The CNBC Investing Club with Jim Cramer provides an afternoon update, the Homestretch, every weekday. This update is designed to help investors make informed decisions during the last hour of trading on Wall Street.
April has come to an end on a sour note for the stock market. The Dow Jones Industrial Average, S&P 500, and Nasdaq all posted losses Tuesday, breaking a five-month winning streak. The declines were attributed to a combination of factors, including rising bond yields, concerns about inflation, and a lackluster earnings report from GE Healthcare.
GE Healthcare shares tumbled 13% after the company reported lower-than-expected earnings and revenue. The Club had previously recommended buying GE Healthcare, but admitted to taking some profits when the stock price reached $90 last month. Despite the recent decline, the Club upgraded GE Healthcare back to a buy-equivalent rating, citing the company’s strong full-year guidance.
Another Club name, Constellation Brands, fell more than 2.5% on Tuesday due to comments from Molson Coors about a weak April for the beer industry. However, the Club believes that Constellation’s beer portfolio, which includes Modelo and Corona, has not seen any significant slowdown.
The Club also discussed earnings from Eli Lilly and Eaton. Eli Lilly shares rose 5.5% after the company provided strong guidance, while Eaton shares fell 2% despite beating quarterly estimates and raising guidance. The Club recommends that investors who don’t own Eaton buy the dip.
The Federal Reserve will announce its latest interest rate decision Wednesday afternoon, and Club members are encouraged to buy the dip in GE Healthcare and Eaton. The Club believes that the Fed will not cut interest rates anytime soon, and that the recent market declines provide an opportunity to buy quality stocks at a discount.
