Bad loan worries hit stocks — plus, spin-offs, smartphones, and health care
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. Markets: The S&P 500 fell Thursday afternoon on concerns about credit stress in the banking sector. The latest issue arose when regional bank Zions announced plans late Wednesday to write off $50 million to cover two loans. Shares of Zions fell nearly 12% on Thursday. With this understanding, Capital One, one of the country’s largest credit card providers, lost more than 6 percent in value, while Wells Fargo, known for its consumer banking division, lost approximately 3 percent in value. Capital One and Wells Fargo are assets in the Club’s portfolio. Market concerns about US-China trade tensions and government shutdowns have also eased. Industry: New stock distribution details were announced Thursday for DuPont’s Qnity Electronics spinoff and Honeywell’s Solstice Advanced Materials spinoff. First, DuPont shareholders of record as of October 22 will receive one share of Qnity for every two shares of DuPont on November 1. Qnity and DuPont will begin trading as separate stocks on November 3. Qnity’s stock symbol will be “Q”. The new DuPont, which will focus on healthcare, water and miscellaneous industries, will retain the “DD” mark. Jeff Marks, the club’s director of portfolio analysts, wrote two great stories this week about Qnity and the new DuPont. Second, as of October 17, Honeywell shareholders will receive one share of Solstice for every four shares of Honeywell on October 30. Later that day, Solstice will begin trading separately under the ticker symbol “SOLS.” Honeywell’s code will continue to be “HON”. Honeywell plans to spin off its aerospace business in the second half of next year. The rest of Honeywell will be all about automation. Smartphones: New data shows stronger demand for Apple’s iPhone. In fact, Apple’s global smartphone shipments rose 4% year-over-year in the third quarter, solidifying second place among smartphone players, according to a new Counterpoint Research report. However, Samsung was #1 in terms of smartphone market share. Still, Apple’s global shipment growth was the fastest growing among most popular brands during the quarter, including Xiaomi, OPPO and others. The report, published by the research firm on Wednesday, said Apple’s newest iPhone 17 series was “well received” and saw “record-breaking pre-bookings across regions.” This is great news for Apple, whose Club name derives most of its revenue from iPhone sales. This is not a big surprise to us. We’ve written tons of contrarian stories about the power of the upgrade cycle. Health care: Amazon One Medical announced Thursday the expansion of pay-per-visit telehealth appointments to children ages 2 to 11. This is the e-commerce and cloud giant’s latest move to boost healthcare services. No health insurance plan, Amazon Prime or One Medical membership required. These visits cost $49 each for video and $29 for text message-based consultations. The service aims to treat diseases such as pink eye and lice in children, as well as some skin problems such as eczema, insect bites and contact dermatitis. Parents can also renew their child’s EpiPen and asthma medications. Earlier this month, prescription drug kiosks operated by Amazon Pharmacy opened at some One Medical offices in Los Angeles. Each machine is designed to stock hundreds of medications. The kiosks are planned to be available in other locations soon. Next up: Still no government economic report due to the shutdown. Financial names like American Express, Truist, State Street and Fifth Third Bancorp will report results before the opening bell on Friday. Given the credit concerns that roiled the market on Thursday, this should give investors more insight into the health of the U.S. consumer and banking sector. (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.
