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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 are building on Monday’s strong gains, following a major step toward de-escalating the U.S.-China trade war, as both countries agreed to reduce tariffs while a bigger deal is worked out. With Tuesday’s rally, the S & P 500 has turned positive for the year and is now trading at its highest level since mid-March. For the second consecutive day, the market rally is being led by the consumer discretionary sector— thanks in large part to Tesla and Amazon — and the information technology sector. Meanwhile, more defensive sectors such as consumer staples and health care, along with interest-rate sensitive areas like real estate and utilities, continue to lag behind. More layoffs: Microsoft is cutting 3% of its global workforce, which at the end of its last fiscal year totaled 228,000 people. That makes Microsoft the second tech company in the portfolio to announce layoffs this month after CrowdStrike announced a 5% reduction last week. Like we saw with CrowdStrike, though, Microsoft shares aren’t moving higher on the news — notable because usually investors like to see companies stay committed to running an efficient organization. Microsoft is accomplishing this by reducing management layers, a move that generally results in quicker decision-making In trying to understand why CrowdStrike shares fell, we said that maybe some investors were viewing the cybersecurity company’s cuts as a sign of demand sluggishness. While we do not think that ourselves, it was worth highlighting as a possibility. With Microsoft, though, we highly doubt anyone is thinking this is a sign of weakness because we just got a really strong earnings report accompanied by even stronger guidance . In all likelihood, the subdued share-price move Tuesday is a case of a stock being due for a breather. It was the most resilient of the “Magnificent Seven” stocks during the market’s tariff-driven sell-off, so it’s no surprise that investors are now turning to other mega-cap tech companies — like Amazon, Meta Platforms , Nvidia and Tesla — that stand to benefit even more. Microsoft entered the session up more than 13% this month, compared with a roughly 7% advance for the tech-heavy Nasdaq . Worldwide leader: More details about Disney’s new sports streaming platform are finally coming to light. It’s brand new, all-access ESPN streaming product will cost $29.99 a month — or $35.99 a month as part of an ad-supported bundle with Hulu and Disney+. The forthcoming service, which launches this fall, will for the first time provide all that ESPN’s cable channels have to offer in a streaming product. The current ESPN+ offering excludes certain live events. While investors have questions on what the appetite for this new ESPN product will be, it is a strategic priority for the company as it looks to offset declining linear TV revenue due to cord-cutting. In the quarters ahead, this will be a key theme to monitor. If it’s a success, the Disney bull case will get more formidable. Elsewhere, Jim is interviewing Disney’s entertainment co-chairman Dana Walden later Tuesday on “Mad Money,” where we’ll look for any additional color on the company’s streaming business more broadly. Up next: There aren’t too many companies reporting over the next day. There’s CyberArk Software and JD.com after the closing bell Tuesday, and Wednesday before the opening bell we’ll hear from Sony and Tencent . It’s also a light day of data Wednesday, with weekly mortgage applications being the only key economic report. (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.
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.
