The CNBC Investing Club with Jim Cramer releases the Homestretch every weekday, providing an actionable afternoon update just in time for the last hour of trading on Wall Street. As of October 1st, stocks are starting the first day of the fourth quarter on a lower note, following a similar trend seen at the beginning of August and September. The current pullback is attributed to conflict in the Middle East after Iran launched missiles into Israel, causing a flight to safety with U.S. government bonds and the dollar rallying, oil spiking, and energy and defense stocks jumping. The club purchased shares of Coterra Energy as a hedge in case the situation escalates and sparks a larger move in oil, along with the recent recovery in natural gas.
The S&P 500 tech sector is experiencing a rough day due to a flight-to-safety session, which usually leads to tech weakness as investors take risk off the table. Additionally, company-specific headlines are impacting the group, with Apple facing scrutiny over iPhone 16 lead times and its supply chain. Despite these challenges, the club maintains a long-term view that AI-infused devices will drive a robust iPhone upgrade cycle over time. PC-related stocks are also suffering, with Citigroup taking a cautious view on a second-half recovery and downgrading HP Inc and CDW Corp. Samsung Electronics’ layoffs may be affecting the semiconductor industry. While the tech sector is down more than 2% on Tuesday, the energy sector is leading, with communication services and utilities also performing well.
Nike is set to report earnings after the closing bell, providing insights into the impact of economic stimulus measures in China. It will be Nike’s last earnings report before Elliott Hill takes over as president and CEO. Other companies reporting on Tuesday include fast-food fry supplier Lamb Weston and egg giant Cal-Maine Foods. Before the opening bell on Wednesday, Conagra, owner of brands such as Slim Jim, Hunt’s, and Orville Redenbacher’s, will report earnings. Additionally, the club is monitoring ADP’s private-payrolls report ahead of the Labor Department’s jobs report on Friday. Subscribers receive trade alerts before Jim makes a trade, with specific guidelines in place regarding the timing of executing trades based on CNBC TV discussions.
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