Every weekday the CNBC Investing Club with Jim Cramer releases the Homestretch audio feature in time for the last hour of trading on Wall Street. Here’s today’s edition. The S & P 500 is well off its lows from earlier but still down on the day as the market goes through this rotation. What’s happening right now is major profit-taking in this year’s leaders and mega cap tech darlings. Money is rotating out of the Magnificent 7 and slowing into small caps and lower quality companies with weak balance sheets that were beat up this year due to a tough macroeconomic backdrop. Investors are betting that if the Federal Reserve starts to loosen its monetary policy next year, the economic pressures that have hurt these stocks will ease. But chasing lower quality stocks is not a great long-term strategy. That’s why we look to buy high quality companies when they are put on sale. “Do not chase the bad, start looking at the good” Jim said. On the downside, Microsoft (MSFT), Meta Platforms (META), Alphabet (GOOGL), Palo Alto Networks (PANW) are falling. But some of these big names are coming off of their 52-week highs. On the upside, shares of Estee Lauder (EL) were trading 5.8% higher in last trading Monday. Jim called Estee Lauder a “quintessential blue chip that has been crush” but people are buying into it all of a sudden. Jim said the stock is acting like something is going on but that’s not a reason to buy. The company made a big bet in China’s travel retail which hasn’t recovered since post-covid. We like the rally in the stock but are just holding on for now. The same thing is happening with Foot Locker (FL). But the sneaker retailer didn’t cut guidance when it reported. We like their strong relationship with Nike and that they’re reducing their footprint in malls. Both of these consumer-focused companies dealing with too much inventory. Once that normalizes, there should be some relief. (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.
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