On Friday, Wall Street experienced a forceful sell-off, with the Dow Jones Industrial Average down over 750 points, the S & P 500 down 2.2%, and the Nasdaq down 2.5%. This sharp decline followed some soft economic data which raised concerns about the Federal Reserve’s decision to keep interest rates steady. After a weak jobs report was released on Friday morning, with lower-than-expected wage inflation and an uptick in unemployment, market odds increased for a rate cut in September. Jim Cramer believed the Fed should have cut rates at this week’s meeting, but he also urged calm, stating that the sell-off, especially in megacap tech companies, was overdone.
The U.S. economy added only 114,000 nonfarm jobs in the previous month, well below expectations. The unemployment rate rose to 4.3%, the highest since October 2021, and average hourly earnings increased by 0.2% for the month and 3.6% from a year ago, both figures below expectations. Investors responded to the weak job numbers by selling stocks and moving into bonds. The price of the 10-year Treasury soared and the yield fell to 3.81%, its lowest level since December. Bond traders have been lowering rates on consumer loans, as many are tied to the 10-year Treasury yield.
The CNBC Investing Club with Jim Cramer made a number of moves on Friday, utilizing their large cash position to take advantage of market volatility. They purchased shares of chipmaker Broadcom and Palo Alto Networks, upgraded Nvidia, Amazon, and Meta Platforms, and indicated interest in DuPont, Dover, and Wells Fargo for the following week. The sell-off presented an opportunity for the club to increase exposure to high-quality companies at more attractive levels. Earnings reports from Wynn Resorts, Disney, and Eli Lilly were on the horizon, with a focus on key drug sales for Eli Lilly.
As a subscriber to the CNBC Investing Club with Jim Cramer, members receive trade alerts before Jim makes a trade. Jim follows a 45-minute waiting period after sending a trade alert before buying or selling a stock in the portfolio and waits 72 hours after mentioning a stock on CNBC TV before executing the trade. The information provided by the club is subject to terms and conditions, privacy policy, and disclaimer, with no guaranteed outcomes or profits. The club aims to provide actionable updates in the final hour of trading on Wall Street, offering insights and analysis to help navigate market volatility and identify investment opportunities.
Overall, Friday’s sell-off on Wall Street was driven by concerns over economic growth and the Federal Reserve’s decision to keep interest rates steady. The weak job report led to increased market odds for a rate cut in September, prompting investors to move into bonds. The CNBC Investing Club with Jim Cramer took advantage of the market volatility to make strategic moves, including purchasing shares of select companies and upgrading others in the portfolio. With earnings reports from key companies on the horizon, the club aims to navigate the market challenges and identify opportunities for growth in the portfolio.
