Chip stocks rebound, and Goldman racks up a series of M&A wins
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CNBC Finance
4 min read
Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch â an actionable afternoon update, just in time for the last hour of trading on Wall Street. A market rally is finally holding on Monday, with the S & P 500 and Nasdaq on pace to snap a five-session losing streak. Most of the "Magnificent Seven" rebounded from last week's pullback, with Club names Amazon , Alphabet and Meta Platforms leading the charge. Microsoft and Apple , which we also own, are still struggling. The semiconductor group has had a volatile day but are trading higher in the afternoon, with Club stocks Arm Holdings , Intel and Broadcom shaking off earlier losses. Corning and Palo Alto Networks were the two biggest gainers in the portfolio. Both made new all-time highs in Monday's session. Other stocks making new intraday record highs include Eli Lilly , Johnson & Johnson and Cardinal Health . That continues a nice comeback for the once-unloved healthcare group. Several defensive stocks sat out the market rally, as TJX Companies , DuPont , Linde , Procter & Gamble , and Costco all traded lower. Also, Honeywell Technologies shares stumbled in its first day of trading since spinning off its aviation unit into Honeywell Aerospace . Conversely, Honeywell Aerospace was having a strong debut, up over 3% to over $228 a share. Shares of Club name Goldman Sachs ended last week on a sour note, thank in large part to reports that OpenAI could delay its initial public offering until next year. This week, however, has started off with another reminder that investment banking activity remains healthy. Announced before Monday's open, Goldman served as the exclusive financial advisor on Martin Marietta's $13.5 billion acquisition of Lhoist North America. It also provided fully committed debt financing for the deal. That's not all. Last week, Goldman was also the exclusive financial advisor to Minnesota-based Bio-Techne in its $11.3 billion sale to Germany's Merck KGaA . The bank also served as co-financial advisor to Arcosa on its $8.5 billion sale to CRH, which was announced on June 22 . Goldman has played a central role in many of this year's biggest transactions, including the lead left position on SpaceX's record-breaking IPO . That leadership in investment banking is exactly why we own the stock for the Club, and it has helped make Goldman one of our best-performing non-tech holdings this year. The stock was up about half a percent Monday. Also on Monday, fellow Club name Wells Fargo landed an advisory role and is contributing to short-term financing on Rocket Lab's acquisition of Iridium's satellite operations. That is another sign CEO Charlie Scharf's push to expand the bank's investment banking franchise is gaining traction. Nevertheless, Wells Fargo has had a much tougher year than Goldman Sachs. Shares are down about 10% year to date, making it the only large bank having a down year. We trimmed down our Wells Fargo position in early June because the company's last two quarters have disappointed, and we don't want as big of a position in case it makes it three in a row in July. The silver lining to two back-to-back soft quarters, though, is that it makes expectations low. Analysts at Morgan Stanley wrote Monday that Wells Fargo's underperformance this year means a Q2 beat on net interest income, or a raise to management's full-year outlook, would be positive. We'll know two weeks from Tuesday when Wells Fargo along with Goldman Sachs, JPMorgan , Bank of America , and Citigroup report their second quarter earnings. After the closing bell on Monday, the drone maker AeroVironment reports earnings. There are no major earning reports before the open on Tuesday. On the economic data side, there is the Conference Board's consumer confidence survey and the so-called JOLTS report, which will show the number of job openings and worker separations in the month of May. It is the first of three notable labor-market updates this week. The big one is Thursday's nonfarm payroll report for June. While normally a Friday morning release, the market is closed this Friday in observance of Independence Day. (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.
