Every weekday, Jim Cramer’s CNBC Investing Club releases Homestretch (an actionable afternoon update) in time for the final hour of Wall Street’s close. Market Action: Stocks were mixed on Monday, as funds continued to flow out of the high price-to-earnings multiples of several technology stocks that have outperformed this year and into cyclical sectors of the market, such as energy, financials and capital goods. It’s no wonder the Dow Jones Industrial Average rose on Monday, while the S&P 500 and Nasdaq fell. For example, club-named Nvidia, the company at the center of the rally in artificial intelligence stocks, has fallen rapidly, about 12% since hitting a high of $135.58 closing last Tuesday. It’s worth noting that Nvidia has historically been prone to occasional volatility. Conversely, the energy and utilities sectors, the two worst-performing groups in June, rose. The oil rally certainly helped boost Kotera Energy, the only energy stock that rose nearly 4% on Monday. What’s next for tech stocks: These rotations, which recently saw the Nasdaq lead and the Dow lagging, tend to last for a few sessions, so it’s hard to predict when and where these popular tech stocks will stabilize. But what could turn the tide is a positive data point on industry spending coming out when Micron reports earnings later this week. “People are dissecting some of the tech that’s doing well and the non-Apple members of the Mag7. I think it’s going to be hard to stop this move until we hear from Micron on Wednesday about actual demand and supply. I think demand is going to remain strong,” Jim Cramer said Monday. Don’t chase: Still, the rapid declines of some of these AI stocks that have rallied significantly over the past month are another reminder of why investors should be hesitant to chase sharp moves. That discipline is one of the reasons Broadcom shares fell last week after soaring after the company released earnings.Ultimately, he put about half of the cash from the sale into Dover, an industrial company that could benefit as an AI secondary stock. Dover makes products for data centers, which are being upgraded and built at a rapid clip to handle AI workloads. Record Rise: As money flowed into other parts of the market, non-tech stocks such as consumer goods giant Procter & Gamble and discounter TJX Companies hit all-time highs on Monday. Industrial conglomerate Honeywell hit its highest price since late 2022. “Procter & Gamble may have the best consumer goods profile and has barely risen relative to the group as a whole. I think there’s still room to go,” Cramer said. Up next: No earnings report after Monday’s close. Cruise line Carnival will report earnings before the open of Tuesday’s session, and the Conference Board’s consumer confidence survey will be released later in the morning. (For a complete list of Jim Cramer’s Charitable Trust stocks, go here.) Subscribers to Jim Cramer’s CNBC Investment Club receive trade alerts before Jim makes the trade. Jim buys and sells shares in the Charitable Trust’s portfolio 45 minutes after he sends out a trade alert. If Jim talks about a stock on CNBC television, he will execute the trade 72 hours after issuing the trade alert. The above Investment Club information is subject to our Terms of Use and Privacy Policy and Disclaimer. Receipt of any information provided in connection with the Investment Club does not create any fiduciary duty or liability. No specific results or benefits are guaranteed.
Every weekday, CNBC Investing Club with Jim Cramer releases Homestretch, an actionable afternoon update, just in time for the final hour of trading on Wall Street.
