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. Markets : Stocks are rallying Tuesday after a nearly 1% drop in the S & P 500 in the prior session. A reversal of two recent trends are helping lift the market. First is the drop in the price of oil. Over the past week, we’ve seen the broader market sell-off when oil spiked on Middle East tensions. The opposite is happening Tuesday, although the market came off its highs of the session and oil moved well off its lows around 1 p.m. ET. Second, money is coming out of China-related stocks on some disappointment around stimulus . Those dollars are rotating out of China tech names such as Alibaba and moving into the U.S. tech giants. All of the “Magnificent Seven” stocks were higher Tuesday despite a handful of recent analyst downgrades, including one of Microsoft . Cyber play shines : One of the leaders in the S & P 500 is Palo Alto Networks . The Club stock is up nearly 5% after Goldman Sachs put a new Street high price target of $425 a share on the cybersecurity provider. Usually, we would say a stock this much on no real news justifies some profit-taking, but we don’t see a need to make a move in Palo Alto this time around. Our last trim of the stock was around this level in late August, and we have plenty of cash on hand already. Picking some spots : In fact, that cash position swelled to about 11% earlier Tuesday following our exit of Procter & Gamble . Our high cash position isn’t necessarily based on a bearish market view. Rather, we’re actively looking for opportunities to redeploy some of those funds. A couple ideas for our cash are Honeywell International and Constellation Brands . The issue is we’re restricted from trading both stocks because Jim Cramer has mentioned them on CNBC TV over the past 72 hours. We don’t think Honeywell is getting enough credit for the materials spin-off it announced Tuesday . The remaining Honeywell should fetch a higher multiple in the market because it’s shedding slower-growing businesses with more cyclicality. And the soon-to-be standalone company should benefit from a simplified strategy and dedicated capital allocation priorities. That’s why upgraded our Honeywell rating to 1. As for Constellation Brands, the Corona brewer’s stock has been overly since reporting quarterly results Thursday morning. Although we share some concerns about Constellation’s topline beer growth, increased marketing investments and a dip in the Hispanic unemployment rate could boost sales in the months ahead. Plus, Constellation Brands is trading at a big discount to its historical average. We’re also looking outside the portfolio for new names. Up next: There are major earnings Tuesday night. The only company on our radar reporting Wednesday is Helen of Troy , which owns a collection of consumer bands including Oxo, Revlon and Hydro Flask. On the data side, minutes from the Federal Reserve’s September policy meeting are set to be released at 2 p.m. ET. The release could provide some insight into how the central bank committee is thinking about rate cuts by year-end, but we always caution around reading too much into minutes because it’s backward-looking information. Chair Jerome Powell has made it clear that future policy decisions will be determined by data. (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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