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 rose on Wednesday thanks to this week's second encouraging inflation report and a string of strong bank earnings. The consumer price index, excluding food and energy, was slightly below expectations ahead of Wednesday's open, a day after a measure of wholesale inflation did the same. The odds that the Federal Reserve will cut interest rates twice this year increased after Wednesday's CPI release, according to the CME FedWatch tool. The interesting December jobs report released on Friday had caused investors to reconsider the path forward for cutting rates. The financial sector was one of four S&P 500 sectors, out of 11, that rose more than 2% on Wednesday. Communication services, discretionary consumption and technology are the others. Earnings reports fueled the move in finance. The BlackRock club name rose about 5% after its results showed that recent sellers abandoned the bandwagon too soon. Wall Street wisely focused on the big picture with portfolio stock Wells Fargo, sending its shares up 7%. Meanwhile, Goldman Sachs validated our recent exit from Morgan Stanley as executives were optimistic about deal activity in 2025. Bristol View: The biggest market for Bristol Myers Squibb's new schizophrenia treatment may, in fact, be that of patients with Alzheimer's disease. This was stated by company leaders who spoke with our CNBC colleague Annika Kim Constantino at the JPMorgan Healthcare Conference in San Francisco. Here is an excerpt from his story. In an interview, company executives said each treatment use they are studying for Cobenfy has multimillion-dollar potential, including Alzheimer's disease psychosis, Alzheimer's agitation and cognition, bipolar disease and autism. But Alzheimer's is “a really big market here,” Bristol Myers Squibb Chief Financial Officer David Elkins told CNBC. …There are nearly 6 million patients in the U.S. with Alzheimer's, and about half of them have psychosis, or symptoms such as hallucinations and delusions, Elkins said. Cobenfy could be the first drug approved specifically for Alzheimer's-related psychosis, chief commercialization officer Adam Lenkowsky said. Cobenfy's long-term potential is at the heart of our investment thesis at Bristol Myers, and its opportunity in areas beyond schizophrenia features in our optimism. Jim Cramer has said that Cobenfy's annual sales could one day reach $10 billion when all its possible uses are taken into account. We will be watching closely for results from Bristol Myers' late-stage trial on Alzheimer's-related psychosis, which are expected to be published later this year. Shares of Bristol Myers rose modestly on Wednesday. Portfolio member Eli Lilly also has exposure to the Alzheimer's treatment market, but in a different way. Lilly's Kisunla, approved by U.S. regulators last year, seeks to slow the real progression of the memory-robbing disease by eliminating abnormal clumps of proteins in the brains of Alzheimer's patients. The drug has had a slow commercial start. Biotech Exports: Club names GE Healthcare and Danaher gave back early gains Wednesday on news of new Commerce Department controls on exports of biotech equipment to China. The agency cited national security concerns and said biotech tools could be used for “enhancing human performance, brain-machine interfaces, biologically inspired synthetic materials, and possibly biological weapons.” Research analysts at Leerink said Wednesday that the rule “seems limited.” That could limit the impact on Danaher. Additionally, Danaher can source almost its entire portfolio locally in China, which should help the company overcome controls. We don't think GE Healthcare sells any products linked to this ruling, but the stock still fell on sympathy. It also has a strong manufacturing presence in China. The new biotech export rules are part of the Biden administration's broader strategy to restrict the flow of cutting-edge American technology to China. The White House fears that the Chinese government could use access to such technology to strengthen its military capabilities. On Monday, the Commerce Department also proposed new restrictions on AI chip exports, weighing on Nvidia's portfolio stocks in consecutive sessions. However, Nvidia shares rose 3% on Wednesday, snapping a five-session losing streak. China Update: Before the export ruling came to light, GEHC shares opened higher on Wednesday, the morning after what we would describe as a sigh of relief from management at its presentation at the JPMorgan Healthcare. The main takeaway: China is doing a little better than expected with signs of increased activity. While there may be signs of green shoots, visibility remains low and management was wise to keep expectations low while reiterating caution. Jeff Marks, director of portfolio analysis at the Investing Club, said Wednesday that he's glad business in the world's second-largest economy is not getting worse as the company waits for the economic stimulus promised by the Chinese government to take effect. Following strong quarterly results from our three financial portfolio companies, bank earnings continue Thursday morning with Bank of America and Morgan Stanley. We'll look for Nvidia and Broadcom readings on Taiwan Semiconductor Manufacturing Company's pre-market earnings. In addition to the earnings, the government's readout on December retail sales will be released at 8:30 a.m. ET. While not adjusted for inflation, we'll look at how shoppers felt during the final month of the holiday shopping season in the context of the cooler consumer inflation trends detailed Wednesday morning. 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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.
