The S&P 500 heads for a fifth day of declines, but drug stocks are a bright spot
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: Stocks are trading lower Thursday. The S & P 500 , in particular, is on pace for its fifth straight loss, wiping out all of August’s gains. The rotation out of momentum-driven winners and stocks with lofty price-to-earnings multiples — the dominant market story of the week — isn’t as pronounced Thursday, with stocks like Club name GE Vernova and Palantir holding up better on a relative basis. However, the influential “Magnificent Seven” cohort is mostly weaker, which explains why the traditional market-cap weighted S & P 500 is slightly underperforming the Invesco S & P 500 equal-weight ETF , known as the RSP. Holding up : The health-care sector is putting together a solid few days despite the broader market weakness. The group, which is still one of the worst performing sectors this year, came to life last week thanks to a surge in the beleaguered UnitedHealth Group on news that Berkshire Hathaway purchased a stake in managed care giant during the second quarter. Club name Eli Lilly also start to rebound from its post-earnings sell-off, giving the sector a lift. Fast-forward to Thursday, and pharma stocks are helping push the health-care group higher, and those rallies are linked to some better-than-feared trade news. According to the updated trade agreement framework between the United States and the European Union, branded pharmaceuticals imported from the EU will face a 15% tariff rate. Uncertainty over the Trump administration’s Section 232 sectoral tariffs on pharmaceutical imports hasn’t gone away, but 15% is much more manageable than some of the triple-digit threats President Donald Trump has previously floated. Europe is a popular place for drug manufacturing. Shares of both Bristol Myers Squibb and Eli Lilly were higher on Thursday as investors digested the tariff developments. With Thursday’s move, Lilly shares are down less than 5% from where they closed the day before its disappointing obesity pill data sent the stock plunging 14% in a single session. Up next: Zoom Communications , Workday , Intuit and Ross Stores report after the closing bell on Thursday. Ross Stores is a rival of Club stock TJX Companies , which reported its own strong set of results Wednesday morning. Meanwhile, Costco peer BJ’s Wholesale reports on Friday. However, the main event of the day will be Fed Chair Jerome Powell’s speech at annual Jackson Hole Economic Symposium. It starts at 10 a.m. ET and will be a market-moving event. (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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