Honeywell’s Aerospace spin is approaching a milestone. Also, a new stock supply problem
Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch – an afternoon update that can work, during the last hour of trading on Wall Street. The S&P 500 was initially on track to snap its eight-session winning streak in the first hour of trading on Tuesday, but stocks held a small rally that sent both the S&P 500 and the Nasdaq to close at record highs. We’ll see if that continues in the last few hours of trading. As of 2:30 pm ET, both indicators are moving along a flat line. A big theme in Tuesday’s market: Several Magnificent 7 names came under pressure following Alphabet’s announcement of $80 billion in equity to support its AI investment plans. Alphabet shares were down about 3% in trading but above their worst levels of the session. How the market reacts to the new offerings from Alphabet’s fundraising will be a key test ahead of several IPOs expected later this year, including those of SpaceX, Anthropic, and OpenAI. Jim Cramer has warned several times throughout the years that a wave of large IPOs could damage the market rally. The idea is that fund managers will have to sell stocks to make room for new “commodities”. Or can crypto be a source of funds? We have no opinion on that asset class, but it is interesting to see Bitcoin fall by 5% on Tuesday and drop below $70,000 per coin. For the year, bitcoin has fallen by more than 20%. In any case, to get ahead of this perceived threat of indiscriminate sales in support of IPOs, we booked three-digit gains on Tuesday in three positions in the portfolio: Broadcom , Corning , and Wells Fargo. The first trade involved Broadcom, followed later in the day by Corning and Wells trim. After the closing bell, Palo Alto Networks and Ulta Beauty reported earnings. Before the opening bell on Wednesday, we’ll see gains from Medtronic, Ollie’s Bargain Outlet, and Macy’s. Later in the day, we’ll be listening to Honeywell Aerospace’s investor day. The event is one important step before the business splits from parent Honeywell at the end of the month. The remaining Honeywell will retain its Automation division and be known as Honeywell Technologies. We have been waiting for this turn for a long time. At Honeywell Aerospace’s investor day, Barclays analysts wrote last week that they expect management to re-estimate the combined organic compound growth rate of the mid-year digit they provided for the 2025 Paris Airshow. Barclays also expects the company to report 50 basis points of annualized growth and 10%-plus earnings per share growth. On the data side, there is the ADP National Employment Report, the Institute for Supply Management services index; the S & P Global US index of purchasing managers; and the Census Bureau looks at factory orders and durable goods. (See here for a full list of stocks from 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 stock in his charity portfolio. When Jim talks about a stock on CNBC TV, he waits 72 hours after issuing a trade warning before making a trade. THE PRIVATE INFORMATION OF THE BURNING CLUB IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, AND OUR PRIVACY POLICY. NO LEGAL LIABILITY OR OBLIGATION EXISTS, OR IS CREATED, BY YOUR ACCEPTANCE OF ANY INFORMATION PROVIDED BY CONTACTING THE INVESTMENT CLUB. NO PARTICULAR RESULT OR INTEREST IS GUARANTEED.
