Jim Cramer says the stock market rally has stalled because of two important reasons
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. We’re no longer recording the audio, so we can get this new written feature to members as quickly as possible. Here’s Tuesday’s edition. Market moves : At the index level, you wouldn’t think much was happening Tuesday, with the S & P 500 little changed. But if you dig deeper below the surface, the day has been more of a countertrend situation, with tech and many other of the red hots finally taking a breather. Some may call this a broadening out like the last two months of 2023. But Jim Cramer said, “It is not a broadening rally. It’s a market that is in retreat because it overheated. We can’t keep taking Eli Lilly and Broadcom and Nvidia and Super Micro Computer up on the same news over and over.” To his point, all four of those stocks are off to strong starts to the new year after significantly outperforming in 2023. The charts have gone parabolic, which we interpret as a sign to keep your guard up. “Lilly and Nvidia have to shake off those who bought them on the parabola,” Jim said. Not systemic : It’s hard to ignore the declines in New York Community Bancorp — down another 16.5% on Tuesday and a whopping 56% year to date. Memories of last year’s regional banking crisis are still fresh in our minds. However, this may just be a case where one bank simply bit off more than it can chew rather than an indictment of the entire regional banking sector. “NY Community is not a canary in a coal mine,” Jim said. “It is a reason to be ready to buy the cyclicals if it fails. It should never have been allowed to buy the hobbled Signature Bank,” which needed rescuing in the fallout from the March 2023 collapse of Silicon Valley Bank. Sectors Leading: Materials were rebounding from Monday’s decline thanks to strong earnings from Linde and a pop in fellow Club name DuPont after it announced a new share buyback program. This time on Monday, there were fears about the industrial gas group after Air Products and Chemicals cut its full year outlook. But Linde’s results Tuesday morning once gain prove it’s the better operator. Real Estate was also having a good day thanks to Simon Property Group topping expectations. (CEO David Simon on “Mad Money” with Jim later.) Health care continues to be strong, with Club name GE Healthcare the latest name to pop on earnings —up more than 12% in Tuesday trading. Sectors Lagging: Information Technology was the notable decliner Tuesday as profit-taking hits AI-driven stocks. One tech name solidly in the green, however, was Apple . Shares of the tech giant were trading a full 1% higher than where they were before last Thursday’s so-called bad quarter. Thanks to the Vision Pro launch last Friday, we think the market has quickly forgotten about problems in China and remembered how innovative the Apple truly is. Jim has been bullish on the Vision Pr o and CEO Tim Cook’s leadership. “Apple Vision Pro, boutique or not boutique? We don’t know yet, but I think it isn’t niche. It will be mass,” he added. Earnings: After the bell Tuesday, we get financials from Club name Ford . We’re expecting the quarter and guide to be more positive like General Motors than Tesla . Some other earnings of interest late Tuesday are Chipotle , Fortinet , Amgen , Edwards Lifesciences , and Enphase Energy . A few of the bigger earnings reports Wednesday morning include Uber , CVS Health , and Yum Brands . Don’t forget, Club names Disney and Wynn Resorts report after the bell Wednesday. (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. We’re no longer recording the audio, so we can get this new written feature to members as quickly as possible. Here’s Tuesday’s edition.
