Good times are still on Wall Street. That momentum will be put to the test during the intensifying fiscal year-end season. The S&P 500 index closed at a record high Friday, buoyed by strong quarterly results from the club that owns Wells Fargo & Co. and other major financial firms, reinforcing views on the health of the U.S. economy. The index rose 1.1%, marking its fifth consecutive week of positive growth. Meanwhile, the Dow Jones Industrial Average rose 1.2% for the week and closed at a record high Friday. The tech-heavy Nasdaq Composite Index rose 1.1% and is now just 1.6% below its July high. The third-quarter earnings calendar will start to get crowded over the next few days, featuring major U.S. banks, health care heavyweights, and several industrial and tech companies. All eyes will be on the numbers and what management is saying about the outlook — and rightfully so, according to Jim Cramer. On Thursday morning, when the consumer price index for September was slightly higher than expected, Jim warned investors not to sweat every line of the economic report. “Keep your eyes on the prize,” he said. Right now, he said, the prizes are “companies that are trying to make money.” The summary from the economic indicators of the last few days is of paramount importance. This means that inflation is generally on the decline. The annual CPI inflation rate in September was 2.4%, slightly above consensus but below August’s 2.5%. Friday’s survey of wholesale inflation showed the producer price index unchanged month-on-month. Economists had expected a 0.1% rise from the previous month. We pretty much sat still as the market went back to record. Tuesday’s exit from Procter & Gamble was the only trade of the week. Simply put, with the Federal Reserve embarking on an easing cycle and the economy remaining strong, defensive stocks like the makers of Crest toothpaste and Dawn soap didn’t seem like a good fit for a portfolio. Wells Fargo and JPMorgan reinforced that idea in their earnings reports Friday. Shares of both banks soared, with Wells up 5.6% and JPMorgan up 4.4%, with the financial sector contributing to the rise on the S&P 500 leaderboard this week. Tech stocks rose 2.5%, followed by industrial and financial stocks, which rose 2.1% and 1.8%, respectively. Public works and communications services were the main laggards, with sales down 2.6% and 1.4%, respectively. Over the coming week, a number of influential companies are scheduled to report on Tuesday, including UnitedHealth and Goldman Sachs. ASML and Taiwan Semiconductor Manufacturing Company on Wednesday. Thursday’s talk will provide a glimpse into the current state of AI trading before mega-cap tech companies report later this month. It plans to hear from Club Holdings, Morgan Stanley and Abbott Laboratories on Wednesday morning. Morgan Stanley: Continued recovery in the investment banking industry will be central. This was a key theme in the second quarter, and we expect the trend to continue for Morgan Stanley from July through September. There was a bright spot on Friday, with JPMorgan reporting better-than-expected numbers in its investment banking division. Morgan Stanley stock had been underperforming for some time, and Jim began to openly question whether owning rival Goldman Sachs was a better idea. But Morgan Stanley has been strong lately. The company’s stock price has risen more than 14% over the past month, closing Friday at a record high of $110.91 per share. We hope Wednesday’s Morgan Stanley results will provide further clarity on our next move. Any sign that the company’s growing wealth management division is gaining footing would be welcome news. Abbott Laboratories: Medical product maker’s legal battle over infant formula for premature babies comes as three U.S. health agencies recently pushed back against claims that formulas like Abbott’s cause an intestinal disease commonly abbreviated as NEC. It looks like it has become easier to handle. To be sure, Abbott Laboratories is not out of the woods yet, as a second trial on the issue is underway in St. Louis. Nevertheless, it is a major problem that government agencies, including the Food and Drug Administration, are giving support to this prescription. “If you clear the lawsuit, (the stock price) will go to $125,” Jim predicted Friday. What makes it so positive? Mr. Abbott’s strong fundamentals are obscured by legal issues. In that regard, we will be keeping an eye on the U.S. launch of Abbott’s over-the-counter continuous glucose monitoring system and updates on the overall status of the medical device business. Weaknesses in the second quarter were nutrition and established pharmaceuticals, but even with them, Abbott reported back-to-back beat-and-raise quarters. The third one is also good. One Week Ahead Monday, October 14th Before the Bell: Charles Schwab (SCHW) Tuesday, October 15th Before the Bell: Walgreens Boots Alliance (WBA), UnitedHealth (UNH), Citigroup (C), Bank of America (BAC) ), Johnson & Johnson (JNJ) and Goldman Sachs (GS) After the bell: United Airlines (UAL), Interactive Brokers (IBKR) and JB Hunt (JBHT) Wednesday, October 16 Before the bell: Morgan・Stanley (MS), Abbott Laboratories (ABT), ASML (ASML), US Bancorp (USB), Citizens (CFG), and Prologis (PLD) After Bell: Alcoa (AA), PPG Industries (PPG), CSX ( CSX), Kinder Morgan (KMI), Discover (DFS) and Crown Castle (CCI) Thursday, October 17th 8:30am ET 8:30am ET: Retail Sales 8:30 AM ET: Industrial Production and Capacity Utilization Before the Bell: Taiwan Semi (TSM) ), Travelers (TRV), Elevance (ELV), Huntington Bancshares (HBAN), Blackstone (BX), Trust ( TFC), KeyCorp (KEY) After Bell: Netflix (NFLX), Intuitive Surgical (ISRG), Crown Holdings ( CCK) Friday, October 18, 8:30 a.m. ET: Housing Starts and Building Permit Bell Previous: American Express (AXP), SLB (SLB), and Procter & Gamble (PG) (The Jim Cramer Charitable Trust has long been WFC, MS, and ABT. See here for a complete list of stocks. ) As a subscriber to Jim Cramer’s CNBC Investment Club, you will receive trade alerts before Jim makes a trade. After Jim sends a trade alert, he waits 45 minutes before buying or selling stocks in his charitable trust’s portfolio. If Jim talks about a stock on CNBC TV, he will issue a trade alert and then wait 72 hours before executing the trade. The above investment club information is subject to our Terms of Use and Privacy Policy, along with our disclaimer. No fiduciary duties or obligations exist or arise from your receipt of information provided in connection with the Investment Club. No specific results or benefits are guaranteed.
View of the New York Stock Exchange building in the Financial District on August 5, 2024 in New York City.
Charlie Tribalew | AFP | Getty Images
Good times are still on Wall Street. That momentum will be put to the test during the intensifying fiscal year-end season.
