Jim Cramer discusses why the market is down and 3 stock moves

Every weekday, CNBC Investment Club with Jim Cramer publishes Homestretch—an actionable afternoon update just in time for the final hour of trading on Wall Street. Markets lower: Wall Street struggled to hold on to early gains and headed lower. We wouldn’t be surprised to see the market taking a breather after the last two weeks of gains and overbought levels. Technology stocks opened the session stronger but later fell as semiconductor stocks fell. We can’t find a specific catalyst for the decline—perhaps a disappointing quarter from Snowflake, or a slight increase in revenue from chip designer Synopsys. But there may be some profit-taking as some of these stocks have risen sharply since the yen carry trade broke out earlier this month. Question: “We’re starting to get into the meat of the Democratic platform, and it does appear that there are some villains, namely drug company pricing and supermarket fraud,” Jim Cramer said Thursday. “In fact, what’s important is that the banks haven’t been heavily criticized, which could explain some of the positive actions they’ve taken.” Thursday is the final night of the Democratic National Convention, where Vice President Kamala Harris will accept the Democratic nomination for president. . Medical Devices: “The medical device sector is doing better because no one is grabbing them. Abbott Laboratories is still doing well as part of the device trade.” Citi raised its target price on Abbott, calling it a darling in the medical device space. On Tuesday, we pared back slightly on concerns about the diabetes device maker’s response to Eli Lilly’s new study of obesity drug Zepbound. There are also legal unresolved issues due to specialized infant formula litigation. Home Transactions: “We have four months of inventory of unsold homes. I’ve always thought six months was the tipping point, but we’re not there yet, so there’s a lot of strength in the home builders,” Cramer said. “But given the weakness in furniture at Williams-Sonoma, I’m concerned about Best Buy.” Same-store sales at Williams-Sonoma were disappointing, following disappointing sales at HomeGoods at TJX, the club’s name, and The Home Depot Sales were also sluggish at Home Depot and Lowe’s. Housing-related commodities have struggled this earnings season. Of course, lowering mortgage rates through rate cuts from the Federal Reserve could change the outlook in the coming quarters. Best Buy reports earnings next week, and we’re discussing profit-taking ahead of the report. Profit outlook: “Gap Stores has rung the opening bell, and I think we’re probably on the cusp of a multi-year move where I’d probably push this company into the bullpen,” Cramer said. We’ll be paying close attention to Gap’s earnings report next week. After the bell, we’ll see gains from growing restaurant chain Cava, several software stocks in Workday and Intuit, and discount retailer Ross Stores. JACKSON HOLE: The most important event on Friday isn’t economic data or earnings, but Federal Reserve Chairman Jerome Powell’s speech at the central bank’s annual meeting in Jackson Hole, Wyoming. We could get some clarity from Powell on whether the Fed is leaning toward a quarter-point or half-point cut at its September meeting. Any guidance on how much the U.S. central bank governor expects to cut interest rates by the end of the year would also be welcome. Before the speech, markets expected a rate cut of 1 percentage point, or 100 basis points, this year, according to the CME FedWatch tool. (See here for a complete list of stocks in the Jim Cramer Charitable Trust.) As a subscriber to Jim Cramer’s CNBC Investing Club, you will receive trade alerts before Jim makes his trades. Jim waits 45 minutes after sending a trade alert before buying or selling stocks in his charitable trust portfolio. If Jim talked about a stock on CNBC TV, he would wait 72 hours after issuing a trade alert before executing the trade. The investment club information above is subject to our Terms and Conditions and Privacy Policy and our Disclaimer. No fiduciary duty or obligation shall exist or arise upon your receipt of any information relating to the Investment Club. No specific results or profits are guaranteed.

Every weekday, CNBC Investment Club with Jim Cramer publishes Homestretch—an actionable afternoon update just in time for the final hour of trading on Wall Street.

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