Can a new batch of tech earnings rescue the market? Here are the factors at play
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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.) Off the lows : U.S. stocks were wobbly Thursday but traded well off their worst levels of the session. The market was already headed toward a down session due to disappointing reactions to earnings, which haven’t been entirely bad. There have been plenty of earnings beats in the past 24 hours, but the lack of raises to the full-year outlooks hasn’t met the high bars set by bullish investors. On top of earnings-driven declines led by Club name Meta Platforms , it was concerns about stagflation that roiled Wall Street after the first quarter GDP report showed tepid economic growth and continued price pressure. Stagflation is when economic growth stagnates, but inflation remains high. The bond market hasn’t been kind to the stock bulls, with the 10-year Treasury yield hitting its highest level in more than five months. However, the auction of $44 billion of 7-year notes Thursday afternoon mostly came and went without fireworks. Pockets of green : In days when the market is down significantly in early trading, it’s always interesting to see which groups of stocks bounce first. Unbothered by the move-up in bond yields, it was utilities at the front of the pack for most of the day. We understand the tilt toward defensive if the market is concerned about sluggish economic growth – but energy, materials, and industrials were also higher. Tech started the day weak but a rally in semiconductor stocks, including Club names Nvidia and Broadcom , helped bring the sector into positive territory. It helps that Meta is writing huge checks to both companies to support its artificial intelligence initiatives. Opportunity in Meta? It was one of the largest drags in the market after providing soft second-quarter revenue guidance . However, the stock was trading off its worst levels of Thursday’s session. ” We sold some at $490 in March . You know what we want to do now? Buy it back. Because Mark Zuckerberg has earned our trust and we aren’t going to give up on him just because he sees an opportunity that the rest of us don’t, to monetize Gen AI,” Jim Cramer said late Thursday. Club earnings : Microsoft and Alphabet report after the bell. The bar should be a little easier due to Thursday’s market pullback. One thing to always remember about Microsoft is that it provides revenue guidance right before the conference call Q & A, so you can’t make a full judgement on the stock before listening to CFO Amy Hood. Obviously, the large weightings these two behemoths have in the S & P 500 make them key reports for market sentiment. What they have to say about AI-related capital expenditures will also impact the market. That’s how both Nvidia and Broadcom could rally big on a down day after hearing from Meta Platforms. Busy Friday : The next inflation test comes in the morning when the personal consumption expenditures price index for March is released. Core PCE, which excludes food and energy prices, is the Federal Reserve’s preferred measure of inflation. Friday also brings earnings from Exxon Mobil , Chevron , Abbvie , Colgate-Palmolive , and HCA Holdings . (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.
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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