Stocks on the Rise as Inflation Data Sparks Rate Cut Speculation
Stocks experienced modest gains on Friday, closing the week on a positive note, bolstered by data from the Federal Reserve’s preferred inflation measure that supports the prospect of an interest rate reduction next week. Over the course of the week, the S&P 500 increased by 0.3%, while the Nasdaq saw a nearly 1% rise, marking consecutive weekly gains for both indexes. The Dow Jones Industrial Average also climbed approximately 0.5%. On Friday morning, the government released its September personal consumption expenditures (PCE) price index, indicating a year-over-year rise in the core rate that was cooler than anticipated. This report, delayed due to the government shutdown, was a welcome development in a market eager for data ahead of the Federal Reserve’s upcoming two-day policy meeting on Tuesday and Wednesday.
S&P 500 Approaches Record High Following Positive Sentiment
It has been a few weeks since New York Fed President John Williams reignited discussions around the potential for a central bank rate cut. During this period, the S&P 500 has rebounded by 5%, ending the week just below its record closing high of 6,890 set on October 28. Highlighting this week’s market activity, shares of Meta Platforms rose by 4% after a report indicated that the parent company of Instagram and Facebook plans to reduce its metaverse expenditures by as much as 30%. This strategy, if implemented by CEO Mark Zuckerberg, could be a prudent move, allowing the company to concentrate on more immediately lucrative technologies, including Meta’s smart glasses and its advancements in artificial intelligence. Meta has faced significant financial pressures, particularly since late October when it increased its capital expenditure forecasts in conjunction with strong earnings reports.
Salesforce Surges After Strong Earnings Report
Salesforce shares jumped an impressive 13% for the week following a robust earnings beat, making it the strongest performer in this week’s portfolio. Despite this surge, Salesforce’s stock remains down 22% year-to-date, reflecting ongoing concerns about the impact of generative AI on its traditional customer relationship management (CRM) business model. Alongside its fiscal 2026 third-quarter results, the company’s management raised its guidance and reported an uptick in paid deals for Agentforce, its AI platform. During an appearance on Thursday’s “Mad Money” with Jim Cramer, Salesforce CEO Marc Benioff emphasized that AI should be viewed as a “commodity feature” enhancing the value of their CRM offerings.
CrowdStrike Delivers Strong Results Amid Market Volatility
On Tuesday evening, CrowdStrike released its fiscal 2026 third-quarter results, which exceeded expectations and included optimistic future guidance. Jim Cramer referred to it as a “trophy quarter” after the cybersecurity firm achieved record levels in free cash flow, annual recurring revenue, and operating income. Despite this positive news, the stock remained relatively stable for the week, a common trend for CrowdStrike and other cybersecurity firms, such as Palo Alto Networks, which often see their stocks dip post-earnings before rebounding in subsequent weeks. Following the report, we maintained our buy-equivalent rating on CrowdStrike and raised our price target from $520 to $550.
Recent Trades and Strategy Highlights
This week, we executed three notable trades. On Monday, we acquired additional shares of Boeing as the stock began to stabilize following a significant decline post-earnings in November. We opted to wait for a more stable market environment before increasing our investment. On Tuesday, we added to our position in Procter & Gamble after its stock dipped in response to CFO Andre Schulten’s comments regarding a turbulent U.S. economic landscape. We remain optimistic about P&G’s future prospects and are building this defensive position in anticipation of a potential slowdown in AI-driven investments. On Wednesday, we took profits on Goldman Sachs, which reached a record high on Friday. Our long-term outlook for this position remains strong.
As a member of the CNBC Investing Club with Jim Cramer, you will receive advance trade alerts before any transactions are made in the charitable trust’s portfolio. Jim allows a 45-minute window after sending a trade alert before executing any buys or sells. Additionally, if Jim has discussed a stock on CNBC, he waits 72 hours post-alert before acting on it.
