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. (We’re no longer recording the audio, so we can get this new written feature to members as quickly as possible.) Fundamentals over Fed: Markets shrugged off the slightly warmer-than-expected February consumer price index report , which did not change Wall Street’s view of a possible Federal Reserve interest rate cut as early as June. If you had told us at this time Monday that CPI was going to be elevated and yields on the 2-year and 10-year Treasury notes would rise, we would have figured the market was due for another down day. Instead, investors shifted their focus back to earnings, which is the principal driver of stocks in the long run. Upbeat commentary Monday night from Oracle brought investors back into the Nvidia-led artificial intelligence, Nasdaq and momentum trade after a few days of rest. The tech-heavy Nasdaq jumped more than 1% Tuesday, while Nvidia added more than 5%. GE Healthcare updates: GE Healthcare CFO Jay Saccaro spoke at Oppenheimer’s annual Healthcare MedTech & Services conference. The conversation generally served as a reiteration of the investment case rather than offering the latest information on business trends. For example, Saccaro pointed out that China, which represents about 14% of GE Healthcare’s business, is an important market, but also is “not absolutely crucial.” The company’s business in China is expected to have a lopsided 2024, with growth concentrated in the back half of the year, following an uneven 2023. Last year, its revenue surged 20% organically in the first six months due to government stimulus measures before going through a rough patch in the second half due to Beijing’s anti-corporation campaigns in the health-care industry. Still, GE Healthcare is navigating China much more adeptly than its peers, creating a source of upside versus expectations over the past couple of quarters. From a business development point of view, Saccaro reiterated management’s focus on increasing investment in research and development while at the same time expanding margins, something the bears didn’t think was possible before GE Healthcare issued its 2024 outlook last month. The company’s focus on R & D and integrating AI into devices helped it have more AI-enabled technologies and platforms approved by U.S. regulators than its peers last year. This is a big deal because not only do these digital products help solve health problems more efficiently, but in some cases they also will carry a higher price point, which further helps the company’s broader price strategy. Lastly, we heard more ways the company is looking to reduce complexities and corporate costs in year two as standalone company. In terms of capital allocation, R & D and capital expenditures are the main priorities “because those are the most bankable” areas for driving a return on investment, Saccaro said. After that, management is focused on tuck-in acquisitions and improving the balance sheet. Saccaro expects GE Healthcare to commence stock buybacks at some point, but that’s still down the road. GE Healthcare shares fell about 1% Tuesday, but the move doesn’t seem tied to the presentation. The stock made a new all-time closing high Friday, at $93.87 per share. Later: It will be pretty quiet on the earnings radar over the next 24 hours. Two notable companies reporting Wednesday are Dollar Tree and Williams-Sonoma . There are no major economic data points until Thursday, when we get both February wholesale inflation data and retail sales. Housekeeping: As a reminder, every year Jim Cramer’s Charitable Trust, the portfolio we use at the Club, distributes all dividend income and realized capital gains to qualified, publicly supported charitable organizations. Our total contribution this year is $157,459, bringing our total donation since the Trust’s inception to approximately $4.3 million. We expect the make the contribution in the coming days, resulting in a reduction to our cash position as seen on our Portfolio page . (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. (We’re no longer recording the audio, so we can get this new written feature to members as quickly as possible.)
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