Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch — an actionable afternoon update, just in time for the last hour of trading on Wall Street. Markets: Wall Street surged Wednesday thanks to the second encouraging inflation report this week and a batch of strong bank earnings. The consumer price index, excluding food and energy, came in slightly below expectations before the opening bell Wednesday, one day after a measure of wholesale inflation did the same. Odds that the Federal Reserve will cut interest rates twice this year increased after Wednesday’s CPI print, according to the CME FedWatch tool. The hot December jobs report released Friday had caused investors to rethink the rate-cutting path ahead. Financials were one of four sectors in the S&P 500, out of 11, to be up more than 2% Wednesday. Communication services, consumer discretionary and tech are the others. Earnings reports drove the move in financials. Club name BlackRock popped roughly 5% after its results showed recent sellers left the train too soon. Wall Street wisely focused on the big picture with fellow portfolio stock Wells Fargo, sending its shares up 7%. Meanwhile, Goldman Sachs validated our recent switch out of Morgan Stanley as executives sounded upbeat on dealmaking activity in 2025. Bristol vision: The largest market for Bristol Myers Squibb’s new schizophrenia treatment may, in fact, be patients with Alzheimer’s disease. That’s according to company leaders who spoke with our CNBC colleague Annika Kim Constantino at the JPMorgan Healthcare Conference in San Francisco.Here’s an excerpt from her story. In an interview, company executives said each treatment use they are studying for Cobenfy has multibillion dollar potential, including Alzheimer’s disease psychosis, Alzheimer’s agitation and Alzheimer’s cognition, bipolar disease and autism. But Alzheimer’s is the “really large market here,” Bristol Myers Squibb CFO David Elkins told CNBC. … There are nearly 6 million patients in the US with Alzheimer’s, and around half of them have psychosis, or symptoms such as hallucinations and delusions, Elkins said. Cobenfy could be the first drug specifically approved for Alzheimer’s-related psychosis, said Chief Commercialization Officer Adam Lenkowsky. Cobenfy’s long-term potential is at the heart of our investment thesis in Bristol Myers, and its opportunity in areas beyond schizophrenia figures into our optimism. Jim Cramer has said Cobenfy’s annual sales could one day reach $10 billion when factoring in all its possible uses. We’ll be keeping our eye out for the results of Bristol Myers’ late-stage trial on Alzheimer’s disease-related psychosis, which are now expected to be released later this year. Shares of Bristol Myers were modestly higher Wednesday. Fellow portfolio name Eli Lilly also has exposure to the Alzheimer’s treatment market but in a different way. Lilly’s Kisunla, approved by US regulators last year, seeks to slow the actual progression of the memory-robbing disease by removing abnormal protein clumps on the brains of Alzheimer’s patients. The drug is off to a slow start commercially. Biotech exports: Club names GE Healthcare and Danaher gave back early gains Wednesday on news of new Commerce Department controls on biotech equipment exports to China. The agency cited national security concerns, saying the biotech tools could be used for “human performance enhancement, brain-machine interfaces, biologically-inspired synthetic materials, and possibly biological weapons.” Research analysts at Leerink said Wednesday the rule “looks narrow.” That could limit the impact on Danaher. Plus, Danaher can provide almost its entire portfolio locally in China, which should help the company navigate the controls. We don’t believe GE Healthcare sells any products tied to this ruling, but the stock still fell in sympathy. It also has a strong manufacturing presence in China. The new biotech export rules are a part of the Biden administration’s broader strategy to restrict the flow of cutting-edge American technology into China. The White House fears that access to such tech could be used by the Chinese government to strengthen its military capabilities. On Monday, the Commerce Department also proposed new restrictions on AI chip exports, hitting portfolio stock Nvidia in back-to-back sessions. However, Nvidia shares jumped 3% Wednesday, breaking a five-session losing streak. China update : Before the export ruling surfaced, GEHC shares opened higher Wednesday, the morning after what we would describe as a sigh of relief from management in its presentation at the JPMorgan Healthcare Conference. The major takeaway: China is coming in a little better than expected with signs of increased activity. While there may be signs of green shoots, visibility remains low, and management was prudent to keep expectations down by reiterating caution. Jeff Marks, director of portfolio analysis for the Investing Club, said Wednesday he is glad that the business in the world’s second-largest economy is not getting worse as the company waits for promised economic stimulus from the Chinese government to kick in. Up next : Following strong quarterly results from our three portfolio financial firms, bank earnings continue Thursday morning with Bank of America and Morgan Stanley. We will look for Nvidia and Broadcom readthroughs in Taiwan Semiconductor Manufacturing Company’s before-the-bell earnings. In addition to earnings, the government’s December read on retail sales is out at 8:30 am ET. While not adjusted for inflation, we’ll see how shoppers felt during the final month of the holiday shopping season against the backdrop of the cooler consumer inflation trends detailed on Wednesday morning. 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Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch — an actionable afternoon update, just in time for the last hour of trading on Wall Street.
