This stock is our favorite way to hedge against the pickup in inflation

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 500 index overcame a softer open and rose to new record highs on Wednesday despite another warmer-than-expected inflation report that sent long-term U.S. Treasury yields higher and renewed concerns about future monetary policy decisions. The producer price index (PPI) rose by a seasonally adjusted 1.4% in April, raising the annual rate to 6%, its highest level since 2022. The 10-year benchmark Treasury bond yield hovered around 4.48% in afternoon trading following the announcement. Renewed inflation fears have caused investors to move out of consumer stocks that may feel pressure due to weaker spending power and back into AI-related names. Semiconductor and data center-related names rebounded from Tuesday's decline, helping offset weakness in more speed-sensitive areas of the market. Shares of Club, which owns Nvidia, rose nearly 3% to an all-time high. Fellow club names Eaton and Corning recouped some of the previous session's losses, gaining about 1.5% and 2.5% respectively. As the market grapples with the future after a succession of hot CPI and PPI reports, one portfolio stock to consider as an inflation hedge is industrial gas giant Linde. Linde distributes gases such as oxygen, nitrogen and hydrogen in several different ways. One of these is "on-site" agreements, where Linde builds plants on or near its customers' facilities and distributes gases via pipeline. In these supply agreements, Linde recovers the higher energy and raw material costs by transferring them to the customer. Higher energy costs will not affect profits. Another important agreement is "merchant" agreements, under which Linde delivers gases from its plants to storage containers at customer facilities. The third method is packaged gases, where Linde dispenses smaller volumes into metal containers. With these two distribution methods, Linde can manage energy variability by imposing and subtracting surcharges. If inflation becomes more ingrained, these additional fees eventually translate into higher prices for them. Linde's inflation hedge status is one of several reasons why we have kept this stock in our portfolio for many years. Recently, we have focused on its presence in electronics and aerospace as end markets that could help accelerate volume growth again. Volume growth and price increases are the ideal one-two punch. Looking ahead, Cisco Systems reports after the bell. We made the mistake of exiting our Cisco position at the end of March due to concerns about rising memory prices hurting gross margins, but we still continued to generate solid earnings. We want to hear what management has to say about AI network demand. Klarna will report before the opening bell on Thursday. Weekly unemployment claims and April retail sales are on the economy's agenda on Thursday. (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.