Stocks fall to end the week — but this time the market rotation is not to blame
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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. Markets: After slightly lower opens, the S & P 500 and Nasdaq Composite were firmly in the red in Friday afternoon trading and on pace for a third straight day of declines. The Dow Jones Industrial Average also fell Friday. Much of the week was dominated by the market rotation out of 2024 technology winners into small caps and value stocks. But what we have Friday is a more typical down day. Exchanged-traded funds tracking the S & P 500 growth and value indexes were both down about 0.6%. And decliners outnumbered advancers on the New York Stock Exchange by nearly two to one. Sector scoreboard: Energy, financials, and real estate were the three big S & P 500 sector winners during the uneven week. The gains in energy and financials — up around 2.5% and 1.5%, respectively — may be due in part to the so-called Trump trade, with the idea being that a potential second Donald Trump administration would be more friendly with less regulation of those sectors. Real estate, up about 1%, rallied on expectations of Federal Reserve rate cuts this year, which could spur more activity in the industry. Information technology was the worst-performing sector on the week by far, down nearly 5%, due to the market rotation, concerns about tariffs and the talk of tighter export controls on semiconductors to China. The second-worst sector was consumer discretionary, which dropped on soft earnings from the likes of Domino’s Pizza and the pullbacks in Chipotle and Club holding Amazon . Communication services fell due to the large weighting of Club names Meta Platforms and Alphabet in the sector; the two internet giants also were caught up in the market rotation. Constellation: In a “Mad Money” interview Thursday, Constellation Brands CEO Bill Newlands pushed back on a number of overhangs on its stock, including sluggishness in the beer category overall and a potential hit from another Trump presidential term. Shares of the Corona and Modelo parent dropped more than 5% this week. “When you look at the growth story that we’ve had, it’s not a flash in the pan. We’ve had a tremendous growth over a long window of time,” Newlands said. The CEO of the Mexican beer importer also refuted the idea that a Trump victory in November would be an obstacle for its business. The Republican presidential nominee recently floated a 10% tariff on foreign imports, and there’s also questions about what a more strict immigration policy could mean for a key demographic of Constellation customers. “We already have four years of history of a Trump administration,” Newlands said. “In two of those four years, our business grew high-single digits at the top line. In two of those years, we grew low double digits at the top line. So we’ve had tremendous success during the previous Trump administration. … Relative to the question of tariffs, I think it’s important to recognize that a significant part of our inputs come from U.S. farmers. I highly doubt that any tariff expectations are really designed to hurt U.S. farmers.” Up next: The pace of second-quarter earnings season picks up next week. Danaher is scheduled to kick off the action Tuesday morning followed by Alphabet that evening. Ford Motor ‘s results are due out after the close Wednesday. Thursday is about the industrials, with Honeywell International and Dover both set to report before the bell. Next week’s most notable economic release is Friday morning’s core personal consumption expenditures price index, which is a key inflation reading watched by Fed policymakers. (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.
Traders work on the floor of the New York Stock Exchange during afternoon trading on June 3, 2024.
Michael M. Santiago | 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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