Stocks hit record highs — plus, we started a new name

Stocks jumped for a second straight week, reaching record highs on Friday, as trade and shutdown drama in Washington took a backseat to cooler inflation data and stronger earnings. The S&P 500 and Nasdaq rose 2% and 2.3%, respectively, for the week. In fact, the S&P 500 broke above 6,800 for the first time on Friday and then closed just below that level. Both stock indicators closed at record highs on Friday. It was an encouraging development that the September consumer price index, which was announced with a 10-day delay due to the federal government shutdown, started to rise on the last day of the trading week. Headline CPI increased by 0.3% on a monthly basis and 3% on an annual basis. The increases were not as much as expected. The core interest rate, which excludes food and energy prices, increased by 0.2% compared to the previous month and 3% compared to the same period last year. Both earnings were again less than expected. The CPI report was well received because it left the door wide open for the Fed to cut interest rates again when central bankers meet next week. .SPX .IXIC 5D Mountain S&P 500 and Nasdaq weekly performance CPI was also the only official economic data released during the government shutdown, which is now in its fourth week. The Senate adjourned Thursday and will not reconvene until Monday afternoon. As the shutdown dragged on, there was much talk about President Donald Trump's decision to cancel trade talks with Canada on Friday, and an ad appeared to show former U.S. President Ronald Reagan speaking negatively about tariffs. On the more positive side of the business ledger, the White House confirmed that Trump's visit to Asia next week will include a meeting with Chinese President Xi Jinping. Neither the trade headlines nor the lockdown impasse affected the markets. In addition to inflation data, supporting the stock market has been a steady stream of great earnings reports, with nearly 30% of the S&P 500 reporting quarterly results so far. In fact, 87% of these names beat earnings expectations, according to LSEG, which is much higher than the typical 67% win rate. Club names Danaher, Capital One, GE Vernova, Honeywell and Dover followed this trend when releasing their own figures this week. On Tuesday morning, Danaher reported improvement on its top and bottom lines as the life sciences company released an optimistic initial forecast for the next fiscal year. Stocks also rose. Investors welcomed Danaher's much-needed positive news after a long period of underperformance. DHR YTD mountain Danaher YTD “Danaher has tested our patience in recent quarters as the post-pandemic recovery has been challenging for companies serving the biotechnology and pharmaceutical industries; a material presence in China added another hurdle to overcome,” Zev Fima, the club's portfolio analyst, wrote in his earnings analysis. "But a market reaction like the one we saw on Tuesday is why we continue to invest in Danaher, which has been a reliable performer." Club maintained its price target of $240 per share but downgraded the stock to 2, meaning we might consider buying more shares in the event of a pullback. This doesn't mean there's been a change in our Danaher thesis. On the contrary, shares are up over 22% since late September, when we added to our last position. Danaher is up almost 6.7% for the week, moving into #2 on our weekly leaderboard. Capital One reported a sizeable quarterly earnings increase on Tuesday evening. Our biggest takeaway from the nation's largest credit card issuer was better-than-expected credit performance. During Friday's morning meeting, Jim Cramer said Capital One was his "favorite stock in the portfolio, despite a huge uptick since we bought it." COF YTD mountain Capital One YTD "Credit has been a hot topic in the market lately due to the notable collapses of auto parts maker First Brands Group and subprime auto lender Tricolor Holdings. Because Capital One has a large exposure to the subprime market, some investors are concerned about how well their loans hold up," said Jeff Marks, the club's director of portfolio analysis. "He wasn't so sure," he wrote. "That's why it was so important to see Capital One once again report strong credit metrics with better-than-expected net charge-offs and provisions for loan losses." Club maintained its 1 buy-equivalent rating and $250 price target. Capital One's weekly gain of nearly 6.5% put it in fifth place among the week's gainers. On Wednesday, GE Vernova reported strong earnings and strong backlog growth. Although management is working on top items, shares of the natural gas turbine maker are still