Leaders, laggards after Powell’s speech — plus, key Starbucks, Honeywell updates
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. Market moves : Stocks were headed for a positive week, thanks to a big rally on Friday in reaction to Federal Reserve Chairman Jerome Powell ‘s speech at the annual Jackson Hole economic symposium. Heading into the address, the market was unsure if Powell was going to hint at a possible interest rate cut at next month’s central bank policymaking meeting. So, the market jumped upon hearing Powell talk about growing downside risks in the labor market and how the “shifting balance of risks may warrant adjusting our policy stance.” Powell’s remarks lifted stocks and pushed bond yields lower as traders increased their bets around multiple rate cuts before year-end. The market’s surge Friday is playing out like we discussed late Thursday, with the more dovish Fed unleashing rallies in cyclical, more economically sensitive stocks that stand to benefit the most from lower rates. Some of the biggest gainers in the portfolio Friday were Capital One , DuPont , and Home Depot . The laggards were defensive groups like consumer staples, utilities, and health care. Within the portfolio, Bristol Myers Squibb , Costco , and TJX Companies trailed the broader market. Bids coming : Starbucks expects to receive non-binding offers for a stake in its China business within the next two weeks, according to Reuters. Private equity firms Carlyle, EQT, Hillhouse Investment, and Primavera Capital were named in the story as interested partners. Bain Capital and Chinese tech giant Tencent were mentioned, too. It’s another sign of progress in Starbucks CEO Brian Niccol’s turnaround. Quantum note : We mentioned in Wednesday’s Homestretch the reports around Honeywell and other investors seeking a funding round for the quantum unit Quantinuum at a $10 billion valuation. Analysts at Bank of America commented on the report Friday, saying they believe the quantum unit’s valuation “suggests upside potential to undervalued Honeywell SOTP.” SOTP is an abbreviation for sum-of-the-parts and is a way to value a company undergoing a breakup, like Honeywell. Next week: The stragglers of Big Tech report earnings, including quarterly results from Nvidia , CrowdStrike , Dell Technologies, Marvell Technology, and Snowflake. Retail earnings will continue with Best Buy, Gap, Dick’s Sporting Goods, Five Below, and many others. On the economic data side, the key report for the week will be the July personal consumption expenditures (PCE) price index on Friday morning. (Jim Cramer’s Charitable Trust is long COF, DD, HD, BMY, COST, TJX, HON, NVDA, CRWD. 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.
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