Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch – an actionable afternoon update, just in time for the final hour of Wall Street trading. Slow start: The S&P 500 is lower to start the new week, but at worst levels of the session. The decline follows the S&P 500’s 1.5% retreat last Friday in response to a stronger-than-expected jobs report in December. The 10-year Treasury yield is relatively unchanged after last Friday’s rise and briefly touched 4.8% on Monday. Tech stocks felt most of the pain due to higher interest rates and continued earnings taking after a strong 2024. Lilly lands a deal and talks about its pill: There’s always a flurry of M&A activity around JPMorgan Healthcare Conference. Monday’s headliner is Johnson & Johnson’s $14.6 billion deal to buy Intra-Cellular. This acquisition increases J&J’s presence in the neuroscience market. In smaller M&A news, Eli Lilly said it plans to buy experimental cancer treatment Scorpion Therapeutics in a deal that could fetch up to $2.5 billion in cash if certain regulatory and sales milestones are met. Scorpion Therapeutics is a privately held biotech. Eli Lilly is growing its oncology pipeline with a once-daily oral PI3Kα mutant-selective inhibitor currently being evaluated in a Phase 1/2 clinical trial for breast cancer and other advanced solid tumors. In other news, Eli Lilly CEO Dave Ricks told Bloomberg TV on Monday that he expects the company’s oral weight loss pill, called orfoglipron, to be approved in early 2026. Ricks plans to release Phase 1 data 3 until the middle of this year. Weight loss pills have a lot of potential in the obesity market for two reasons: convenience (it’s much easier for the patient to take a pill than to inject themselves with drugs); and the relative ease of manufacturing and scaling up the drug. The main obstacle in the obesity supply chain is those auto-injector pens. An oral GLP-1 drug with similar efficacy and safety to Mounjaro/Zepbound and Novo Nordisk’s drugs should be very profitable for Eli Lilly. Is the Honeywell split coming? It looks like a breakup is on the way. Shares of the industrial conglomerate rose in midday trading after Bloomberg reported that the company plans to go ahead with activist Elliot Management’s plan to separate its aerospace business from its automation business. The report says the company is expected to announce the split with its fourth-quarter results on Thursday, February 6. We have supported Elliott’s push and agreed that Honeywell be spun off because of the shareholder value that has been created by other aerospace-related divestitures at GE and the legacy United Technologies (now known as RTX Corporation). The most focused entities are those needed to get the company’s inconsistent business fundamentals back on track. Next: After the closing bell on Monday, we’ll look at earnings from homebuilder KB Home. Also check out Cramer’s “Mad Money” interview with Bristol-Myers CEO Chris Boerner from JPMorgan’s health conference. There are no major earnings reports ahead of the opening bell on Tuesday. On the data side, the key report is the producer price index (PPI), which measures inflation from a seller’s perspective. The Consumer Inflation (CPI) report will be released on Wednesday. (See here for a complete list of holdings in Jim Cramer’s Charitable Foundation.) 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 share in his charitable trust portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after the trade alert is issued before executing the trade. THE ABOVE INVESTMENT CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY ALONG WITH OUR STATEMENT. NO OBLIGATION OR FIDUCIARY DUTIES EXIST, OR ARE CREATED BY VIRTUE OF YOUR RECEIVING ANY INFORMATION DIRECTED IN CONNECTION WITH THE INVESTOR CLUB. NO SPECIFIC RESULTS OR PROFITS ARE GUARANTEED.
Dave Ricks, chairman and chief executive officer of Eli Lilly and Company speaks to the Economic Club of New York in New York City, USA, March 12, 2024.Â
Mike Segar | Reuters
Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch – an actionable afternoon update, just in time for the final hour of Wall Street trading.
