New market highs, IPO market heats up, and a good sign for Stanley Black & Decker
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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.) Setting records: The market hit new highs Thursday thanks in part to continued bullishness about how artificial intelligence is driving a wave of spending in semiconductor chips and other technologies. “The semis are reacting to the incredible comments from Micron CEO Sanjay Mehrotra about how business for his high-end chips is so strong that he is already on allocation,” Jim Cramer said. “That means strength for Nvidia and Broadcom but also hyper scalers like Amazon , Meta Platforms , Alphabet , and Microsoft (and Synopsys , which I visited with in California this week and is amazing.)” Wait on Apple: Even though the broader market strengthened throughout the day, it did so without the help of Apple . Shares of the iPhone maker fell after the Justice Department sued the company on accusations it violated antitrust law . “Let’s be clear, they are going to sell Apple all day,” Jim said. “You do not get a turn in the stock. You have to let them sell. It might finish at the low. ” Then the technicians will have you sell it tomorrow. This is how Apple trades. But the Justice Department did this with Google and now you can’t even see where their lawsuit was filed when you look at the chart.” In October 2020, the DOJ filed an antitrust lawsuit against Google over its search practices. In January 2023, the DOJ filed a suit against Google claiming anticompetitive auction manipulation of its digital advertising technology products . “Do not buy Apple today. Let them finish selling,” Cramer added. More IPOs to come?: The IPO market is finally starting to heat up. Wednesday saw plenty of enthusiasm for Astera Labs , and that stock is continuing its gains. Reddit appears to be an early success as well based on its IPO price of $34 a share and first trade at $47. Morgan Stanley was the lead underwriter for both IPOs and our story from earlier talks about the flywheel impact a healthy IPO market has on the rest of Morgan Stanley’s businesses. “Morgan Stanley is the biggest beneficiary of the hot IPO market. The stock is still very cheap,” Cramer said. Big beat on existing home sales : 4.38 million vs. 3.95 million expected, up 9.5% month over month in February, the largest gain in a year. We bring this up because the existing homes market is a key proxy for Stanley Black & Decker tools business. The concept is simple. New homes don’t need to be remodeled and fixed up, but older homes do. A homeowner is more likely to put money into their house after they buy it. Mortgage rates still need to come down to get this market going again, but this number was a step in the right direction. SWK shares are up roughly 3% Thursday, extending its week-to-date gains to more than 8%. Other items: “I am seeing weakness in many of the consumer product stocks but not Procter & Gamble . When the smoke clears, that means PG goes higher,” Jim said. The consumer staples sector was one of the laggards in the market Thursday. This underperformance was likely due to the Fed’s comments Wednesday that it is still penciling in three rate cuts this year, as well as preference for semiconductors and the AI trade amid bullish comments from Micron. “Watching retailers that aren’t nearly as good as TJX going higher,” Jim said. “Is it time to circle back to this high-quality retailer after good Ollie’s quarter?” Big earnings night plus a key interview: With the Fed out of the picture, there is greater attention on earnings. Thursday is a big one, with Nike , Lululemon , and FedEx all scheduled to report. Also, Cramer is sitting down with Palo Alto Networks CEO Nikesh Arora on “Mad Money.” “Will Nikesh come out swinging tonight? I think he will.” (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.
US Attorney General Merrick Garland announces an antitrust lawsuit against Apple, at the Justice Department in Washington, DC, on March 21, 2024.
Mandel Ngan | AFP | Getty Images
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.)
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