The CNBC Investing Club with Jim Cramer holds a “Morning Meeting” livestream every weekday at 10:20 a.m. ET to discuss key moments in the stock market. On Friday, stocks ticked higher in the final session of a strong week, with the S & P 500 and Nasdaq Composite looking to extend their six-day winning streaks. The recent performance has been fueled by encouraging economic releases, including cooler inflation reports and better-than-expected initial jobless claims. Despite some weak housing construction data released on Friday morning, the overall narrative for the week has been favorable economic data for the bulls.
The S & P Short Range Oscillator, a trusted momentum indicator, is not near overbought territory, indicating that the uptrend may have more legs. As a result, the Club downgraded Palo Alto Networks to a 2 rating, meaning they would wait for a pullback to buy more, due to the stock’s significant move higher since the recent market bottom on Aug. 2. Additionally, the stock has become a trading stock unable to break out toward its earlier highs from the year. Analyst commentary on Palo Alto Networks has been mixed ahead of the company’s earnings report on Monday night, with some firms raising their price targets while others expressing caution.
Bank of America downgraded Estee Lauder to a hold-equivalent rating from buy due to weaker-than-expected performance in China, a key market for the cosmetics maker. China’s slow economic recovery has been a significant drag on the company, prompting analysts to admit they were wrong in upgrading Estee Lauder earlier in the year. While suboptimal results are expected when Estee Lauder reports earnings on Monday, uncertainty around the stock’s pricing at these levels has prevented a complete exit from the position. The fact that Estee Lauder shares were only slightly lower after BofA’s downgrade indicates that it was not a surprising call.
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