Since the Club’s last monthly meeting in June, stocks have been performing well again. Stocks have been trading at new highs in the past few weeks as the Fed is likely to cut interest rates soon, following recent strong inflation readings. Traders now see a 100% chance of an interest rate cut by September, according to the CME FedWatch tool. The Dow Jones Industrial Average hit a new intraday high on Tuesday, while the S&P 500 hit the same intraday high on Monday. On July 11, the Nasdaq Composite Index also hit a new record high. Taking advantage of the overbought market, we executed a series of trades. The Club sold off shares of TJX Companies on Friday to raise additional capital. Prior to that, we sold Meta Platforms and Palo Alto Networks on July 8, securing significant gains of 150% and 94%, respectively, since we first purchased the companies. Meanwhile, we have been looking for opportunities when tech stocks are down. First, he started a small position in Advanced Micro Devices, which he held in the summer of 2023, and added to it on Tuesday. Throughout the portfolio’s overall movement, an important theme has emerged in the stock market, especially over the past week. Investors are jumping on the opportunity to get into sectors outside of Big Tech. The Russell 2000, which measures the performance of small U.S. stocks, has risen about 11% over the past five sessions. Meanwhile, the tech-heavy Nasdaq has fallen 0.18% over the period. To take one example, some of 2024’s biggest winners — large caps like Amazon, Alphabet, Meta and Microsoft — have lost money since the last meeting. Amazon is still up 27% this year, while Alphabet and Meta are up 31% and 38%, respectively. Other decliners include Wynn Resorts, Starbucks and Estee Lauder, which have strong ties to China. Overall, 12 of the portfolio’s 34 stocks have fallen. We believe the market rotation is also showing up in the top five performers. From the close of June 27 through Tuesday, only one mega-cap technology stock was up. Here are the top five and their respective drivers of growth. 1. Ford Motor: 17.7% No single factor drove Ford Motor’s strong performance. However, signs that sales are recovering seem to be improving investor sentiment. The company’s shares rose on July 3 after the company announced that hybrid vehicle sales surged 56% in the second quarter, setting a new quarterly sales record for the division. On July 11, shares surged again after the June Consumer Price Index (CPI) showed inflation easing, strengthening the case for the Fed to cut interest rates. This environment could lead to more consumers buying Ford vehicles. The stock hit a 52-week high of $14.43 per share on Monday. 2. Morgan Stanley: 10.9% Will Donald Trump’s second presidency benefit America’s biggest banks? Morgan Stanley investors seem to think so. Stocks rose after Presidents Joe Biden and Trump faced off in the June 27 presidential debate in what many saw as a major win for the former president. Morgan Stanley’s momentum continued in July, hitting an all-time high of $109.11 on Tuesday after the bank released a second-quarter report that beat expectations by a wide margin. Following the results, the firm raised its price target from $98 to $120 per share. 3. Stanley Black & Decker: 10.5% Stanley Black & Decker shares surged on signs of upcoming monetary policy easing that could help boost housing market activity due to lower borrowing costs. An increase in homeownership means more demand for DeWalt’s parent company’s products as buyers look for the tools they need to fix things around the house. This, combined with investors looking for pockets outside of big tech companies, has pushed the stock higher since July 1. The company’s shares rose 3.5% on Tuesday, with clubs taking advantage of the stock’s rise and trimming their positions in the afternoon. Indeed, some see long-term gains still to come if the Fed starts lowering rates. 4. Apple: 9.7% Apple hit a record high of $237.23 a share on Monday after Morgan Stanley named the stock its top industry pick. The Wall Street analyst said the company’s artificial intelligence efforts will bring a much-needed upgrade cycle to its flagship iPhone. Morgan Stanley raised its target price for Apple to $273 a share from $213, a rise of more than 16% from Tuesday’s closing price. The stock hasn’t been stagnant. The stock has been rising for months on hopes for Apple’s AI plans, which were just announced on June 10 at the company’s Worldwide Developers Conference. 5. Dover: 7.3% Dover began to rise on July 9, as money flowed into sectors that are likely to benefit from interest rate cuts. Dover is an industrial brand that makes thermal connectors used in data centers, one of the fastest-growing end markets. That makes Dover a great under-the-radar AI stock. “Dover is going to be a big name for me,” Jim said recently. The stock hit an all-time high of $190.54 a share on Tuesday and closed almost 3% higher. (For a complete list of Jim Cramer’s Charitable Trust stocks, see here.) Subscribers to Jim Cramer’s CNBC Investment Club receive trade alerts before Jim makes a trade. Jim buys and sells shares in the Charitable Trust’s portfolio 45 minutes after sending a trade alert. If Jim talks about a stock on CNBC television, he will execute the trade 72 hours after issuing a trade alert. The Investment Club information above is subject to our Terms of Use and Privacy Policy, as well as Disclaimer. Receipt of any information provided in connection with the Investment Club does not create any fiduciary duty or liability. No specific results or benefits are guaranteed.
Traders work on the floor of the New York Stock Exchange in New York City, USA, on June 12, 2024, as a screen shows Federal Reserve Chairman Jerome Powell’s press conference following the Fed’s interest rate announcement.
Brendan McDiarmid | Reuters
Since the club’s last monthly meeting in June, shares have been performing well again.
