Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch — an actionable afternoon update, just in time for the last hour of trading on Wall Street. Stock spotlight: The market is flattish Tuesday, overcoming some selling pressure at the start of the session. Longtime Club holding Apple is the top stock in the S & P 500 , rallying more than 6% to a fresh all-time high. Apple’s surge follows a roughly 2% decline Monday as the iPhone maker presented its generative artificial intelligence strategy at its annual developer conference event. The difference between the sessions? The market has finally realized Apple will be a big AI beneficiary. We pointed this out late Monday , and it’s pretty simple: If you want to take advantage of the new AI features the company unveiled Monday, you’ll probably need to upgrade your model. All those phones people bought during the Covid-19 pandemic need to be refreshed, supporting the bull case we argued for months as Wall Street grew impatient about its standing in the AI race. The market also found some support from falling bond yields. The yield on the benchmark 10-year Treasury fell about 4 basis points to 4.43% after a strong response to a $39 billion auction of 10-year notes. Shares of Club holding Stanley Black & Decker — which is levered to the rate-sensitive housing market — added more than 2% Tuesday. “Notice where Stanley Black & Decker is when you have a good day for the bonds,” Jim Cramer pointed out. “You put together two good days, and the thing is at $90.” Jim’s quick hits: We most recently added to our DuPont position last Friday, noting how much upside the stock has to our $100 sum-of-the-parts-based price target . The company is breaking itself up into three separate firms. “I was adamant about buying Dupont here on ‘Squawk on the Street’ this morning because I think that people are underestimating the power of [now-Chairman] Ed Breen to make something happen with these three pieces of paper,” Jim said. “It’s pretty absurd given that you are investing in the capstone of his career.” Our full look at the FDA advisory panel’s endorsement of Eli Lilly ‘s Alzheimer’s drug will be out later Tuesday. Don’t lose sight of the possible benefit to fellow Club name GE Healthcare , which makes MRI machines. “It is very clear to me that many people who want the Eli Lilly Alzheimer’s drug won’t be able to afford it without health insurance and health insurers will use MRIs to keep you from getting them,” Jim said. “They, therefore, will see incredible demand.” Another role GE Healthcare has in the Alzheimer’s treatment buildout is through diagnostic agent Vizamyl, which is an amyloid imaging agent used to measure plaque and aid in patient diagnoses. Banks struggle: The financials are the worst-performing sector Tuesday on worries about commercial real estate loans as well as profitability after regional lender Huntington Bancshares cut its net interest income outlook Monday. Wells Fargo may be getting caught up in the bank sell-off, but at least it is not seeing similar pressure on net interest income versus its prior expectation. At an industry conference Tuesday, CFO Michael Santomassimo reiterated guidance for that metric to be down 7% to 9% year over year. We still think this outlook could be conservative since the Federal Reserve’s higher-for-longer policy is generally a tailwind to net interest income. However, other factors like muted loan demand have prevented Wells from raising this year. As for commercial real estate, Santomassimo pointed out that “the issues are really the institutional office space, and it’s a wide range of outcomes now.” It’s very dependent on location and the age of the building. However, Santomassimo added that “we feel like we’re appropriately reserved for a range of outcomes there. And it’s going to take some time to play out as we go.” Santomassimo was also asked about the slew of senior investment banking hires that our Investing Club reporter Morgan Chittum highlighted last month. He said, “We’ve always had an investment banking business. And so we started putting more focus on it back in early 2021. … We’ve been hiring people in very targeted sectors and targeted areas across the product set.” There are more hires to come, he added. Tune in later : Coterra Energy CEO Tom Jorden is set to appear on “Mad Money” on Tuesday. One of the key parts of the Coterra thesis was its ability to flex capital investment between oil and natural gas, based on which commodity made the most economic sense. At the start of the year, Coterra deferred a lot of activity in the Appalachian region’s Marcellus Shale because it didn’t think it would get a good return on that investment. But now that natural gas prices are back above $3, we’re curious to hear Jorden’s latest outlook. Another question we have is on shareholder returns. One of the takeaways we had after the first-quarter earnings call was that the company seemed inclined on stepping up its buyback at these cheap levels. Consolidation within the oil and gas industry has also been a hot theme, so we’re curious on where Jorden thinks Coterra stands in all of this. Up next: Wednesday is a big day. It all starts at 8:30 a.m. ET when the May consumer price index report is released. Then, at 2 p.m. ET, we’ll see the Fed rate decision and an updated summary of economic projections, which includes the so-called dot plots. We’ll be looking to see how many rate cuts Fed members expect by year-end. At 2:30 p.m. ET, Fed Chair Jerome Powell will share the committee’s view on monetary policy. After the closing bell, Club holding Broadcom will report, and we’ll be listening for AI commentary, updates on the VMware integration, and the latest news on the legacy part of its semiconductor business, which is currently experiencing a cyclical downturn. (See here for a full list of the stocks in Jim Cramer’s Charitable Trust.) 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 trust’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 INVESTING 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 YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch — an actionable afternoon update, just in time for the last hour of trading on Wall Street.
Read the full article here
