Every weekday, the CNBC Investing Club with Jim Cramer provides an afternoon update known as the Homestretch, designed to inform investors just ahead of the final trading hour on Wall Street.
On Thursday, the S&P 500 appeared to be recovering after facing four consecutive days of declines. Technology stocks experienced a notable rebound, primarily fueled by Micron Technology’s announcement that demand for its AI memory chips remains robust. This news propelled Micron’s shares to surge by more than 12%. However, the broader market rally was not solely reliant on technology; consumer discretionary stocks played a significant role in the day’s positive momentum. Companies like Amazon and Tesla, categorized under consumer discretionary, saw substantial stock increases. Additionally, a variety of stocks within the restaurant, retail, travel, and leisure sectors demonstrated large gains, reflecting growing investor optimism as inflationary pressures seemed to be easing, a sentiment supported by a much cooler-than-expected consumer price index reading.
One of the standout performers was Texas Roadhouse, which marked its second consecutive day of significant gains and benefitted from recent purchases at more favorable price levels earlier in the week.
In the financial sector, the performance of various bank stocks has been notably strong this month, leading the club to adjust its price targets upward. The price target for Goldman Sachs has been raised to $925 from $850, while Wells Fargo’s target increased to $96 from $90. Additionally, the target for Capital One has been adjusted upward to $270 from $250, although its rating has been downgraded to a 2. A position trim is planned for Capital One as soon as the club is unrestricted, which could happen as early as Friday. This marks the first instance of a sale since the position was initiated in early March. Capital One has had an impressive year, particularly following statements from New York Fed President John Williams about the possibility of an interest rate cut, which was realized last week. The stock has enjoyed a strong performance, rallying around 20% since Williams’ comments and outperforming the S&P 500’s approximate 4% return.
Looking ahead, earnings reports from Nike, FedEx, and KB Home are expected following Thursday’s market close. On Friday morning, earnings are also anticipated from Conagra, Lamb Weston, Paychex, and Carnival Corp. Additionally, the University of Michigan’s consumer sentiment index and one-year inflation expectations are scheduled for release.
Subscribers to the CNBC Investing Club are notified of trade alerts before any transactions are made, allowing for a structured approach to trading. Jim Cramer ensures a waiting period of 45 minutes after sending a trade alert before executing any trades in his charitable trust’s portfolio. If a stock has been discussed on CNBC TV, a 72-hour waiting period is observed post-trade alert before execution.
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