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. Rate cut reaction: The stock market reversed its gains and dropped after the Federal Reserve on Wednesday afternoon cut interest rates by 25 basis points to the target range of 4.25% to 4.50. The vote was not unanimous. There was one dissenting vote by Cleveland Fed President Beth Hammack, who was in favor of no cuts. The December meeting included an update to the monetary policymakers’ Summary of Economic Projections — including the excessively analyzed “dot plots,” which provide a glimpse into where Fed members expect rates to be over the next three years and the longer term. The dot plots showed a median forecast of 50 basis points of easing, or two 25-basis-point rate cuts, in 2025. This suggests the Fed anticipates fewer rate cuts next year than what it expected in September. As a result, the 2-year Treasury yield surged higher. So far, it appears to be the “hawkish cut” that we expected. Fed Chairman Jerome Powell has previously indicated that central bankers are in no rush to cut rates, and every decision made will be data-dependent. He echoed those comments Wednesday. During his post-December meeting news conference, Powell said the economy remains strong and inflation is coming gradually down. He added that housing inflation has been coming down — not as much as hoped, but that is happening. Powell also said it’s too early to model with any certainty what potential impact Trump tariffs might have. Before the Fed announcement, the Dow was tracking to break its first nine-session losing streak since 1978. But not anymore. A lower Dow close Wednesday would extend the run of down days to 10 in a row, the worst since an 11-session slide in 1974. Obesity race: The obesity arms race continues to heat up. This time it was Merck throwing its hang in the ring in a deal with a Chinese drugmaker that could be valued as much as $2 billion. The lead asset acquired in the deal is an experimental oral GLP-1. The Chinese company’s drug is in the preclinical stage and hasn’t entered human trials. Wall Street has been waiting for Merck to get into this market, but we think it’s way too premature to say this is a potential threat to the dominance of Novo Nordisk and Club name Eli Lilly in this class of drugs, which are used primarily to treat obesity and diabetes. Lilly and Novo Nordisk both have popular injectables on the market. Lilly’s oral GLP-1, orfoglipron, is currently in Phase 3 trials, and management has plans to build out its manufacturing capacity “at risk” in anticipation of its success. Novo Nordisk is working on a pill, too. Wall Street views Merck news more negatively for biotech Viking Therapeutics , which has its own experimental drug in testing. Viking shares was dropping 12% in Wednesday afternoon trading. There has been speculation that Viking could be a takeover target of a larger pharma company. Up next: There are actually several companies reporting over the next day. The most important of them all may be Micron, the memory supplier to the chip industry. The company reports earnings after Wednesday’s closing bell, and its quarter and outlook will provide supply and demand insights into several key end markets, including smartphones, PCs, and high bandwidth memory for AI chips. Homebuilder Lennar also reports after the close. Before Thursday’s opening, Accenture, Cintas, Darden, FactSet, Conagra, Paychex, and CarMax all deliver their quarterly numbers. (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.