Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch — an actionable afternoon update, just in time for the last hour of trading on Wall Street. Bonds in the driver’s seat: Stocks are taking a breather Monday. A pullback this week would end the S & P 500 ‘s 6-week winning streak, its longest of the year. Up against the market was another big sell-off in Treasuries, with the yield on the 10-year rising roughly 10 basis points to 4.17%. The 10-year yield hasn’t been this high since July. Long-term rates have steadily increased since the Federal Reserve cut short-term borrowing rates by 50 basis points at its September meeting. So far, the money managers that bet Treasury prices would come down and yields would rise have been right. Cyber : Cybersecurity stocks are holding their own in an otherwise rocky tape. The group is reacting to Morgan Stanley’s upbeat note on the industry. The analyst is bullish on network security stocks on the thesis of strong firewall refresh activity in the second half of 2025 and 2026 based on a four-to-five year replacement cycle, rising network traffic, and record levels of threat activity. Supporting this view is a recent Value-Added Reseller (VAR) and Chief Investment Officer survey by the analyst that showed network security as the top spending priority over the next twelve months. The analyst raised its price target on Palo Alto Networks to $446 (a new Street high) from $421, Check Point Software to $183 from $170, and Fortinet to $105 from $69 while naming it a top pick. There was no action on recent portfolio addition CrowdStrike because the note’s focus was on network security. CrowdStrike specializes in endpoint security. Broadly speaking, network security uses firewalls to protect corporate network assets while endpoint security focuses on protecting devices like laptops, desktops, smartphones, and IoT devices that connect to corporate networks. Palo Alto is one of Morgan Stanley’s favorite names in the sector “given traction with larger platform deals, ramping product cycles (Cortex, AI Security) and AI-enabled efficiencies driving upside to margins over time.” The analyst pointed out that its third quarter checks “were strongest” and they see “modest upside to product revenue estimates” from the refresh. The Morgan Stanley note reinforces our decision to own both Palo Alto Networks and CrowdStrike. With Palo Alto Networks, it’s a couple of quarters away from the beginning of a product refresh cycle. Plus, its “platformization” strategy (bundling services) is driving more large deals. Meanwhile, CrowdStrike is still about 11% from its pre-outage level despite maintaining its market leadership. Up next: After the closing bell Monday we’ll see earnings from Nucor , Logitech , and Zions Bancorp . Tuesday is a huge day of earnings with Danaher , GE Aerospace , RTX , Lockheed Martin , Verizon , GM , 3M , and a handful of others set to report. For Danaher, we want to see continued progress in the bioprocessing market recovery and the company affirm its expectation that revenue will grow at a high single-digit rate or better exiting 2024. (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.
Arora Nikesh, Palo Alto Networks CEO & Chairman at the WEF in Davos, Switzerland on May 23rd, 2022.
Adam Galica | CNBC
Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch — an actionable afternoon update, just in time for the last hour of trading on Wall Street.
