These 4 stocks could be major winners from falling oil prices
Every weekday, the CNBC Investing Club with Jim Cramer holds a “Morning Meeting” livestream at 10:20 a.m. ET. Here’s a recap of Monday’s key moments. 1. Stocks surged Monday after President Donald Trump announced that the U.S. and Iran had reached an agreement to end the nearly four-month conflict. The Dow gained 1.3% to reach an all-time intraday high. The S & P 500 advanced 1.7%, and the Nasdaq jumped 2.6%. Both were still a bit shy of their records. The agreement is expected to reopen the Strait of Hormuz, a critical global shipping route for oil and gas, helping drive West Texas Intermediate crude down about 5% to roughly $80 per barrel — its lowest level since March. Jeff Marks, director of portfolio analysis for the Club, said lower energy prices could help cool inflation and reduce concerns about additional Federal Reserve tightening ahead of Kevin Warsh’s first meeting as chairman this week. “You need oil down to take the potential of rate hikes off the table for later this year,” Jeff said. Reflecting that view, we added to our Capital One position on Monday, betting that lower oil prices and easing inflation pressures could help support consumer spending and credit trends. 2. Honeywell climbed 4% as easing tensions in the Middle East boosted the outlook for the company’s aerospace and automotive businesses. (It’s one of the best-performing Dow stocks, along with fellow Club name Boeing .) Jeff said Honeywell’s aerospace unit could benefit from lower fuel costs and reduced concerns about flight disruptions, which would support airline activity and demand for Honeywell’s high-margin aftermarket services. At the same time, he said, the automation segment could see increased demand as energy producers in the region resume delayed projects and invest in repairing and upgrading infrastructure. With Honeywell set to separate its aerospace and automation businesses on June 29, Jeff remains bullish on the stock. We recently upgraded Honeywell back to a 1 rating following its automation Investor Day, and continue to see upside as investors gain a clearer view of the value of the standalone companies. 3. Amazon gained more than 3% as investors rotated back into growth stocks amid falling oil prices. Jeff said Amazon is particularly well-positioned to benefit from lower energy costs. Cheaper gasoline should leave consumers with more disposable income to spend online, he said, adding that lower fuel and transportation expenses could also help improve margins across Amazon’s vast fulfillment and delivery network. Together, Jeff said those dynamics create a favorable backdrop for both the company’s retail business and overall profitability. (Jim Cramer’s Charitable Trust is long AMZN, COF, HON, BA. See here for a full list of the stocks.) 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.
<
