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Every weekday, the CNBC Investing Club releases the Homestretch with Jim Cramer – an evening update action, just in time for the final hour of trading on Wall Street. Markets: Stocks have started higher after a slight decline in the S&P 500 last week, but one major theme remains: Once again, the Magnificent 7 stocks, excluding Nvidia, lead the S&P 500 during the market. the width (in terms of the number of advances to the descent) remains poor. While the average stock seems unable to move forward, we’re viewing this lackluster action with an opportunistic lens, as the market ended last week oversold according to the S&P Oscillator. China and Starbucks: Some consumer stocks with strong Chinese ties are taking a hit after other disappointing economic numbers. The country’s National Bureau of Statistics reported retail sales rose 3% in November, missing the 4.6% forecast in a Reuters poll. We reduced most of our exposure to the Chinese consumer after the separation with Wynn Resorts, but we still own Starbucks. Weak retail numbers weighed on the coffee chain’s shares on Monday, but we’d argue the company should be measured by CEO Brian Niccol’s ability to turn things around in the United States. This is Starbucks’ most important market and Niccol’s main focus. But back to China, we liked the news on Monday that Starbucks hired its first growth director in China. It seems like a long time ago. But the question we still have is: What is Starbucks’ long-term strategy in China? Will management achieve strategic partnerships? Is a spin-off of the Chinese franchise on the table? We don’t know these answers, but we trust Niccol as an operator to do what’s best for the company. Chip stocks: Broadcom has officially gone parabolic. The stock is one of the biggest gainers in the market on Monday, after last Friday’s 24% rise. Last week’s rally pushed the semiconductor and software company’s market capitalization into the trillion-dollar club. Even though the market is technically oversold — meaning we’re more of a buyer than a seller — we would have sold 100 shares of Broadcom on Monday if we didn’t have a limit. Not only did it rise too quickly, but its 32% move over the past two sessions has made its position size one of the largest in the portfolio. Hock Tan explained in his earnings call last week that if we remain bullish on AI’s long-term outlook, our discipline says it’s time to call the record and take profits on the stock’s remarkable 115% move this year. We are lowering our rating to 2. We would take a portion of the proceeds from the sale of 100 shares to rally some Advanced Micro Devices stock to its continued weakness. AMD has subsequently been hurt as hyperscalers increasingly prefer custom AI chips from Broadcom and Marvell Tech to AMD GPUs as alternatives to Nvidia. This was the main point of AMD’s rating downgrade by Bank of America analysts last Monday. The drop had some good points, but it didn’t give enough credit to CEO Lisa Su’s roadmap and her moves to boost AI engineering talent by acquiring ZT Systems. In addition, AMD shares are now trading around $126, down 10% from a low of $140 just 10 days ago – a price that doesn’t fully appreciate the server market share it has won against Intel. Next: No big gains after the closing bell on Monday or before the opening bell on Tuesday. On the data side, we’ll get a reading on holiday spending on Tuesday after the release of the November retail sales report. (See a full list of Jim Cramer’s Charitable Trust stocks here.) As a subscriber to the CNBC Investing Club with Jim Cramer, you’ll receive a trade alert before Jim trades. Jim waits 45 minutes after sending a trade alert before buying or selling a share in his charitable trust portfolio. If Jim has talked about a stock on CNBC TV, he will wait 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTMENT CLUB INFORMATION IS SUBJECT TO OUR SPECIFIC TERMS AND CONDITIONS AND PRIVACY POLICY, WITH OUR DISCLAIMER. NO FIDUCIARY OBLIGATION OR OBLIGATION SHALL BE CREATED, OR CREATED, FOR ANY INFORMATION ENTERED INTO WITH THE INVESTMENT CLUB. NO SPECIFIC RESULTS OR PROFITS ARE GUARANTEED.
Hock Tan, CEO of Broadcom.
Martin H. Simon | Bloomberg | Getty Images
Every weekday, the CNBC Investing Club releases the Homestretch with Jim Cramer – an evening update action, just in time for the final hour of trading on Wall Street.