falling amid weakness in speculative areas of the energy trade. GEV YTD mountain GE Vernova YTD The club maintained its buy-equivalent 1 rating, encouraging its members to buy shares in the next session. We also reiterated our $700 price target for GE Vernova. After all, unprecedented demand for more power due to increased AI data center investments is a financial windfall for energy industry heavyweights like GE Vernova. "This stock is a rocket ship," Jim said Friday, comparing GE Vernova's chart pattern to the charts of Alphabet, Advanced Micro Devices and Oracle before they made big rallies. While GE Vernova is the worst-performing stock this week, falling 2.6%, the stock is still up more than 77%, making it the portfolio's second-best stock year-to-date. Honeywell released a stellar quarterly report on Thursday that beat expectations on sales, earnings and organic growth. Management also raised the industrial conglomerate's full-year guidance. However, the most notable thing for us was the recovery in the company's aviation division. The earnings report comes ahead of Honeywell's launch of its Solstice Advanced Materials subsidiary on October 30. The spin-off of the remaining aerospace and automation division will be completed in the second half of 2026. "These turns will support further growth and enhance shareholder returns as they will allow each of the three new entities to operate in a more focused and efficient manner," HON YTD mountain Honeywell YTD Zev said in its earnings analysis Thursday. he wrote. Club reiterated a buy-equivalent 1 rating and $255 price target on Honeywell shares. Honeywell shareholders of record as of October 17 will receive one share of Solstice for every four shares of Honeywell. We plan to maintain our Solstice shares and our fourth-best Honeywell shares, up about 6.5% this week. Dover gave investors a reason to hang on to lagging stocks after the company reported better-than-expected third-quarter earnings on Thursday. Management also raised its full-year earnings forecast and highlighted Dover's potential to benefit from lucrative trends such as artificial intelligence development. DOV YTD mountain Dover YTD Dover stock had its second best day of 2025 as a result. The club reiterated its 1 buy-equivalent rating and $210 price target. After all, despite Thursday's rally, Dover shares are still trading at a steep discount to their industrial peers. Dover is our third best weekly performer, up approximately 6.6% over the past five trading days. Ten portfolio names will be on the list next week: Amazon, Apple, Bristol Myers Squibb, Boeing, Corning, Eli Lilly, Linde, Meta Platforms, Microsoft and Starbucks. We will examine our thesis for each, which may lead to changes in our ratings or price targets. Of course, quarterly earnings aren't the only time we do this. Texas Roadhouse was this week's prime example. We downgraded Texas Roadhouse's buy equivalent rating to 2 from 1 on Tuesday. Rising beef prices continue to pressure margins for Texas Roadhouse and are expected to continue through 2026. To make matters even more complicated, management can only slowly overcome beef inflation with increases in menu prices. We're keeping it in stock for now though. Texas Roadhouse was one of many portfolio moves made this week. We also carried out three transactions. He took office at Club Corning on Tuesday. The company, known for its production of special glass, including fiber optic cables, will benefit from its artificial intelligence structure. This is because the rise of artificial intelligence will increase demand for the same connectivity products due to their presence inside data centers. We also like Corning shares because of its Apple partnership. Apple's owner, Club, had previously announced a $2.5 billion commitment to Corning, which produces cover glass for all iPhones and Apple Watches. In the same session, the Club booked a profit on Wells Fargo after the stock's massive post-earnings rally reached record highs. We made a gain of approximately 170% on the shares purchased in January 2021. However, the sell-off does not reflect a change in our long-term bull thesis on the bank. On Friday, we sold some Eaton shares, taking advantage of the electrical equipment maker's recent recovery. Eaton has rebounded since management's third-quarter forecast in early August fell short of expectations and rattled shares. We thought the post-earnings sell-off was unwarranted given the success of the Electrical Americas business, which has benefited greatly from the AI boom. (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 would wait 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 GUARANTEE IS MADE.