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. Market update: Stocks are rallying with the S&P 500 hitting an all-time high. The gains extend the broad market index’s post-CPI run to more than 4%. A drop in the 10-year Treasury yield has been a catalyst for stocks over this past week. However, rates are slightly higher Wednesday with the 10-year reclaiming 4.6%. The dollar hit a new two-week low, but the impact unfavorable exchange rates have on revenues from multinational companies was more visible Wednesday. Here are a few examples: Johnson & Johnson estimated unfavorable currency will impact 2025 sales by $1.7 billion, or 2%; Procter & Gamble said its fiscal year 2025 guidance now includes a $300 million after-tax hit ($0.20 per share) from unfavorable FX. It previously forecast a neutral impact; and mentioned Abbott Lab’s quarter would have looked even better if not for the strong dollar. We’re pleased to see the market block out the noise and focus on Abbott’s underlying growth — organic sales increased 10.1% in the fourth quarter and the company expects 7.5% to 8.5% growth in 2025. Sector wrap : Technology and the AI trade are the big stories of the day after OpenAI, Oracle, and Softbank announced a commitment to invest an initial $100 billion to support AI infrastructure through a joint venture called Stargate. The market is taking this commitment as a sign that AI-driven spending isn’t slowing down and remains a multiyear journey. The communication services sector is up nicely and that’s mostly due to Netflix, though Meta and Alphabet are higher, too. Consumer discretionary is slightly positive thanks Amazon, but the biggest gainer in that group is the auto supplier Aptiv which announced a plan to separate its electrical distribution systems division from its higher-margin software business. There are always other pockets of strength here and there, but from a sector perspective, the rest of the market is in the red with utilities and real estate lower due to higher Treasury yields. The banks are taking a breather after a strong, earnings-driven run this past week. Energy is weaker but our lone position Coterra Energy is up. Most of the sector’s losses are in the oil services companies after Halliburton reported an in-line quarter and guided for a “sequentially softer” North America in 2025. Industrials are soft, but companies tied to data centers and electrification and power generation like Eaton, GE Vernova, and Hubbell were higher. Some of that may be tied to Stargate’s ambitious investment plans. The electrification theme got an extra jolt from Amphenol, a company that specializes in electrical equipment, reporting strong fourth-quarter results thanks to strong AI-related demand. The company also guided its first-quarter results above consensus. Up next: After the closing bell Wednesday we’ll see quarterly reports from Kinder Morgan, Alcoa, and SL Green. Thursday before the opening bell is a busy one, with GE Aerospace, American Airlines, Freeport-McMoRan, Elevance Health, Union Pacific, McCormick, and many others scheduled to report. We’ll also hold our January Monthly Meeting at noon. (See here for a full list of the stocks in Jim Cramer’s Charitable Trust.) As a subscriber 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 trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, TOGETHER WITH OUR DISCLAIMER. NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
OpenAI CEO Sam Altman, accompanied by US President Donald Trump, Oracle CTO Larry Ellison (R), and SoftBank CEO Masayoshi Son (2nd-R), speaks during a news conference in the Roosevelt Room of the White House on January 21, 2025 in Washington, D.C.
Andrew Harnik | Getty Images
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.
