Every weekday, CNBC Investing Club with Jim Cramer publishes the Homestretch – an actionable afternoon update, just in time for the final hour of trading on Wall Street. Markets: The Federal Reserve cut the Fed’s overnight interest rate by 50 basis points on Wednesday afternoon, to a range between 4.75% and 5%. The Fed was widely expected to cut short-term rates, but the 25 basis point vs. 50 debate raged right up until the announcement. It was the first real neck-and-neck race in a long time. In the end, the Fed opted for a more “risk-on” approach as it weighs potential damage to the labor market with inflation moving toward its 2% target. The market reaction to the announcement was quite volatile. At first, stocks rose to record highs, but then those gains collapsed. At his post-meeting press conference, Fed Chair Jerome Powell said that while unemployment has risen slightly, it remains low and the economy continues to grow. He added that inflation has eased significantly but is still above target. Dot Charts: As for the dot charts in the FOMC’s summary of economic projections, 10 members estimate there will be another 50 basis point cuts before the end of the year, and likely 25 at the next two meetings. That would put the fed funds rate in a range of 4.25% to 4.5%. Looking ahead to the end of 2025, the dot charts suggest another 100 basis point, or 1 percentage point, rate cuts, with another 50 basis point cut in 2026. We don’t want to read too much into the dot charts, as this Fed has repeatedly said it will depend on the data and not follow a pre-determined plan. Mortgage Rates: Last week during our September monthly meeting, we discussed how housing market activity can pick up when mortgage rates fall from their cycle highs to between 5% and 6.5%. This is a big reason why we recently initiated a position in Home Depot and held onto Stanley Black & Decker. That thesis is starting to play out, as expected, as rates hit a two-year low. Early Wednesday, total mortgage applications reported by the Mortgage Banks Association were up 14.2% from the previous week and home loan refinance applications were up 24% from the previous week. It’s important to remember that these numbers are from very low levels, but the data shows how sensitive activity is to any decline in mortgage rates. The 10-year Treasury yield was slightly higher following the Fed’s announcement. The shorter end of the yield curve fell. The S&P Homebuilders ETF (XHB) jumped to a new record high on Wednesday. Up next: No major gains are planned after the market closes on Wednesday. However, Jim Cramer’s interview with Advanced Micro Devices CEO Lisa Su will be featured on “Mad Money.” We expect to hear more about AMD’s artificial intelligence GPU strategy, the rationale behind its two recent acquisitions and the latest developments in the AI PC market. Two restaurant chains are reporting before trading opens on Thursday: Darden Restaurants and Cracker Barrel, the parent company of Oliver Garden and LongHorn Steakhouse. (A full list of stocks in Jim Cramer’s Charitable Trust can be found here.) As a subscriber to CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. After sending a trade alert, Jim will wait 45 minutes before buying or selling a stock from his charitable trust’s portfolio. If Jim has discussed a stock on CNBC television, he will wait 72 hours after the trade alert is issued before executing the trade. THE INVESTING CLUB INFORMATION DESCRIBED ABOVE IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY AND OUR DISCLAIMER. NO FIDUCIARY OBLIGATION OR DUTY EXISTS OR IS CREATED BY RECEIVING INFORMATION RELATED TO THE INVESTING CLUB. NO PARTICULAR RESULT OR PROFIT IS GUARANTEED.
Every weekday, CNBC Investing Club with Jim Cramer publishes the Homestretch – an actionable afternoon update, just in time for the final hour of trading on Wall Street.
