Every weekday, Jim Cramer’s CNBC Investment Club releases the Homestretch, a practical afternoon update to coincide with the last hour of trading on Wall Street. Markets: The S&P 500 is up slightly, on pace to end a three-day losing streak, but is trading volatile. The tech-heavy Nasdaq has outperformed the S&P 500 and the Dow Jones Industrial Average, thanks to Tesla’s 20% profit increase and positive outlook. It also has some strength in other parts of the broader technology complex, such as software. Salesforce, Palo Alto Networks, and CrowdStrike are among the club names on the rise after ServiceNow’s strong quarter. Salesforce also had its price target raised by Oppenheimer from $300 to $330 per share. More broadly, the stock market may be getting some help from the bond market. The 10-year U.S. Treasury yield fell below 4.2% on Wednesday, after hitting its highest level since late July. Industry pain: Industry is going through tough times. Honeywell and Dover weren’t the only portfolio stocks to fall after earnings. Carrier Global was the worst performing stock in the group due to disappointing HVAC sales. Aerospace manufacturer Textron Co. fell after a strike by its machinists’ union put pressure on its results, but it missed profit estimates, and railroad operator Union Pacific Co. suffered both sales and profits. missed. To be sure, United Parcel Service is profitable. But sentiment was at its worst after Barclays downgraded UPS to “equivalent to sell” on Monday, with the stock opening 16% down year-to-date. Expectations are key during earnings season. A better-than-expected quarter despite lower standards can result in a more positive stock reaction on the day than a bang-up result from an established outperformer. This is a good lesson to remember for the future. Although we are still in the early stages of third-quarter earnings season, some of the sector’s biggest upside surprises are coming from companies associated with aerospace, data center, and power generation themes. Other regions are seeing some degree of caution related to election uncertainty, while others are still feeling the effects of rising interest rates. Dover CEO Richard Tobin spoke about the development during the company’s third-quarter earnings call on Thursday. “I wish interest rates had had a bigger impact on volume in the second half of 2024,” Tobin said. “But I think there’s a sense of a little bit of caution in the public eye because of election uncertainty and a variety of other reasons.”On the bright side, especially if the Federal Reserve continues to ease monetary policy, That means activity should improve in the coming quarters. That’s why we like to stick with companies like Dover and Honeywell. Next up, we’ll take a look at the after-the-clock earnings for Dexcom, Deckers Outdoor, Skechers, Edwards Lifesciences, and Boston Beer. Dexcom is a competitor to club name Abbott Laboratories in the continuous glucose monitor market, so we’re looking for insight into the competitive dynamics of this growing sector. When Dexcom last reported, the company’s stock plummeted 41% on light selling and guidance. Friday’s earnings calendar is brighter with reports from Colgate-Palmolive, Centene, Rubbermaid Co. owner Newell Brands, AutoNation and New York Community Bancorp. In terms of economic indicators, the Department of Commerce and the University of Michigan’s monthly consumer sentiment survey shows orders for durable goods. (See here for a complete list of Jim Cramer Charitable Trust 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.
Every weekday, Jim Cramer’s CNBC Investment Club releases the Homestretch, a practical afternoon update to coincide with the last hour of trading on Wall Street.
