Every weekday, Jim Cramer’s CNBC Investment Club releases the Homestretch, a practical afternoon update to coincide with the last hour of trading on Wall Street. Markets: There was an ugly reversal in the markets on Thursday. Shares rose for much of the morning on Nvidia’s strong quarter, bullish outlook for AI spending and a backlash that customers weren’t getting enough return on their investments. Nvidia stock rose to $196 on Thursday, up about 5%, and its gravitational pull helped lift other technology and AI-related industrial stocks. The S&P 500 moved into positive territory this week as the market rose. However, around 11 a.m. ET, the market began to decline rapidly, with technology and industry names leading the decline. Nvidia gave up all its gains and fell 2%. Bitcoin hit its lowest price since late April. However, notable defensive stocks such as consumer staples continued to rise. This resilience reinforces our decision to further diversify by adding Procter & Gamble to our portfolio earlier this week. The decline in the S&P 500 has pushed the index back toward the lows of the recent downturn, leaving it about 5% off its high. It remains to be seen whether Thursday’s reversal signals investors continuing to retreat from risky assets, or simply a retread of the recent downdraft. However, NVIDIA’s earnings report showed no signs of slowing down in demand for AI computing. Rate Cuts: Expectations for a 25 basis point rate cut at the next Federal Open Market Committee meeting in December remain volatile. A month ago, a rate cut seemed like a 98.8% certainty, according to the CME FedWatch Tool. But that probability dropped to about 50% a week ago after a series of hawkish comments from Federal Reserve members. On Wednesday, the probability of a rate cut plummeted to 30% following the release of October Fed minutes showing the Fed is hesitant to cut rates again this year. But when the long-delayed September jobs report was finally released on Thursday, the probability of a 25 basis point (bp) cut jumped to 40%. Economic growth in September added 119,000 jobs, more than twice as much as expected, but the unemployment rate rose further. The Fed is struggling to balance a weakening labor market with the risk that cutting interest rates could reignite inflation. Next up, Gap, Ross Stores, Intuit and Veeva Systems will report after the closing bell. BJ’s Wholesale Club will announce results on Friday morning. As for economic indicators, tomorrow will be the release of the S&P Manufacturing and Services Global PMI and the University of Michigan Consumer Sentiment Survey for November. (See here for a complete list of Jim Cramer Charitable Trust stocks.) As a subscriber to Jim Cramer’s CNBC Investment Club, you will receive trade alerts before Jim makes a trade. After Jim sends a trade alert, he waits 45 minutes before buying or selling stocks in his charitable trust’s portfolio. If Jim talks about a stock on CNBC TV, he will issue a trade alert and then wait 72 hours before executing the trade. The above investment club information is subject to our Terms of Use and Privacy Policy, along with our disclaimer. No fiduciary duties or obligations exist or arise from your receipt of information provided in connection with the Investment Club. No specific results or benefits are guaranteed.
