Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch, offering an actionable afternoon update just before the final hour of trading on Wall Street. Today, market trends indicate that the S & P 500 is poised to close this week higher, primarily bolstered by gains in megacap tech stocks. However, the average stock has not performed as well, as evidenced by a decline in the Invesco S & P 500 Equal Weight exchange-traded fund. Discussions have pointed out that lower interest rates, anticipated to benefit the broader stock market, are expected to help sectors like housing. Nonetheless, the 10-year Treasury yield has been gradually increasing since the Federal Reserve’s recent decision to lower rates by 25 basis points on Wednesday. As a result, investors seem to be gravitating back towards large-cap, secular growth technology stocks.
In trade developments, President Donald Trump held a highly anticipated call with Chinese President Xi Jinping on Friday. Trump announced the conclusion of the call on Truth Social, revealing that it resulted in an agreement for a group of investors to take control of TikTok’s U.S. operations. “I just completed a very productive call with President Xi of China. We made progress on many very important issues, including Trade, Fentanyl, the need to bring the War between Russia and Ukraine to an end, and the approval of the TikTok Deal,” he stated. Although there was hope for updates on a Boeing order, no new breakthroughs were reported. Conversely, Trump’s announcement suggests that trade discussions are maintaining a positive trajectory. Additionally, he mentioned that the president of Turkey is scheduled to visit the White House on September 25 to negotiate a trade deal involving Boeing planes and other defense equipment.
On the energy front, power-related stocks are continuing to see gains. This segment includes companies such as gas turbine manufacturer GE Vernova and electrical equipment provider Eaton, both of which are holdings in the CNBC Investing Club’s portfolio. The surge in these stocks follows an announcement from the Energy Department regarding the “Speed to Power” initiative. This program aims to expedite the development of large-scale grid infrastructure projects for both transmission and generation. Launched by the Trump administration, this initiative seeks to address the lagging pace of project development amid increasing electricity demands, particularly to support artificial intelligence data centers and the manufacturing sector’s reintegration into the U.S. market. Further details regarding this program are anticipated, and it is expected to provide a tailwind for spending on products from GE Vernova and Eaton.
Looking ahead to next week, the earnings calendar includes a report from portfolio member Costco following Thursday’s closing bell. Other companies slated to report their earnings include Micron, Cintas, KB Home, and Jabil. On the data front, key metrics such as S & P Global PMIs, weekly mortgage applications, and jobless claims will be released, providing insights into labor market health. Notably, on Friday, the August personal consumption expenditures (PCE) price index will be published, representing the Federal Reserve’s favored inflation measure. Additionally, various Fed officials are scheduled to speak throughout the week, offering potential insights into the Fed’s summer economic projections.
Subscribers to the CNBC Investing Club with Jim Cramer are informed about trade alerts before any transactions are executed. Jim typically waits 45 minutes after sending a trade alert before making a buy or sell decision in his charitable trust’s portfolio. If a stock has been discussed on CNBC TV, he delays execution for 72 hours following the trade alert.
