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. Markets: Wall Street rose on Wednesday thanks to the second encouraging inflation report this week and a set of strong bank earnings. The consumer price index, excluding food and energy, came in slightly below expectations ahead of the opening bell on Wednesday, a day after a measure of wholesale inflation did the same. The odds that the Federal Reserve will cut interest rates twice this year increased after Wednesday’s CPI print, according to the CME FedWatch tool. The tepid December jobs report released on Friday had investors rethinking the path of rate cuts ahead. Financials were one of four sectors in the S&P 500, out of 11, that rose more than 2% on Wednesday. Communication services, consumer discretion and technology are the others. Earnings reports fueled the move in finance. The BlackRock club name appeared approximately 5% after its results showed that the last sellers left the train very quickly. Wall Street wisely focused on the big picture with other Wells Fargo portfolio stocks, sending its stake up 7%. Meanwhile, Goldman Sachs confirmed our latest departure from Morgan Stanley as executives sounded optimistic about deal activity in 2025. Bristol Vision: The biggest market for Bristol Myers Squibb’s new schizophrenia treatment may, in fact, be patients with Alzheimer’s disease. That’s according to company executives who spoke with our CNBC colleague Annika Kim Constantino at the JPMorgan Healthcare Conference in San Francisco. Here is an excerpt from her story. In an interview, company executives said each of the treatment uses they are studying for Cobenfy has multibillion-dollar potential, including Alzheimer’s disease psychosis, Alzheimer’s agitation and Alzheimer’s cognition, bipolar disease and autism. But Alzheimer’s is “the really big market here,” Bristol Myers Squibb CFO David Elkins told CNBC. There are about 6 million patients in the US with Alzheimer’s, and about half of them have psychosis, or symptoms such as hallucinations and delusions, Elkins said. Cobenfy could be the first drug approved specifically for Alzheimer’s-related psychosis, said chief commercialization officer Adam Lenkowsky. Cobenfy’s long-term potential is at the heart of our investment thesis at Bristol Myers, and its opportunity in areas beyond schizophrenia figures in our optimism. Jim Cramer has said that Cobenfy’s annual sales could one day reach $10 billion, when all possible uses are considered. We’ll keep our eye on the results of Bristol Myers’ late-stage trial for psychosis associated with Alzheimer’s disease, which are now expected to be released later this year. Shares of Bristol Myers were modestly higher on Wednesday. Portfolio partner name Eli Lilly also has exposure to the Alzheimer’s treatment market, but in a different way. Lilly’s Kisunla, approved by US regulators last year, seeks to slow the current progression of the memory-robbing disease by removing abnormal protein clumps in the brains of Alzheimer’s patients. The drug has a slow start on the market. Biotech exports: Club names GE Healthcare and Danaher gave early gains Wednesday on news of new Commerce Department controls on exports of biotech equipment to China. The agency cited national security concerns, saying the biotech tools could be used for “enhanced human performance, brain-machine interfaces, biologically inspired synthetic materials and possibly biological weapons.” Research analysts at Leerink said Wednesday that the rule “looks narrow.” This may limit the impact on Danaher. Plus, Danaher can secure almost its entire portfolio locally in China, which should help the company navigate the controls. We don’t believe GE Healthcare is selling any products related to this decision, but the stock still fell in sympathy. It also has a strong manufacturing presence in China. The new biotech export rules are part of the Biden administration’s broader strategy to limit the flow of cutting-edge American technology to China. The White House fears that access to such technology could be used by the Chinese government to bolster its military capabilities. On Monday, the Commerce Department also proposed new restrictions on AI chip exports, hitting the stock of Nvidia portfolio in back-to-back sessions. However, Nvidia shares jumped 3% on Wednesday, snapping a five-session losing streak. China Update: Ahead of the export decision, GEHC shares opened higher on Wednesday, the morning after what we would describe as a sigh of relief from management in its presentation at the JPMorgan Healthcare Conference. Key takeaway: China is coming in slightly better than expected with signs of increased activity. While there may be signs of green shoots, visibility remains low and management was careful to keep expectations low by repeating caution. Jeff Marks, director of portfolio analysis for Investment Club, said on Wednesday he was pleased that business in the world’s second-largest economy is not deteriorating as the company waits for promised economic stimulus from the Chinese government to kick in. After strong quarterly results from our three financial portfolio firms, banking earnings continue Thursday morning with Bank of America and Morgan Stanley. We’ll look for Nvidia and Broadcom readings on Taiwan Semiconductor Manufacturing Company’s first earnings. In addition to earnings, the government’s December retail sales reading comes out at 8:30 a.m. ET. While not adjusted for inflation, we’ll see how shoppers fared during the final month of the holiday shopping season against the backdrop of cooler consumer inflation trends detailed Wednesday morning. (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.
