Walmart goes after Amazon on AI shopping — plus, 3 bits of great Boeing news
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. Market movements: It’s been a volatile day on Wall Street. The S&P 500 erased earlier losses of roughly 1.5% on Tuesday and moved modestly higher in afternoon trading. Initial concerns about a resurgence in US-China trade tensions sent the market crashing after Monday’s strong comeback rally from Friday’s tariff-fueled debacle. On Tuesday, Nasdaq remained stubbornly in the red as tech struggled. This was the only index of the S&P 500’s 11 sector indexes to decline in the session. Fed Chairman Jerome Powell’s statements regarding the Fed’s balance sheet do not seem to attract much attention from the market. As CNBC economics correspondent Jeff Cox wrote, “Powell said the central bank is approaching a point where it will stop reducing bond holdings but gave no long-term indication of where interest rates are headed.” Halting so-called “quantitative tightening” or allowing fixed-income holdings to decline would generally be seen as loosening monetary policy. But what matters most for the market, which expects two more rate cuts by the end of the year, is the path forward for the next interest rate move and borrowing costs. Chatbot shopping: On Tuesday, Walmart announced a new partnership with OpenAI. It allows the retailer’s customers and Sam’s Club members to shop and purchase directly through ChatGPT using the Instant Checkout feature. The Instant Payment feature, which was introduced on the chatbot late last month, is also used by retailers using the Etsy and Shopify e-commerce platforms. Walmart said ChatGPT will learn and predict customers’ shopping needs, aiming to create a more convenient experience; This will move away from the traditional dynamic of a search bar that returns a long list of items that Amazon is familiar with. “This is a direct attack on Amazon,” Jim Cramer said Tuesday. Amazon has its own AI shopping assistant called Rufus. Walmart’s shares rose 4% following the news. Amazon shares fell 1%; To be fair, it’s been a tough day for tech stocks overall. The Walmart partnership is among a series of mega-deals OpenAI has announced over the past few weeks; these include the club names Nvidia and Broadcom. Boeing trifecta: There are three major Boeing headlines on Tuesday. First, the Club name said it received $2.7 billion in multi-year contracts to create a key guidance component for Patriot interceptor missiles. Boeing is working with prime contractor Lockheed Martin and the US military. Second, Boeing announced that it delivered 160 commercial aircraft in the third quarter; This represents an increase of roughly 38% compared to the previous year. Year-to-date deliveries have increased by more than 50% to 440. Third, the European Commission approved Boeing’s $4.7 billion acquisition of troubled aircraft parts supplier Spirit Aerosystems. Boeing must sell all parts of Spirit, which supplies European aircraft consortium Airbus. The agreement to reunite Boeing and Spirit is awaiting US approval. Our last Boeing purchase took place during Friday’s weak period as we aim to strengthen our position. Next up: Following Tuesday’s bank earnings, Bank of America and Morgan Stanley are joining the party ahead of Wednesday’s open. The name of the club is Abbott Labs. United Airlines was the biggest quarterly report after Wednesday’s close. (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 CAN BE GUARANTEED.
