Familiar winners dot Monday’s stock leaderboard. Here’s what the market is signaling
Every weekday, CNBC Investment Club with Jim Cramer publishes Homestretch, an actionable afternoon update just in time for the final hour of trading on Wall Street. The S&P is down on Monday but is trading well below its worst levels of the session. The Nasdaq even struggled into slightly positive territory. The decrease in selling pressure on stocks as the increase in oil prices cooled further demonstrated how important an indicator crude oil had become for investors during the Iran war. West Texas Intermediate crude oil fell from roughly $119 a barrel late Sunday to around $100 at market open and fell to $95 by the afternoon. Several developments helped pull oil back below $100. Reuters reported that the Trump administration is reviewing options to stabilize the market, including coordinating with the Group of Seven countries on the potential release of strategic oil reserves and temporarily easing certain requirements under the Jones Act, which requires ships carrying goods between U.S. ports to be American-built, owned and crewed. These are steps in the right direction, but it remains to be seen how effective these countermeasures will be in balancing supply disruptions resulting from barrels coming offline from GCC countries and uncertainty about shipments through the Strait of Hormuz. On volatile days like Monday, it can be especially useful to look below the index and see what the market’s winners and losers are saying. Financials, consumer discretionary and materials were the worst-performing sectors in the S&P 500 on Monday, and their weakness alongside rising oil prices makes sense. Higher crude oil prices often translate into higher gasoline prices, and when filling up becomes more expensive, consumers have less money left over for discretionary spending. This puts pressure on growth in the consumer-driven U.S. economy, and all three of these sectors are considered economically sensitive. It’s notable that tech- and AI-related stocks, the engines of this multi-year bull market, led the market’s recovery on Monday. This might be a way of saying that the market is, at least for now, over this (hopefully short-term) move in oil of this AI capex investment cycle. Broadcom, the name of the club, is adding to last week’s after-earnings gains of more than 4% and remains near the top of the leaderboard for the entire S&P 500. Meanwhile, Nvidia is trading higher as the market increasingly focuses on next week’s GTC conference and GE Vernova responds to analysts’ positive recommendation. Outside of our portfolio, we’re also seeing strong gains in some memory and storage names like Sandisk, Western Digital and Seagate. KLA Corp and Lam Research, two of the leading semiconductor equipment suppliers, also rose significantly on Monday. Following the closing bell are earnings from Hewlett Packard Enterprise, Casey’s General Stores and Vail Resorts. We’ll see earnings from retailer Kohl’s and Chinese electric vehicle maker NIO before the opening bell on Tuesday. On the data side, there’s the NFIB Small Business Optimism Index and the National Association of Realtors’ Breakout Home Sales. (See here for a complete list of stocks in Jim Cramer’s Charitable Trust.) When you subscribe 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 trading alert before buying or selling a stock in his charitable foundation’s portfolio. If Jim talked about a stock on CNBC TV, he waits 72 hours after issuing the trading alert before executing the trade. THE ABOVE INVESTMENT CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, TOGETHER WITH THE DISCLAIMERS. NO CIVIL OBLIGATIONS OR DUTIES EXIST OR SHALL BE RESULTING FROM YOUR RECEIVING ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTMENT CLUB. NO SPECIFIC RESULT OR PROFIT CAN BE GUARANTEED.
