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Wall Street managed to finish higher this week despite Thursday’s brutal rotation out of tech stocks. The Dow Jones Industrial Average was the big winner on the week — advancing nearly 1.6% as favorable inflation data prompted investors to scoop up economic- and rate-sensitive stocks that have not done as well this year. The S & P 500 and Nasdaq saw weekly gains of almost 1% and 0.25%, respectively. All three stock measures closed around record highs. It was pretty remarkable that the Nasdaq was able to finish in the green for the week given the tech-led selling Thursday that crushed the index nearly 2% on the session. Investors that day saw the cooler June consumer price index and the subsequent increase in the number of expected Federal Reserve interest cuts this year as reasons to take profits in Big Tech winners and broaden out their portfolios with stocks that would benefit from lower borrowing costs. Confirmation of the easing inflation seen in the CPI did not come Friday morning as the June producer price index was a bit hotter than expected. However, the PPI didn’t do much to upset the bulls, and market odds, according to the CME FedWatch tool , were still favoring as many as three Fed rate cuts this year. Three of our Club rate plays — solar panel company Nextracker , Stanley Black & Decker , and Ford — were our top-performing stocks for the week. Friday also ushered in the start of the second quarter earnings season. Club name Wells Fargo was among the big banks that reported. Despite beating on earnings per share and revenue, investors sold the stock over concerns about lower-than-expected net interest income for the quarter and an increase in the bank’s expense outlook for the year due in part to higher revenue from its fee-based businesses. We trimmed our Wells Fargo position July 5 on worries that a sell-the-news reaction to earnings could happen. Wells Fargo shares did indeed slide 6% post-earnings. However, we viewed the decline as an opportunity and upgraded the stock back to our buy-equivalent 1 rating. Earnings and the economy will also be drivers of the market in the week ahead. Economy June retail sales numbers are out Tuesday — providing insight into where consumers are targeting their buying power and how they feel about inflation. A decline of 0.2% month over month is expected. June housing starts and building permits come on Wednesday . Estimates call for starts to increase 4.2% month over month, with nearly 1.4 million permits issued. June industrial production and capacity utilization data is also out Wednesday . Industrial production is expected to rise 0.3% month over month. Capacity utilization is expected to edge higher to 78.4%. Earnings Club name Morgan Stanley reports second-quarter earnings before Tuesday’s opening bell. We expect to see continued momentum in investment banking revenue, with year-over-year increases in trading and fees. The swing factor may be in the wealth management business. Expect the market to scrutinize the amount of net new assets the business brought in during the quarter and the margins, which have been pressured by declines in sweep balances. Abbott Laboratories reports its second quarter before the bell Thursday . We expect the momentum from the first quarter to continue, though the strong U.S. dollar could be a pressure point due to Abbott’s heavy exposure to international sales. Our focus will be on its Libre device business and the details about the upcoming launch of two new products, Libre Rio and Lingo. Even though Abbott beat and raised its full-year outlook in the first quarter, the stock has drifted lower since the print and the fundamentals have taken a back seat due to baby formula litigation. We continue to believe this overhang will be much more manageable than what the market capitalization decline suggests. However, we recognize it will take time for investors to look past it. Monday, July 15 Before the bell: Goldman Sachs (GS), BlackRock (BLK) Tuesday, July 16 8:30 a.m. ET: Retail sales Before the bell: Morgan Stanley (MS), Bank of America (BAC), UnitedHealth (UNH), Progressive (PGR), Charles Schwab (SCHW), PNC Financial (PNC), State Street (STT) After the bell: Interactive Brokers (IBKR), JB Hunt (JBHT), Omnicom (OMC), Pinnacle Financial (PNFP) Wednesday, July 17 8:30 a.m. ET: Housing starts and building permits 9:15 a.m. ET: Industrial production and capacity utilization Before the bell: Johnson & Johnson (JNJ), Ally Financial (ALLY), U.S. Bancorp (USB), First Community (FCCO), First Horizon National (FHN), Northern Trust Corporation (NTRS), Citizens Financial (CFG) After the bell: United Airlines (UAL), Alcoa (AA), Discover (DFS), Kinder Morgan (KMI), Crown Castle (CCI), Steel Dynamics (STLD), SL Green Realty (SLG), Equifax (EFX) Thursday, July 18 8:30 a.m. ET: InitialjJobless claims Before the bell: Abbott Laboratories (ABT), Taiwan Semiconductor (TSM), Nokia (NOK), Cintas (CTAS), Domino’s Pizza (DPZ), D.R. Horton (DHI), Blackstone (BX), Infosys Technologies (INFY), KeyCorp (KEY), Marsh & McLennan Companies (MMC), M & T Bank Corp (MTB), Snap-On (SNA), Forestar Group (FOR), Novartis (NVS), Textron (TXT), ManpowerGroup (MAN) After the bell: Netflix (NFLX), Intuitive Surgical (ISRG), PPG Industries (PPG), AAR (AIR) Friday, July 19 Before the bell: American Express (AXP), SLB (SLB), Fifth Third Bancorp (FITB), Halliburton (HAL), Comerica (CMA), Travelers (TRV), Huntington Bancshares (HBAN), Regions Financial (RF) (See here for a full list of the stocks in Jim Cramer’s Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
Ted Pick, CEO Morgan Stanley, speaking on CNBC’s Squawk Box at the World Economic Forum Annual Meeting in Davos, Switzerland on Jan. 18th, 2024.
Adam Galici | CNBC
Wall Street managed to finish higher this week despite Thursday’s brutal rotation out of tech stocks.
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