Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch – an actionable afternoon update, just in time for the final hour of Wall Street trading. Stocks bounce back: Tuesday’s rally accelerated in afternoon trading, with the S&P 500 and tech-heavy Nasdaq climbing about 2%. Meanwhile, the Dow Jones Industrial Average added about 600 points, or 1.5%. All three major US equity indexes remain in negative territory for the week, however, after Monday’s heavy losses during the global market selloff. The S&P, Nasdaq and Dow are also on pace to snap three-session losing streaks on Tuesday. While it is nice to see a break from selling, we are aware that declaring an end is quite difficult in this environment. Instead of worrying about the bottom line, our approach has been to watch high-quality companies being unfairly punished in the wider wreckage as losers emerge to help finance these acquisitions. Within the S&P 500, the top-performing sectors on Tuesday were real estate and information technology, both of which were among the worst-hit groups in Monday’s carnage. Real estate is one sector that benefits from lower interest rates. The tech sector has taken a hit since mid-July, and investors are stepping in to buy dips in several battered names, including Nvidia Holding Club and Meta Platforms. If the gains continue, Tuesday will be just the fourth positive day for tech since the July 15 close. The takeaway: The S&P 500 may be down about 1% the past two days, but that doesn’t mean every stock is down. Factoring in Tuesday’s session, many stocks – including some in the portfolio – are being released from volatility with gains so far this week. Six stocks in the portfolio hold this distinction. They are Broadcom, Meta Platforms, Costco, Disney (more on that name in a second), Eaton and Dover. Earlier on Tuesday, we bought shares of Eaton along with Advanced Micro Devices, which is one of the few Club stocks in the red on the session. Dover was among the stocks we bought in Monday’s selloff. Disney rises: Disney shares added to their gains after the company announced plans to raise annual fees for its subscription services. It’s also adding new programming to Disney+ starting in September, like ABC News Live. The higher subscription fees are a key development for Disney’s streaming business, which on Wednesday morning is expected to report a small operating loss of $135 million in the quarter. While Disney’s DTC is on track to become profitable soon, management’s ambitions don’t end there. A few calls ago, CFO Hugh Johnston said the plan is for streaming to reach double-digit margins “with some sense or urgency,” though it’s still unclear what that urgency means. CEO Bob Iger has also previously said the company would love to have margins like Netflix. In 2023, the streaming giant’s operating margins were 20.6%. Earlier this year, when we looked at ways Disney could work toward Netflix’s level, we noted that additional price increases were a lever the company could pull. Now it is, and it’s no wonder investors are cheering the news. Next: Disney leads Wednesday’s earnings pack. In addition to the discussion about streaming profitability, the executives’ comment about demand at its theme parks takes on added significance given investor concerns about the US economy. Other notable reports Wednesday include CVS Health, Wegovy maker Novo Nordisk and Emerson Electric. The economic data calendar is light ahead of Thursday’s initial jobless claims report. (See here for a complete list of holdings in Jim Cramer’s Charitable Foundation.) As a subscriber to the CNBC Investing Club with Jim Cramer, you’ll receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a share in his charitable trust portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after the trade alert is issued before executing the trade. INFORMATION ON MESIPERM INVESTMENT CLUB IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, INCLUDING OUR STATEMENT. NO OBLIGATION OR FIDUCIARY DUTIES EXIST, OR ARE CREATED BY VIRTUE OF YOUR RECEIVING ANY INFORMATION DIRECTED IN CONNECTION WITH THE INVESTOR CLUB. NO SPECIFIC RESULTS OR PROFITS ARE GUARANTEED.
Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch – an actionable afternoon update, just in time for the final hour of Wall Street trading.