Stanley Black & Decker’s turnaround looks increasingly less promising as the bond market revolts against the Federal Reserve’s interest rate cuts. We are at a crossroads with the stock. Shares of Stanley Black & Decker continue to underperform despite the Investment Club’s long-standing belief that a rebound in the housing market would follow the Fed’s easing of monetary policy. In fact, Stanley Black & Decker has fallen more than 21% since the central bank delivered its first rate cut of the cycle on September 18. The Fed’s two other rate cuts — in November and December — haven’t helped either. “I would have liked to sell a lot more Stanley Black & Decker, but I became fascinated with the idea that as we lower the rates we will start to have some kind of shelter. [turnaround]” Jim Cramer said Wednesday, adding that more housing would increase demand for the Stanley tools and equipment needed to build new homes and renovate existing ones. “But it hasn’t worked.” That’s because the Fed’s moves can affect mortgage rates, but instead, home loan rates are more closely related to the 10-year Treasury yield, which continues to rise despite the Fed’s three rate cuts in 2024 and its forecast of two more in 2025. So while the 10-year yield has risen — hovering near eight-month highs on Wednesday — so has so are mortgage rates, which are currently just under 7% for a 30-year fixed loan and hovering around their highest levels since July demand for home loans last week.The higher move in bond yields was likely driven by traders’ expectations that the Fed should be more cautious in lowering borrowing costs going forward after an aggressive start. of its relief campaign. whether [yields] charge up to 5% on the 10-year; could be a headwind,” said Jeff Marks, CNBC Investing Club’s director of portfolio analysis. Marks has noted in the past that mortgage rates around 5% to 6.5% tend to spur housing activity. Mortgages fell to steady from multi-year highs above 7.% in June to the Fed’s September rate cut, however, after the cut, they almost immediately started to rise along with bonds SWK YTD yields mountain Stanley Black & Decker (SWK) year-to-date Stanley Black & Decker shares have gained about 1% in 2025, roughly matching the performance of the S&P 500 last year vs. growth of 23% of the broader market index.Going forward, the Club previously said it would sell Stanley Black & Decker shares have been stronger in July over $90 per share. We telegraphed this stance in December, when we downgraded Stanley Black & Decker’s rating to 3, after management shared more about the negative impact it could have. there are tariff increases proposed by President-elect Donald Trump in the company’s Chinese market. Tariff risk and stagnant housing are a bridge too far. We plan to use those future sales proceeds from Stanley to add to our position in Home Depot. There is less tariff exposure for the home improvement retailer. In our downgrade of Stanley Black & Decker, we wrote, “We want to have less rate risk ahead of Inauguration Day…However, we do not want to lose exposure to [the] Home improvement theme because housing turnover is at a 30-year low and pent-up demand will be released when mortgage rates [eventually] fall.” (Jim Cramer’s charity is long SWK, HD. See here for a complete list of stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you’ll 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 portfolio, if Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing a trade alert before executing the trade HAS BEEN CREATED, FOR YOUR RECEIVING ANY INFORMATION DIRECTED IN CONNECTION WITH THE INVESTMENT CLUB NO SPECIFIC RESULTS OR PROFIT IS GUARANTEED.
Based in New Britain, Conn., Stanley Black & Decker is the largest manufacturer of hand tools, power tools and related accessories in the US. The company enjoys a 40 percent market share in tools, making it the “undisputed market king.” While Stanley Black & Decker is benefiting from increased spending at home improvement retailers Lowe’s and Home Depot, which each account for more than 10 percent of Stanley’s sales, the company’s stock is actually down 1 percent in the last
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Stanley Black & Decker’s The turnaround looks increasingly less promising as the bond market revolts against the Federal Reserve’s interest rate cuts. We are at a crossroads with the stock.
