Our approach to the stock market heading into the Fed’s big Wednesday decision

By News Room Last updated Sep 17, 2024

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. Muted session: U.S. stocks were flat Tuesday after the S & P 500 briefly made a new all-time high in the session. Driving the early gains were more signs of economic resilience after solid August retail sales and industry production reports. A solid economy coupled with the anticipation of Fed rate cuts is what boosted stocks, especially more cyclical sectors like financials, industrials, and consumer discretionary. These are the groups that are expected to see a pickup in growth as interest rates fall and pressure on the economy eases. Conversely, defensive groups like healthcare and consumer staples are lagging, seemingly in anticipation of a jumbo size rate cut. We’re still debating when to next take profits in Procter & Gamble , as we outlined Monday . The rate-cut debate : Up against the market are questions of how it will immediately trade if the Fed cuts rates by 25 basis points versus 50 points. There hasn’t been a meeting with this much uncertainty on how the Fed will act in quite some time. We’re not playing into 25 vs. 50 game, which is why we don’t plan to take action heading into the big event. We could always scalp something if it looks too high or nibble if something falls too low. But sitting out is our game plan for now. Close to overbought : But one thing we have our eye on is how quickly the market has rallied back to its highs after a rough start to September. The S & P Oscillator was knocking on the doorstep of overbought territory after Monday’s session. We never like to anticipate the Oscillator’s moves, but it’s in the back of our minds. Up next : No major earnings after the market closes. Jim Cramer has Salesforce co-founder and CEO Marc Benioff on “Mad Money,” coming from the company’s annual Dreamforce conference in San Francisco. We expect to hear more about its autonomous AI agents and learn why other companies attempting to DIY (do it yourself) their AI instead of using Salesforce’s tools isn’t an effective strategy. General Mills reports in the morning, but the big event Wednesday is at 2 p.m. ET. That’s when we’ll learn if the Fed cut interest rates by 25 basis points or, as the current probability suggests, 50 basis points. Fed Chair Jerome Powell takes the podium at 2:30 p.m. ET to give his update on where he thinks the economy is headed and provides guidance on future monetary policy decisions. (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.

U.S. Federal Reserve Chair Jerome Powell holds a press conference following a two-day meeting of the Federal Open Market Committee on interest rate policy in Washington, U.S., July 31, 2024.

Kevin Mohatt | Reuters

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.

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