The CNBC Investing Club with Jim Cramer releases the Homestretch every weekday, providing an actionable afternoon update for members just in time for the last hour of trading on Wall Street. The market rundown on Thursday indicated that all three major indices had made new intraday records earlier in the trading day, following a big rally on Wednesday. Eli Lilly’s stock dipped as a result of news that Swiss pharmaceutical firm Roche’s experimental obesity drug showed promise in a Phase 1 study. Despite the threat of new competition, the market may be underestimating Lilly’s defensive moat and future potential in the obesity drug market.
In terms of the Club portfolio, a few names are being taken out of the Bullpen. Deere, the maker of farm equipment, lowered its full-year outlook due to a challenging agriculture market and inventory destocking. The focus remains on companies tied to secular themes or coming out of a destocking period, with Dover still being eyed for a potential position. Walgreens Boots Alliance faces a challenging turnaround, leading to a decision to stay on the sidelines. Cloudflare is also a concern due to disappointing industry performance and high valuation.
In Jim’s quick takes, Walmart’s earnings report suggests positive news for Costco, with lower prices driving success for Walmart. Estee Lauder has been performing well, potentially due to support from Alibaba in China. Earnings are winding down for the week, with Applied Materials and Take-Two Interactive on the radar for Thursday night. Applied Materials provides insight into the chip industry, while Take-Two is anticipated to be in a transition period as investors await news on the official release date of GTA 6.
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