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Market Insights: Wall Street Faces Continued Pressures
Every weekday, the CNBC Investing Club with Jim Cramer hosts a “Morning Meeting” livestream at 10:20 a.m. ET. Here’s a summary of the significant events from Tuesday’s session.
Wall Street faced considerable pressure on Tuesday. Should the Dow close in the red, it would mark its first nine-day losing streak since 1978, a time when Jimmy Carter was the U.S. president. During the Morning Meeting, Jim emphasized the need for a market “crescendo,” where persistent declines are eventually followed by a surge in trading volume. “That’s how you get a clearing event to go back up. We have not had that crescendo yet,” he remarked.
It is important to remember that the Dow is a price-weighted index. The substantial decline of UnitedHealth, following the tragic killing of its insurance unit’s CEO in New York City, could significantly impact the index due to its high stock price. Furthermore, there has been a noticeable rotation back into the “Magnificent Seven” tech stocks, contributing to the Nasdaq’s record-high close on Monday.
On the commodity front, U.S. oil benchmark West Texas Intermediate crude prices plummeted below $70 per barrel amid growing concerns over demand. Peter Navarro, who is expected to become Donald Trump’s top trade advisor, suggested a “drill baby drill” approach that could further decrease oil prices. He mentioned that inflation resulting from proposed tariffs could be counterbalanced by a WTI price of $50 per barrel, which would subsequently lower gasoline costs. Jim noted that Navarro would need the cooperation of the oil companies, as major energy firms have shown hesitance to increase supply at the risk of further price declines.
In line with their strategy, the club proceeded to reduce their holdings in Broadcom after restrictions lifted, capitalizing on profits from the recent drop of over 4% in the custom chipmaker’s stock. “We don’t like to do nothing when we see parabolic rallies,” Jim stated. He also addressed the complexities surrounding Advanced Micro Devices. After a discussion with Marvell CEO Matt Murphy on “Mad Money” the previous evening, Jim noted that leading tech companies are leaning towards Nvidia’s AI processors and custom chips from Broadcom and Marvell, leaving AMD in a challenging position in this competitive landscape.
Jim also discussed the recent downturn in Nvidia’s stock, which had dropped nearly 14% from its peak on November 21, when it reached an intraday high of $152.89 per share. He observed, “Nvidia has spurts. It does nothing and then it has spurts.” Despite the volatility, the club chose not to trim their Nvidia position, asserting confidence in the company’s future potential.
During the rapid-fire segment at the end of Tuesday’s meeting, Jim covered various stocks including Pfizer, Brown-Forman, Cisco Systems, Planet Fitness, Dell, and Arista Networks.
(For full disclosures, Jim Cramer’s Charitable Trust is long AVGO, AMD, and NVDA.)
As part of the CNBC Investing Club with Jim Cramer, members receive trade alerts prior to Jim executing trades. He waits 45 minutes post-alert to act on any stock trades related to his charitable trust’s investments, and for stocks discussed on CNBC TV, there is a 72-hour waiting period following the trade alert.
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