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. Mixed markets: Stocks were higher on Tuesday in what has been a volatile session for the S&P 500. The market initially welcomed softer wholesale inflation data and reports of a potentially more measured rate hike by President-elect Donald Trump. However, there was some second-guessing as the day progressed. While fresher-than-expected producer price index news was encouraging, the data was not considered significant enough to call off bonds. The release of the consumer price index report on Wednesday will carry much more weight. As of around 2pm ET, the yield on the 10-year Treasury note was essentially unchanged on the day at roughly 4.797%. Tariffs continue to create concerns. Early on, stocks got a boost from a Bloomberg News report that said members of Trump’s economic team are considering a slow rate hike, preferring a month-to-month basis. The idea is that a gradual approach will be better for trade negotiations. Councilors also do not want to risk a rise in inflation. We know Trump is a firm believer in tariffs as a tool, but there is still some debate about their ultimate size and scope. But after Trump posted on social media platform Truth Social about creating a “Foreign Revenue Service” to collect taxes, duties and income from foreign sources starting Jan. 20, the stock market once again realized that the president the next has serious ambitions for tariffs. Powers of AI Power Generation: If there’s one theme that keeps running, it’s power generation and AI. The group may come together after President Joe Biden issued an executive order to spur the building of AI infrastructure. While it’s always possible that the new administration will undo most of Biden’s last-minute orders, that may be more likely to stand given the consensus view of how important AI leadership is. But we will see. Stocks like GE Vernova, Vistra, Constellation Energy and Vertiv outperformed the broader market. The Eaton club name is also higher. Perhaps Nextracker – which we originally bought on the premise that more US solar is needed to support the power needs of AI factories – is making a case for inclusion in this group. Its shares were higher on Tuesday after retreating in recent days. But we’re still not sure about solar stocks confidence, which explains why we took advantage of Nextracker’s strength last week to lighten the position. Cutbacks at Meta: Instagram’s parent Meta platforms’ “year of efficiency” may have begun in 2023, but all signs point to a continued focus on managing corporate spend. The company plans to cut 5% of its workforce with a focus on its lowest-performing employees, CNBC confirmed. Over the past few years, Meta has embraced a flatter organizational structure by removing several layers of management. The company’s embrace of AI in the workplace has also helped boost efficiency. Usually, the market likes when Meta announces anything that suggests it’s ending spending, but the stock has been under pressure over the past couple of days. The decline comes despite the uncertain fate of TikTok, one of Meta’s biggest rivals for content, user engagement and ad dollars. Next: No big earnings after the closing bell on Tuesday. We’ll keep our eyes peeled for a slew of updates from the JPMorgan Healthcare Conference, including a post-closing presentation from Eli Lilly CEO David Ricks. Jim Cramer called Tuesday’s drop in Lilly stock a buying opportunity. Additionally, Jim also has the namesake of the club, Abbott Laboratories CEO Robert Ford on Mad Money. The unofficial start to fourth-quarter earnings season kicks off on Wednesday, with several big banks kicking things off. Wells Fargo, BlackRock, Goldman Sachs, JPMorgan Chase, Citigroup and Bank of NY Mellon are scheduled to report. On the economic data side, we will see the consumer price index report in December. As mentioned, because it measures the prices paid by the consumer, the CPI report carries more weight than the PPI. (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.
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.
