Every weekday, CNBC Investing Club with Jim Cramer publishes the Homestretch – an actionable afternoon update, just in time for the final hour of trading on Wall Street. Mixed Markets: Stocks were higher Tuesday in what was a volatile session for the S&P 500. The market initially welcomed more moderate wholesale inflation data and reports of a potentially more measured approach to tariffs from President-elect Donald Trump. However, there were some doubts throughout the day. Although the colder-than-expected producer price index news was encouraging, the data was not seen as important enough to calm bonds. Wednesday’s release of the Consumer Price Index report will carry much more weight. Around 2 p.m. ET, the yield on the 10-year Treasury note was essentially flat that day, at around 4.797%. Customs tariffs continue to create some unease. Early on, stocks benefited from a Bloomberg News report that members of Trump’s new economic team were considering a slow increase in tariffs, preferring a monthly basis. The idea is that a phased approach will be better for trade negotiations. Advisors also don’t want to risk a spike in inflation. We know that Trump strongly believes in tariffs as a tool, but there is still debate about their ultimate size and scope. But after Trump posted on social media platform Truth Social about creating a “Foreign Revenue Service” to collect tariffs, taxes and revenue from foreign sources starting Jan. 20, the stock market has realized once again that the new president had serious tariff ambitions. AI Power Production Kicks Off: If there’s one theme that continues to work, it’s AI power and energy production. The group could come together after President Joe Biden issued an executive order aimed at boosting the construction of AI infrastructure. While it’s still possible that the new administration will reverse most of Biden’s last-minute orders, he may be more likely to stick given the consensus on the importance of leadership on AI. But we’ll see. Stocks like GE Vernova, Vistra, Constellation Energy and Vertiv outperformed the broader market. The Eaton club name is also higher. Perhaps Nextracker – which we first bought on the premise that more solar power was needed in the US to meet the power needs of AI factories – makes the case for being grouped into this band. Its shares were up Tuesday after falling in recent days. But we’re still not sure we trust solar stocks just yet, which is why we took advantage of Nextracker’s strength last week to lighten our position. Cutbacks at Meta: Instagram parent Meta Platforms’ “year of efficiency” may have started in 2023, but all signs point to a continued focus on managing the company’s expenses. The company plans to cut 5% of its workforce, focusing on its lowest-performing employees, CNBC has confirmed. In recent years, Meta has adopted a flatter organizational structure by removing several layers of management. The company’s adoption of AI in the workplace has also contributed to efficiency gains. Usually the market likes Meta to announce anything that suggests it is limiting spending, but the stock has been under pressure over the past couple of days. The decline comes despite the uncertain fate of TikTok, one of Meta’s biggest rivals in terms of content, user engagement and advertising dollars. Next up: There are no major profits after the closing bell on Tuesday. We’ll keep an eye out for many updates from the JPMorgan Healthcare conference, including a post-closing presentation from Eli Lilly CEO David Ricks. Jim Cramer called Lilly’s stock decline Tuesday a buying opportunity. Additionally, Jim also has the name of Abbott Laboratories CEO Robert Ford on “Mad Money.” The unofficial start of the fourth-quarter earnings season begins Wednesday, with several major banks kicking off. Wells Fargo, BlackRock, Goldman Sachs, JPMorgan Chase, Citigroup and Bank of NY Mellon are all expected to report. On the economic data side, we will see the December Consumer Price Index report. As mentioned, because it measures the prices paid by the consumer, the CPI ratio carries more weight than the PPI. (See here for a complete list of Jim Cramer’s Charitable Trust stocks.) As a subscriber to CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after a trade alert is sent before buying or selling a stock in his charity’s portfolio. If Jim talked about a stock on CNBC TV, he waits 72 hours after the trade alert is issued before executing the trade. THE ABOVE INVESTMENT CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, AS WELL AS OUR DISCLAIMER. NO OBLIGATION OR FIDUCIARY OBLIGATION EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTMENT CLUB. NO SPECIFIC RESULTS OR PROFITS ARE GUARANTEED.
Every weekday, CNBC Investing Club with Jim Cramer publishes the Homestretch – an actionable afternoon update, just in time for the final hour of trading on Wall Street.
