Stocks rise on cooling inflation, booming bank profits and new rules on Chinese biotech exports | Wilnesh News
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: Wall Street soared Wednesday on the back of a second encouraging inflation report this week and a group of strong banks taking profits. The consumer price index excluding food and energy was slightly below expectations ahead of Wednesday’s open, while the same story was seen in a measure of wholesale inflation a day earlier. According to the CME Group’s FedWatch tool, after Wednesday’s release of the consumer price index, the possibility of the Federal Reserve cutting interest rates twice this year increased. Friday’s hot December jobs report prompted investors to rethink the path to future interest rate cuts. Of the 11 sectors in the S&P 500, financials were one of four to gain more than 2% on Wednesday. Others include communications services, consumer discretionary and technology. Earnings reports boosted financial stocks. Club name BlackRock’s stock surged about 5% after results showed recent sellers were getting out of the car prematurely. Wall Street wisely focused on the bigger picture for portfolio stock Wells Fargo, causing its shares to rise 7%. Meanwhile, Goldman Sachs confirmed our recent exit from Morgan Stanley as executives expressed optimism about deal activity in 2025. Bristow Vision: In fact, the biggest market for Bristol-Myers Squibb’s new schizophrenia treatment may be Alzheimer’s patients. That’s the conclusion company leaders came to when speaking with our CNBC colleague Annika Kim Constantino at the J.P. Morgan Healthcare Conference in San Francisco. Executives at the company said in interviews that each therapeutic use they are studying for Cobenfy has billions of dollars in potential, including Alzheimer’s disease psychosis, Alzheimer’s disease and Alzheimer’s cognition, and Alzheimer’s disease cognition. Cognitive disorders and autism. But Bristol-Myers Chief Financial Officer David Elkins told CNBC that Alzheimer’s is “a really huge market here.” Elkins said that there are nearly 6 million Alzheimer’s patients in the United States, and about half of them suffer from psychosis or symptoms such as hallucinations and delusions. Chief commercial officer Adam Lenkowsky said Cobenfy may be the first drug approved specifically to treat Alzheimer’s-related psychosis. Cobenfy’s long-term potential is core to our investment thesis at Bristol-Myers Squibb, and its opportunities in areas beyond schizophrenia make us optimistic. Jim Cramer said that if all possible uses are taken into account, Cobenfy’s annual sales may one day reach $10 billion. We’ll be keeping a close eye on results from Bristol-Myers Squibb’s late-stage trial targeting Alzheimer’s-related psychosis, which is expected to be released later this year. Shares of Bristol-Myers Squibb edged higher on Wednesday. Eli Lilly is also involved in the Alzheimer’s treatment market, but in a different way. Eli Lilly’s Kisunla, approved by U.S. regulators last year, aims to slow the actual progression of the memory-depriving disease by removing abnormal protein clumps from the brains of Alzheimer’s patients. Commercialization of the drug got off to a slow start. BIOTECH EXPORTS: Club names GE Healthcare and Danaher gave up early gains Wednesday on news of new Commerce Department controls on exports of biotech equipment to China. Citing national security concerns, the agency said biotech tools could be used for “enhanced human performance, brain-computer interfaces, biomimetic synthetic materials, and possibly even bioweapons.” Research analysts at Leerink said Wednesday that the rule “appears to be very narrow.” That could limit the impact on Danaher. Additionally, Danaher can offer nearly its entire product portfolio locally in China, which should help the company maintain control. We don’t think GE Healthcare will sell any products related to the ruling, but the stock still fell on sympathy. The company also has strong manufacturing capabilities in China. The new biotech export rules are part of the Biden administration’s broader strategy to limit the flow of cutting-edge U.S. technology to China. The White House is concerned that the Chinese government could use access to such technology to enhance its military capabilities. On Monday, the U.S. Commerce Department also proposed new restrictions on the export of artificial intelligence chips, hitting Nvidia portfolio stocks for several consecutive trading days. However, Nvidia shares rose 3% on Wednesday, breaking a five-day losing streak. Latest China News: GEHC shares opened higher on Wednesday before the export ruling surfaced, and the next morning we described it as relief following management’s presentation at the JPMorgan Healthcare Conference. The main takeaway: China performed slightly better than expected, with signs of increased activity. While there may be signs of recovery, visibility remains low and management is cautiously reiterating caution to temper expectations. Jeff Marks, director of portfolio analysis at The Investment Club, said on Wednesday he was glad business in the world’s second-largest economy wasn’t getting worse as the company waits for promised economic stimulus from the Chinese government to take effect. Banks like Bank of America and Morgan Stanley continued to post profits Thursday morning after Portfolio Financial Corp reported strong quarterly results. We will look for interpretations from Nvidia and Broadcom in TSMC’s pre-market earnings report. In addition to earnings, government retail sales data for December will be released at 8:30 a.m. ET. While not adjusted for inflation, we’ll take a look at how shoppers are feeling in the final month of the holiday shopping season against the backdrop of cooling consumer inflation trends detailed Wednesday morning. (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 is created or created by any information you receive in connection with 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.
