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. Rough ride: Stocks were off to a rocky start in the new year after giving back strong gains earlier in Thursday’s session. If the S & P 500 ‘s losses hold at the close, it would mark the fifth straight session of declines. Continued pressure from Treasury yields, with the 10-year almost touching 4.6% at one point Thursday might be the culprit behind the decline. The stock market ended 2024 with some downside but did not take away from the fact that it was still a great year, with the S & P 500 advancing 23%. Following a 24% gain in 2023, the index saw its first back-to-back years of 20%-plus increases since the 1990s. Sector dynamics: Only two S & P 500 sectors in the green Thursday: energy and utilities. Energy stocks have made a good move over the past week thanks to a rise in oil and natural gas prices. Coterra Energy , our only oil and gas name, was the third best-performing stock in the sector week to date, with a gain of more than 5%. Utilities were on the rise — and, like last year, Vistra and Constellation Energy led the charge. The sector move came after Constellation Energy announced that it was awarded more than $1 billion in combined contracts with the U.S. government to supply electricity and services. We expect the growing demand for energy infrastructure throughout the country to be a continued theme this year, especially since data centers that run artificial intelligence take so much power. On the other end, consumer discretionary, information technology, and materials underperformed Thursday. Consumer discretionary was led lower by a nearly 7% drop in Tesla after its fourth-quarter deliveries missed estimates. Other autos, casinos, and travel names were weaker, too. Club name Apple was the bottom performer among tech on concerns about demand after Reuters reported on iPhone promotions in China. We trimmed and rightsized our Apple position last week. Materials stocks remained under pressure. This is the worst sector in the market over the past three and 12 months due to economic uncertainty and concerns about China. Chemical stocks like Eastman Chemical and PPG Industries led to the downside. Tax Loss pops: One trend to look out for at the turn of the calendar is a quick rebound in stocks that had negative returns in the year before. The idea is these stocks had an extra overhang weighing on them in December, but that’s now over with the start of the new year. Investors sold these laggards not for fundamental reasons but to harvest tax losses to offset realized gains made on other investments throughout the year. They usually wait at least 30 days to buy those underperforming shares back to avoid triggering a “wash sale rule.” This might explain Thursday’s roughly 7% move in Club name Nextracker and strength in other solar stocks like Enphase Energy , which was one of the bottom five performers in the S & P 500 in 2024. Up next: It’s quiet on the earnings front for the rest of the week. On the data side, the economic data release to watch is the December ISM manufacturing report — out at 10 a.m. ET on Friday. (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.
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.
