Chips get crushed, and clues in the jobs report for Modelo brewer Constellation Brands
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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. Stocks keep sliding: September is proving to be the rough month we thought it would be. A bruising first week of trading continued Friday after the weaker-than-expected August jobs report kept alive questions about the health of the U.S. economy. The S & P 500 is down about 1.7% Friday and on pace for its fourth consecutive day of declines. Still, it’s worth keeping in mind that the index is still trading well above its Aug. 5 close of 5,186, the day the popular yen carry trade blew up and caused a forced liquidation of equities. The Nasdaq Composite , meanwhile, is lower by roughly 2.5% as technology stocks, especially semiconductor firms, continue to see heavy selling pressure. Club holding Broadcom ‘s earnings report late Thursday added to the pain, pushing its stock down more than 9% Friday — though Jim Cramer said earlier that weakness is worth buying . A popular exchange-traded fund for chip stocks is down more than 11% over the past four sessions and is tracking for its worst week since January 2022. Constellation follow up: The August jobs report contained some relevant news for Club holding Constellation Brands, our colleague Brandon Gomez , who covers the company for CNBC TV, reported: While we learned Friday that the broader unemployment rate ticked lower, for Hispanic and Latino workers it actually rose to 5.5%, up from 5.3% in July and 4.9% in June. The Modelo brewer self-reports that more than half of its customer base are Hispanic Americans, and earlier this week it lowered its beer net sales guidance, citing in part an uptick in unemployment. Friday’s jobs report confirms that trend is intensifying for Constellation’s key customer demographic. Recall that shares of Constellation surprisingly climbed 2.5% during Tuesday’s market sell-off despite issuing its more subdued sales outlook that day. We described that move as partially a “buy the confession” reaction because investors had sensed some weakness along with a broader move into defensive stocks such as consumer staples. The latter force seems to be at play again Friday, with shares of Constellation and its consumer staples sector holding up much better than the overall market. Defensive stocks like staples tend to hold up much better when the market is concerned about economic growth. We’ll continue to keep an eye on Hispanic employment trends and the potential implications for Constellation. For now, we remain believers that Constellation is gaining overall market share and should see a free cash flow inflection once its current investment cycle in manufacturing capacity is completed. Up next: We hit an earnings lull next week with only three companies in the S & P 500 scheduled to report earnings: Oracle , Kroger and Adobe . The three economic reports we’ll be focused on are the consumer price index Wednesday, followed by the producer price index and initial jobless claims Thursday. Also on Thursday is our September Monthly Meeting, which is set to start at our usual time of noon ET. — CNBC’s Brandon Gomez contributed to this report. (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.
Bottles of Corona, Modelo and Pacifico beer are displayed on the a shelf at a supermarket on April 6, 2017 in San Rafael, California.
Justin Sullivan | 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.
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