Every weekday, the CNBC Investment Club with Jim Cramer publishes Homestretch, a handy evening update, just in time for the final hour of trading on Wall Street. Market moves: The S&P 500 was on track for small gains after a solid rally last Friday. There’s still some market rotation, but this time it’s the opposite of the flight from tech that dominated the past few weeks. The so-called Magnificent Seven stocks (six of which we own — Apple, Alphabet, Amazon, Meta Platforms, Microsoft and Nvidia) performed better on Monday. Small-caps, as measured by the Russell 2000, lagged. So far this month, the Russell is up nearly 9%, the Dow is up 3.5%, the S&P 500 is basically flat and the Nasdaq is down nearly 2%. Trial Verdict: We're encouraged by how Abbott Laboratories' stock, aka Club, has pulled back quite a bit from its morning lows despite being ordered to pay $495 million in its verdict over premature baby formula. The small pullback could be a sign that the bad news was already priced in, given the tens of billions in market cap already lost since March. Or it could be a sign that Wall Street recognizes what a joke this verdict was. Abbott CEO Robert Ford believes that recalling these products would cause a public health crisis. What other option does Abbott have to limit its litigation risk? If the stock is only down 1% on the back of this bad news, we can't help but wonder what the payoff would be if they start winning cases or if there's a settlement. Abbott is still a ways away from either happening, but this type of exercise helps frame our risk/reward going forward. IPO Talks: Late Friday, shares of Honeywell, which goes by Club, briefly rose a few percent following a Bloomberg story that said the company is considering an initial public offering of its Quantinuum quantum computing business as early as next year. The valuation talked about was around $10 billion. We view a move like this as a slight positive and possible acknowledgement that Honeywell plans to monetize this business at a growing valuation. But we're not surprised to see the stock quickly give back those gains. “Honeywell isn't getting any credit for Quantinuum because the company didn't deliver earnings last week. The market won't let them go,” Jim Cramer said Monday afternoon. Honeywell reported solid revenue and adjusted earnings per share that beat expectations in the second quarter, but it disappointingly cut its full-year adjusted EPS outlook due to slower improvement in its short-cycle businesses and acquisition-related costs. Up next: Tuesday marks the start of Club's second-quarter earnings season. Before the opening bell, we'll get numbers from Procter & Gamble and Stanley Black & Decker. We made two small sales in Stanley Black & Decker with gains we didn't want to give back. Twelve other Club names will exit during the week with gains, including Advanced Micro Devices, Microsoft, and Starbucks after Tuesday's close. On Monday, we bought more Starbucks stock — not as a statement before quarterly results, but to make good on what we had signaled a week ago when we upgraded the stock to our 1-equivalent buy rating after learning that activist firm Elliott Management acquired a stake in the coffee giant. (See a complete list of the stocks in Jim Cramer's 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, please wait 72 hours after the trade alert is issued before executing the trade. THE FOREGOING INVESTMENT CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, ALONG WITH OUR DISCLAIMER. NO FIDUCIARY OBLIGATION OR DUTY EXISTS OR IS CREATED BY VIRTUE OF THE RECEPTION 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.
