What caused the stock market’s lackluster week — plus, an earnings season update
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 erased much of their losses Friday but were still lower on the week. The S & P 500 was on track for a nearly 2% decline this week. AI-related names and other “highflyers” came under pressure in recent days as the market pushed back on stretched multiples and the funding sources of AI infrastructure projects. Data on the labor market was mixed, too. ADP data on Wednesday showed that payroll growth at private companies came in stronger than expected for October. Just a session later, however, Wall Street found out that layoff announcements last month had skyrocketed, which signaled trouble on the horizon for the U.S. labor market. The government shutdown has started to take a noticeable toll on the economy. The stoppage is weighing on areas such as air travel, as seen in the FAA’s series of flight cancellations. Consumer spending could soften, too. There was already an early sign, as the latest consumer sentiment reading was near an all-time low . This is a fixable issue, though. The short-term GDP hit that happens during a shutdown typically reverses in the following quarters. This one, however, just happens to be the longest in the country’s history. Finally, the Club made three buys this week, which include Starbucks, Boeing, and GE Vernova . Still, we’re armed with plenty of cash, representing about 7% of the entire portfolio. Our plan is to continue to opportunistically put money to work as prices fall. Earnings season : Roughly 90% of S & P 500 companies have posted third-quarter earnings, and the percentage of positive surprises dipped again from last week. Of all the companies that have reported, according to data from FactSet, 77% have delivered positive revenue surprises. That’s down from 79% last week. Meanwhile, 82% have reported positive earnings-per-share surprises, which is lower than the 83% from the week prior. Still, the percentage of beats is running above the five-year and 10-year averages. Up next: There aren’t too many major quarterly reports next week, but some of the key ones will be Club holdings Cisco Systems and Disney. CoreWeave , On , and Applied Materials are on deck, too. It was also supposed to be a big week of government economic data. But the consumer price index, the producer price index, and retail sales will likely be delayed due to the shutdown. (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.