Every weekday, CNBC’s Investing Club with Jim Cramer releases the Homestretch Report — a hands-on afternoon update, just in time for the final hour of trading on Wall Street. Market action: The S&P 500 was on track for a small gain after a strong rally last Friday. There’s still some market rotation happening, but this time it’s the opposite of the tech-fueled flight that has dominated the past few weeks. The so-called Super Seven stocks — six of which we own: Apple, Alphabet, Amazon, Meta Platforms, Microsoft and Nvidia — performed better on Monday. Small-cap companies, as measured by the Russell 2000, lagged. So far this month, the Russell is up about 9%, the Dow is up 3.5%, the S&P 500 is essentially flat and the Nasdaq is down about 2%. Trial Verdict: We’re encouraged that Abbott Laboratories shares are moving well off their morning lows despite being ordered to pay $495 million in a premature ruling over its infant formula. The slight decline could be a sign that the bad news has already been priced in given the tens of billions in market value lost since March. Or it could be a sign that Wall Street is realizing that this verdict was a joke. Abbott CEO Robert Ford believes that recalling these products would cause a public health crisis. What other option does Abbott have to mitigate the risk of litigation? If the stock drops just 1% on this bad news, we can’t help but wonder what the upside might be if it starts winning cases or if a settlement is reached. Abbott is still a long way from either, but this kind of exercise helps frame the risks and rewards ahead. IPO Talk: Late Friday, Honeywell Club shares rose a few percent after a Bloomberg report said the company was considering an initial public offering of its quantum computing business Quantinuum as soon as next year. The valuation was around $10 billion. We see a move like this as a slight, potentially positive acknowledgement that Honeywell plans to monetize the business at a higher valuation. But we weren’t surprised to see the stock quickly regain those gains. “Honeywell doesn’t get any credit for Quantinuum because the company didn’t make profits last week. The market won’t give them a pass,” Jim Cramer said Monday afternoon. Honeywell reported strong revenue and adjusted earnings per share that beat the second quarter but disappointingly trimmed its full-year adjusted earnings per share forecast due to slower growth in its short-cycle businesses and acquisition costs. Coming up: Tuesday marks the start of Club’s second-quarter earnings season. Before the opening bell, we’ll get numbers from Procter & Gamble and Stanley Black & Decker. We made two small sales in Stanley Black & Decker on gains we didn’t want to give back. There were a dozen other club names that came out of the green during the week, including Advanced Micro Devices, Microsoft and Starbucks after Tuesday’s close. We bought more Starbucks shares on Monday — not as a pre-quarter statement but to fulfill our signal a week ago when we upgraded the stock to a 1-equivalent buy rating after learning that activist firm Elliott Management had acquired a stake in the coffee giant. (See here for a full list of stocks in Jim Cramer’s Charitable Trust.) As a subscriber to 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 talks about a stock on CNBC, he waits 72 hours after sending a trade alert 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 is, or is created, by your receipt of any information provided in connection with the Investment Club. No specific result or profit is guaranteed.
Every weekday, CNBC's Investing Club with Jim Cramer releases a detailed update – an actionable afternoon update that comes just in time for the final hour of trading on Wall Street.
