Stocks keep the rally going and oil tumbles. Here’s why we have some trepidation
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 are powering higher for the second session in a row. The S & P 500 is extending this week’s gains to more than 2%. The tech-heavy Nasdaq 100 is on an even better run. The index — home to the largest 100 non-financial companies on the Nasdaq exchange — is riding a 10-session winning streak that has lifted it roughly 12%. The Nasdaq 100 hasn’t posted this many consecutive gains since 2021, which gives us some pause that a short-term pullback may be due. When we factor in the magnitude of the move, the length of the win streak and the S & P Oscillator’s plus 7% overbought reading, we’re looking for areas to trim at rather than put new money into work. That’s why we made a small Boeing sale this afternoon. U.S. oil prices fell about 7% during the session, as media outlets including CNBC reported that Washington and Tehran are in discussions on a second round of peace talks. WTI crude is now trading just below $92 per barrel, marking its lowest level since the two sides agreed to a two-week ceasefire on April 7 . Unsurprisingly, the energy sector was the worst performing sector in the day, and the State Street Energy Select ETF (XLE) has now erased all its Iran war gains. The decline in oil coincides with a slide in interest rates. The yield on the benchmark 10-year Treasury note has retreated to 4.26%. After initially spiking when the Iran war began Feb. 28, the 10-year yield topped out on March 27 at almost 4.5%, one session before the S & P 500 bottomed. In his Sunday column and again Monday night on “Mad Money,” Jim Cramer highlighted the importance of lower rates to the market rally. It’s a big “Magnificent Seven” day in the portfolio. Amazon and Meta Platforms are each up more than 4%, followed by a 3% gain in Alphabet , and 2% moves in Microsoft and Nvidia . Apple is the lone red name in the group, though it’s down by less than 1%. As noted, we would rather be sellers than buyers in these current markets conditions. If not for our trading restrictions, Amazon is a name that we would’ve looked to trim — something Jim mentioned during Tuesday’s Morning Meeting. There are no major earnings after the closing bell on Tuesday. Before the opening bell Wednesday, we’ll see earnings from Morgan Stanley , Bank of America , ASML , and PNC . The ASML quarter will be one to watch. It’s a key report for investors in the AI buildout because its incredibly complex lithography machines are among the key bottlenecks to expanding chipmaking capacity. (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.
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