The Homestretch, released by the CNBC Investing Club with Jim Cramer, provides an actionable afternoon update on weekdays, just before the last hour of trading on Wall Street. The S&P 500 fell throughout Tuesday afternoon, primarily due to the decline in mega-cap tech stocks. Investors were preparing for the post-Fed meeting news conference where Federal Reserve chief Jerome Powell was expected to signal upcoming interest rate cuts. Stocks of companies that don’t necessarily need lower rates to beat expectations were being sold off, while those that would benefit from a lower-rate environment were being favored. Nvidia, a Club holding, dropped 5% despite not needing rate cuts for demand, while Stanley Black & Decker rose more than 9% due to expectations of increased sales if lower mortgage rates reignite home repairs.
Among the market trends, large-cap banks were shining as Morgan Stanley analyst Betsy Graseck upgraded her view on them to “attractive” back in January. She upgraded Citi, Goldman Sachs, and Bank of America to a buy-equivalent overweight, leading to successful calls. Graseck raised price targets on nearly every bank in her coverage after second-quarter earnings, predicting a rebound in capital markets, higher buybacks next year, and an uptick in net interest income for some banks. Graseck also believes that lower expected credit losses could lead to a bullish case for banks in the long term. The upcoming earnings reports include Club names Microsoft, Advanced Micro Devices, and Starbucks, along with other notable companies.
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Overall, the market dynamics are influenced by factors such as interest rate cuts, earnings reports, analyst upgrades, and investor sentiment. Investors are focusing on companies expected to benefit from a lower-rate environment, while large-cap banks are gaining attention for their potential performance based on second-quarter earnings and future prospects. Earnings reports from companies such as Microsoft, Advanced Micro Devices, and Starbucks are highly anticipated, along with several other notable names. Subscribers to the CNBC Investing Club with Jim Cramer receive trade alerts before Jim executes trades, following specific guidelines to ensure transparency and accountability in the trading process.
