4 takeaways from the Investment Club’s ‘Morning Meeting’ on Wednesday
Every weekday the CNBC Investment Club with Jim Cramer hosts a “Morning Meeting” live stream at 10:20 a.m. ET. Here’s a recap of Wednesday’s key moments: We’re cautiously watching bond yields Manic Meme could be a sign of frost on the Nasdaq We’ve cut two stocks club: DHR, LIN Costco still best retail stocks % on Wednesday, marking the highest level since the recent stock market bottom in mid-June. The yield on the 10-year Treasury note is more than 2.9%. Higher bond yields, which go against bond prices, tend to hurt growth stocks, many of which are tech names. When yields spiked earlier this year, the stock certainly paid off. That’s because higher yields and interest rates make the promise of future income less valuable, and they also make it more expensive to borrow to fuel growth. In March, we explored the ways that ratios affect equity valuation. The tech-heavy Nasdaq was the big loser on Wednesday, down about 1.3%. The S&P 500 and the Dow Jones Industrial Average are both down less than 1%, respectively. We are being cautious and watching bond yields carefully for any signs that the stock market could weaken again. Since its mid-June low, the S&P 500 index – even with Wednesday’s drop – is up 17%. However, this index is still down more than 10% compared to the same period last year. 2. Manic meme could signal a rise in Nasdaq Regardless of which exchanges these stocks trade on, the frenzy around them tends to hurt the Nasdaq. Shares of Bed Bath & Beyond (BBBY) were up about 20% on Wednesday, the day after closing up 29%. Driven by traders on Reddit, the stock at one point Tuesday was over 70% higher and has gained nearly 300% since Aug. 4. AMTD Digital (HKD), a fintech company headquartered based in Hong Kong, has skyrocketed in early August, with the stock up 2,300% since its IPO price of $7.80 last month. At around $189 per share on Wednesday, however, AMTD Digital was trading as high as $2,555.30 on Aug. 2. That’s a whopping 32.656% above July’s asking price. The recent explosive performance in meme stocks is reminiscent of the meme stock craze of 2021, which saw GameStop (GME) stock push to a high as traders on Reddit’s WallStreetBets forum flocked into stocks and squeeze out short-selling hedge funds. Like what happened then, we’re concerned that the Nasdaq could take a hit as the meme stock craze peaks. Nasdaq is volatile and will likely see some declines, which could affect Club names such as Apple (AAPL) and Amazon (AMZN), both of which remain major players. big stocks. Jim Cramer warned investors on Tuesday “Mad Money” to swap speculative games, including meme stocks, for boring, stable games, and we’re repeating our words. that advice to Club members. 3. We cut two Club shares: DHR, LIN While our position on Danaher (DHR) remains unchanged, we have sold a number of shares following our recent trading. stocks simply because we have a large position in stocks and are looking to tighten up our portfolio. We have also removed some stocks from our Linde (LIN) position. While it has had a good run over the past few weeks, we remain vigilant about how a worse economic outlook in Europe could harm the company. Jim says that if the name of the Club sees a drop in the market, perhaps 1% to 3%, he will consider redeploying the funds raised from these sales. 4. Costco Still Best Retail Stock The retail giants are continuing to report earnings this week, with Lowe’s (LOW) seeing a mixed quarter while Target (TGT) missed expectations. of Wall Street in earnings. We still recommend investors to buy Costco stock (COST) if they want a good retail stock, although Jim also thinks Lowe’s and Home Depot (HD) have good prospects. Costco did not report supply chain and inventory challenges, and had a successful pricing strategy, enhancing our confidence in the company and its ability to continue through the economic difficulties. . (Jim Cramer’s philanthropic foundation long AAPL, AMZN, COST, DHR, LIN. See here for a full list of stocks.) As a subscriber to the CNBC Investment Club with Jim Cramer, you’ll receive Trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trading alert before buying or selling shares in his charity portfolio. If Jim had talked about a stock on CNBC TV, he would have waited 72 hours after issuing a trading warning before taking a trade. THE ONLY INVESTMENT CLUB INFORMATION IS FOLLOWING OUR TERMS AND CONDITIONS AND PRIVACY POLICY, WITH OUR DISCLAIMER. NO OBLIGATION OR DUTY ALSO EXISTS OR WAS CREATED BY VIRTUE WHEN YOU RECEIVE ANY INFORMATION PROVIDED BY CONNECTING TO THE INVESTMENT CLUB. NO GUARANTEES SOME OUTCS OR SPECIFIC PROFITS.
