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 rally : Stocks are higher across the board Thursday, with the S & P 500 and Nasdaq 100 rallying and erasing their losses for August. The session marks the sixth straight positive session for the S & P 500, a move that started last week when initial jobless claims came in lower than expected and eased concerns of a quickly deteriorating labor market that had been sparked by the July jobs report. On Tuesday, we said if the market comeback was going to continue this week, it needed a cool consumer price index report Wednesday followed a day later by good retail sales and jobless claims data. With Thursday’s reports in hand, it was a clean sweep of better-than-expected numbers. We are back in a market where good news about the economy is good news for stocks. Elliott out : We don’t spend too much time going through hedge fund’s quarterly 13F filings because we prefer to do our own thinking, but we were disappointed to learn Elliott Management has dissolved its roughly 500,000-share stake in Club name Constellation Brands . A year ago, we were thrilled when Constellation announced it entered into a cooperation and information sharing agreement with Elliott, a well-respect activist firm known to push companies to make changes that benefit investors. But Constellation’s stock performance since then hasn’t panned out like we thought it would. Constellation’s shares are up about 1% this year — a far cry from the payback we’ve gotten since Elliott’s stake in Starbucks became public. To be fair, Constellation Brands has made great strides in improving its corporate governance and shown significantly more discipline on potential mergers and acquisitions.. However, the stock has not been credited for these positive changes. Earnings continue to grow, but the stock’s price-to-earnings multiple has compressed due to concerns about the growth in the beer industry and alcoholic beverages more broadly. We’re being patient here because the company is gaining market share and free cash flow will surge next year as capital expenditures fall, leading to a bigger share repurchase program — again, we like to do our own thinking. Still, we are disappointed to see Constellation lose the Elliott endorsement. Constellation did not immediately respond to CNBC’s request for comment on whether the cooperation agreement with Elliott has been terminated. Up next: The only major earnings report for the rest of the week is Applied Materials , the semiconductor capital equipment maker that can tell us a lot about the chip industry. As for economic data, we’re through all the major market-moving releases of the week, but Friday there are still housing starts, building permits, and University of Michigan consumer sentiment and inflation expectations survey. (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.
Read the full article here