2%. The S&P 500 is down more than 1%, while the Dow Jones Industrial Average lost about 260 points, or 0.6%. Selling in Microsoft and Meta Platforms after Wednesday night's earnings results weighed on the Nasdaq and S&P 500. Another factor contributing to the weakness: the closely watched 10-year Treasury yield continued rising, exceeding 4.3% at one point. in the session. Investors are gearing up for Friday morning's nonfarm payrolls report, which is expected to show the U.S. economy added 100,000 jobs in October while the unemployment rate remains unchanged at 4.1%. But many expect noise in the numbers due to the impact of recent hurricanes and the Boeing attack. The data will help shape Wall Street's expectations about the path of Federal Reserve policy. Traders are currently pricing in a roughly 95% chance of a quarter-point interest rate cut at the central bank meeting next week. Earlier Thursday, the Federal Reserve's favorite inflation gauge, the PCE Price Index, met expectations and rose 2.1% in September. Cyber deal: Morgan Stanley published a note Thursday morning about holding company Club Palo Alto Networks that caught our attention, discussing reports about the five-year, roughly $1 billion software licensing deal with the Department of Defense by the leader in cybersecurity. A Palo Alto Networks executive also posted about it on LinkedIn, without mentioning the dollar amount or duration. “While the timing of bookings or revenue recognition remains unclear, we believe this could provide tailwinds for several years,” Morgan Stanley analysts wrote to clients. These headlines could be helping support Palo Alto stock in Thursday's market decline. The stock swung between slight gains and losses, holding up much better than an exchange-traded fund that tracks the cybersecurity industry, which fell more than 1% on the session. Shares of our other cyber holding company, CrowdStrike, fell nearly 4% on Thursday. To be sure, Morgan Stanley attempted to temper expectations about the Palo Alto deal. The firm noted, for example, that the contract was awarded through software reseller Carahsoft, meaning it “likely includes ~15% reseller margin for Carahsoft.” However, the analysts said they “believe the award of this contract…suggests that the Department of Defense's big but elusive opportunity may finally be coming to fruition.” Palo Alto did not respond to CNBC's request for comment on the licensing agreement. The company experienced some weakness in its business with the federal government earlier this year and also lowered expectations about the coming quarters, adding to the disarray in its February earnings report. More recently, in an August earnings conference call, Palo Alto CEO Nikesh Arora said the company continued to have “a set of moderate expectations” around its business with the federal government because of the election. Trial decision looms: We're gearing up for a verdict soon in Abbott Labs' latest trial over allegations that its specialized formula for premature babies causes an intestinal disease commonly abbreviated to NEC. The company has strongly denied the claims and recently received backing from major U.S. health agencies, which in a statement earlier this month supported the use of formulas like Abbott's to treat premature babies. “There is no conclusive evidence that premature infant formula causes NEC,” the agencies wrote. However, the judge at Abbott's trial, held in Missouri's 22nd Judicial Circuit, did not allow that statement to be shown to jurors in the case. For this reason, we do not expect the Club's holding company to receive a favorable verdict. A loss in the case could hurt the stock, but that could present a buying opportunity, according to director of portfolio analysis Jeff Marks. The reason is that, while Abbott faces additional lawsuits over its formula, we hope that the statement from US health agencies will be allowed as evidence in future cases. Next up: Apple, Amazon and Coterra Energy will report their quarterly results after the closing bell on Thursday. Outside of the portfolio, we will also hear from Intel, US Steel and Juniper Networks. As mentioned, Friday's big event is the October Nonfarm Payrolls report. Chevron, Exxon Mobil and chemical maker LyondellBasell Industries were among notable earnings reports Friday. 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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.
