Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch — an actionable afternoon update, just in time for the last hour of trading on Wall Street. Markets sink: Stocks are taking it on the chin Friday, capping off a week in which the S & P 500 fell about 2%. Some of the selling this week was tied to profit-taking after the enthusiasm of last week’s postelection rally. There’s always an argument to be made that when you get a pop like last Wednesday — when the S & P 500 soared more than 2.5% on Donald Trump’s election win — you’re borrowing some gains from the future. But higher interest rates also played a role this week. The yield on the benchmark 10-year Treasury note jumped this week to around 4.41%, as of Friday afternoon, but at times was even higher than that. It ended last week around 4.31%. On Thursday, Federal Reserve Chair Jerome Powell reiterated that the central bank was not “in a hurry” to keep cutting rates , causing the market to become more split about what the Fed will do at its December meeting. Traders currently put the odds of a quarter-point cut at just below 62%, versus 38% for a pause, according to the CME FedWatch tool . As this volatility struck over the past few days, our recently built up cash position shielded us from heavier losses. If the selling pressure spills into next week, expect us to take advantage of these pullbacks, especially in stocks we’ve been wanting to buy more of on weakness. CrowdStrike fits that bill. Bright spots : The two best-performing S & P 500 sectors this week are financials and energy. In fact, they’re the only two in the green. Both built on last week’s postelection gains. The banks have been rallying in anticipation of a deregulatory environment, the possibility of less-strict capital requirements, and an M & A wave under the upcoming Trump administration. Our three financials – BlackRock, Morgan Stanley, and Wells Fargo – are up this week despite the market pressure. Morgan Stanley, in particular, got some help from an upgrade to hold-equivalent from underweight by analysts at Wells Fargo. Energy also has done well in anticipation of fewer regulations. However, there is a counter-argument that increased drilling activity in the future could hurt oil prices by creating more supply. In an uncertain climate, we like companies that take destiny into their own hands and are always looking to improve. That’s why Club name Coterra Energy rallied for other reasons. The oil-and-gas producer made two smart acquisitions in the Permian Basin to get more oil exposure. A winner in the portfolio outside financials and energy this week is Disney . The media-and-entertainment stock has rallied about 10% over the past two days in reaction to a good quarter and even better multiyear outlook. Disney shares have been on a tear even before earnings. The stock is working on a nine-session win streak that has seen the stock go from $95 to $113, capping off its best week since May 2009. For investors looking to get in, why not wait until a down day? Our discipline is to never chase parabolic moves. Weak spots: A lot of stocks struggled this week. Health care was far and away the worst-performing group in the S & P 500. The nomination of Robert F. Kennedy Jr. to lead the Department of Health and Human Services on Thursday night injected regulatory uncertainty into the pharma and biotech groups, and the declines spread to the suppliers in the life sciences and bioprocessing industries. Stocks hate uncertainty, and that’s why some of these sell-offs are so big. In a piece earlier in the afternoon , we explained why we held off on making any moves Friday in Eli Lilly despite its more-than-4% drop. It’s also important to remember uncertainty can create opportunity, and we’re taking a harder look at the group because some of these declines are starting to look attractive. Megacap tech stocks also were hit hard the past couple of days, and semiconductors lagged. A good quarter from leading AI chipmaker Nvidia next week is needed to improve sentiment. Next week: There’s 11 companies in the S & P 500 reporting next week. On Tuesday, we’ll hear from Walmart , Lowe’s , Medtronic and Viking Holdings . The big day is Wednesday, headlined by Nvidia after the closing bell. TJX Companies , Palo Alto Networks , Target , Williams-Sonoma , and Snowflake are also scheduled to report Wednesday. We own TJX and Palo Alto for the Club. Then Thursday there is Deere , BJ’s Wholesale , Ross Stores , and Gap . A couple Chinese companies in Baidu and Pinduodo’s parent firm PDD Holdings also are on the docket. Outside of earnings, Club name Stanley Black & Decker has a capital markets day Wednesday and GE Healthcare has an investor day on Thursday. (See here for a full list of the stocks in Jim Cramer’s Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will 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’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch — an actionable afternoon update, just in time for the last hour of trading on Wall Street.
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