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. Muted Monday: Wall Street is having a relatively quiet session to wrap up a volatile, yet positive September and a strong third quarter. Federal Reserve Chair Jerome Powell spoke at the National Association for Business Economics conference in Nashville and fielded questions about his monetary policy outlook. Less than two weeks after the central bank kicked off its rate-cutting cycle by a half-percentage point, Powell indicated additional reductions would be ahead if the “economy evolves broadly as expected.” But, he cautioned, the Fed is “not on any preset course.” He later added that “this is not a committee that feels like it’s in a hurry to cut rates.” This last line caused the S & P 500 to trade at its lows of the day, as market probabilities for the Fed’s November meeting shifted to a traditional quarter-point cut from another 50 basis point move, according to the CME Group’s FedWatch tool . Ultimately, the Fed’s next move will depend on how the data evolves. Don’t overlook Disney : Shares of Club name Disney have quietly put together a solid September, up about 6% in the month. This comes after the stock spent most of August trading in the mid-$80s. Shares broke down on Aug. 7, falling more than 4% to $85.96 after a disappointing reaction to a good quarter . The entertainment giant beat estimates on revenue and delivered a sizeable bottom-line beat, thanks in part to its first profitable quarter from its streaming business. Nevertheless, the stock sold off on concerns about a moderation in spending at its theme parks . Since the quarter, the stock has rallied as the market has become more comfortable with Disney’s outlook, expecting that sluggish trends for its experiences business could reverse if multiple Fed rate cuts take some pressure off the consumer. Indeed, an improving macroeconomic outlook — coupled with emerging profitability at streaming — was the basis of Seaport Research Partner’s upgrade of Disney on Monday. The analysts now rate the stock a buy, up from neutral, with a price target of $108 a share. “While we have tangibly soft Parks data, it is likely temporary, and emergent DTC profitability is getting the benefit of the doubt, with recent price increases and paid sharing announcements possibly supporting further [average revenue per user] and sub growth,” Seaport told clients. Disney’s market valuation is heavily tied to the health of its experiences business, so we agree that an improving economic outlook should help boost the stock. The question is how long this normalization from a post-pandemic boom will last? In the meantime, we are encouraged by the progress Disney has made to make its streaming unit profitable and its recent box office success. Energy woes : The S & P 500 energy sector is on pace to finish the third quarter as the only sector in the red, down more than 3%. For the year, the energy sector is up about 5%, easily the worst-performing group. There have been a few winners in the oil-and-gas group, but for the most part, the independent exploration-and-production companies have been a big disappointment. Fortunately, we’ve only had one small energy position in Coterra Energy , a disciplined driller that balances oil and natural gas production based on commodity prices. At 2.15% of Jim Cramer’s Charitable Trust, our energy exposure is less than the 3.5% energy weighting of the S & P 500, as of Aug. 30, and we have correctly held off from averaging down since our last buy in late May at $27.50. But natural gas is now finally starting to move — tracking for its best month since July 2022 and trading at its highest levels since late June, when Coterra traded around just below $27 per share. Against that backdrop, we see value in Coterra shares trading at almost $24 with a 3.5% dividend yield and are debating adding to our position. Up next: Before the open Tuesday we’ll see earnings from payroll processor Paychex and spice maker McCormick . On the economic data side, there is the so-called JOLTS report, which measures job openings and serves as a good measure of tightness in the labor market. We’ll also see the September ISM manufacturing index, which could impact how the industrials trade. (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.
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