Every weekday, the CNBC Investing Club with Jim Cramer releases Homestretch — an actionable afternoon update, just in time for the final hour of trading on Wall Street. (We are no longer recording audio, so we can get this new written feature out to members as quickly as possible.) Market Talk: The S&P 500 and Nasdaq jumped to intraday highs on Wednesday, extending gains from the previous session. Marching late in the day. In fact, the S&P 500 surpassed 5,300 for the first time ever. Meanwhile, the Dow Jones was about half a percentage point away from its all-time high. The catalyst for Wednesday's session was a colder-than-expected April CPI, causing Treasury prices to rise and yields to fall (inversely). As a result, the odds that the Fed will cut interest rates several times this year have increased. The weak April retail sales report, also released on Wednesday, was seen as a “bad news is good news situation” as slowing demand for goods could help ease inflation. The only thing we should be careful about in this rally is how overbought the stock market has become. You have to go back to last December to find a time when the short-term S&P 500 was overbought. To be fair, it only took a slight decline in that time to break out of overbought conditions – the S&P 500 was down about 2% from December 28, 2023, to January 4. However, the market needed a few weeks to absorb the rise. Operational at the end of 2023 before rising again. New High: We got a chance to follow Danaher's bullish pitch at the Bank of America Healthcare Conference on Tuesday. We thought management's conversation was consistent with what we heard last month when the life sciences and medical diagnostics company provided pulses across its three core businesses. We took it as a sign that the long-awaited transformation in the biotech industry had finally arrived. At the conference, Danaher continued to note that bioprocessing inventory will be behind it by the second quarter, driven by a normalization of inventory levels and demand patterns from large customers. The company wisely continued to forecast low activity in China. And there's one point from the conference that we found particularly interesting: If drug prices decline as a result of the inflation cap, Danaher could see a tailwind assuming patient volumes and uptake of these drugs increase. Danaher's business is mainly consumables-based, which means it is volume-driven. Danaher shares rose more than 1% on Wednesday, adding to the previous day's 3% gain. The move puts the stock at a new 52-week high, though it's still about $30 per share short of the Covid pandemic record. The stock's strong performance over the past year is a good example of how it has paid off a commitment to investing in a high-quality company as it works through temporary inventory challenges. The stock price in these cases is likely to bottom out long before the end of its business cycle. “It could be huge for unemployment claims for Red Lobster to suddenly close about 50 restaurants. That's a lot of employees,” Jim Cramer said. “Disney doesn't deserve this drop because it's become a very cheap stock, but people don't think Disney is serious about spinoffs now. No Peltz.” “Data centers depend on natural gas. I think there will be a lot of natural gas plants that will be built to meet the energy demand.” NEXT: Cisco Systems reports after the closing bell on Wednesday, and we're interested to hear what the networking equipment company has to say about its acquisition of Splunk. Thursday morning, we'll hear from Walmart, Deere, and a couple of Chinese companies in Baidu and JD.com. (See here for a complete list of stocks in Jim Cramer's Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you'll receive a trade alert before Jim takes a trade. Jim waits 45 minutes after a trade alert is sent before buying or selling a stock in his charitable fund's portfolio. If Jim talks 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, as well as our Disclaimer. No obligation or fiduciary duty exists or is created by your receipt of any information provided in connection with the Investment Club. No specific results or profits are guaranteed.
Every weekday, the CNBC Investing Club with Jim Cramer releases Homestretch — an actionable afternoon update, just in time for the final hour of trading on Wall Street. (We are no longer recording audio, so we can get this new written feature to members as quickly as possible.)
