Smaller market segments are getting their moment in the spotlight — and Costco keeps packing them
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. It was a strong day in the markets. AI and technology trading was under heavy pressure at the open following sharp post-earnings pullbacks in Club Broadcom and CrowdStrike stocks. We thought both quarters were strong, but each look wasn’t enough to keep their parabolic rallies going. Money did not leave the market; found other places. As technology suffered, health, financial, and telecommunications services had strong periods, supporting a major rally in the Dow Jones Industrial Average. During the session, investors realized that what happened to Broadcom and CrowdStrike was not a change in their long-term growth stories. Rather, it was a matter of hope over fundamentals. As expectations are restored and the market becomes more comfortable that these views have not changed, both stocks and the broader AI group have risen again from their previous declines, pushing the S & P 500 firmly into the green. Even the tech-heavy Nasdaq made it a good field. Costco delivered another strong month of sales. Comparable US sales rose 8.7% in May, reaching their highest levels in more than a year. The best showing in sales was driven by traffic growth of 3.7%, a strong pace from the trailing 12-month average of 2.8%. Costco has been the beneficiary of higher gas prices as shoppers flock to the member-only store to save 20 to 30 cents per gallon, which means big savings in this inflationary economy. It also attracts more store visitors, which naturally boosts sales. Club stock rose 2% for the week, giving back about half of Friday’s post-earnings gain. Benefits are easy throughout the week. Lululemon and DocuSign exited their positions after Thursday’s closing bell. While there are no major earnings reports ahead of the bell, get ready for business on Friday. The government’s employment report comes out at 8:30 am ET. The economy is expected to add 105,000 jobs in May, according to FactSet. It would mark the third consecutive month of gains. The country’s unemployment rate is expected to remain unchanged at 4.3%. (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.
