Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch – an actionable afternoon update, just in time for the final hour of Wall Street trading. Market Update: Stocks are rising with the S&P 500 hitting an all-time high. The gains widen the broad market index’s trailing CPI run to more than 4%. A drop in the 10-year Treasury yield has been a catalyst for stocks over the past week. However, rates are slightly higher on Wednesday with the 10-year recovering 4.6%. The dollar hit a new two-week low, but the impact of the unfavorable exchange rate on earnings from multinational companies was more visible on Wednesday. Here are some examples: Johnson & Johnson’s estimated unfavorable currency will impact 2025 sales by $1.7 billion, or 2%; Procter & Gamble said its guidance for fiscal 2025 now includes a $300 million after-tax ($0.20 per share) hit from unfavorable FX. He previously predicted a neutral impact; and mentioned that Abbott Lab’s quarter would look 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 rose 10.1% in the fourth quarter, and the company expects growth of 7.5% to 8.5% in 2025. Sector Summary: Technology and Commerce AI is the big story of the day as 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 is not slowing down and remains a multi-year journey. The communications services sector has grown well and this is mainly due to Netflix, although Meta and Alphabet are also higher. Consumer discretionary is slightly positive thanks to Amazon, but the biggest gainer in that group is auto supplier Aptiv, which announced a plan to separate its electric 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. Banks are taking a breather after a strong earnings-driven run last week. Energy is weaker, but our only Coterra Energy position is up. Most of the sector’s losses are in oil services companies as Halliburton reported an in-line quarter and guided for a “softer” North America in 2025. Industrials are soft, but companies related to data centers and electrification and power generation such as Eaton. GE Vernova and Hubbell were higher. Some of these may be related to Stargate’s ambitious investment plans. The electrification theme received an additional jolt from Amphenol, a company specializing 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 on Wednesday, we’ll see quarterly reports from Kinder Morgan, Alcoa and SL Green. The Thursday before the opening bell is busy, with GE Aerospace, American Airlines, Freeport-McMoRan, Elevance Health, Union Pacific, McCormick and many more scheduled to report. We will also be holding our monthly January meeting at noon. (See here for a complete list of holdings in Jim Cramer’s Charitable Foundation.) As a subscriber to the CNBC Investing Club with Jim Cramer, you’ll receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a share in his charitable trust portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after the trade alert is issued before executing the trade. INFORMATION ON MESIPERM INVESTMENT CLUB IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, INCLUDING OUR STATEMENT. NO OBLIGATION OR FIDUCIARY DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR ACCEPTANCE OF ANY INFORMATION PROVIDED IN CONNECTION WITH INVESTOR CLUB. NO SPECIFIC RESULTS OR PROFITS ARE GUARANTEED.
OpenAI CEO Sam Altman, accompanied by US President Donald Trump, Oracle CTO Larry Ellison (R) and SoftBank CEO Masayoshi Son (2-R), speaks during a press conference in the Roosevelt Room of the White House on 21 January 2025 in Washington, DC.
Andrew Harnick | Getty Images
Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch – an actionable afternoon update, just in time for the final hour of Wall Street trading.