The quiet rally in energy continues, lifting our lone oil-and-gas stock higher

By Stock Market Journalists On Mar 25, 2024 12 0

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. (We’re no longer recording the audio, so we can get this new written feature to members as quickly as possible.) Markets: Stocks were slightly lower Monday in what has been a rather calm session. The sluggish start follows a powerful rally last week that sent the S & P 500 , Dow Jones Industrial Average and Nasdaq Composite to record high closes, before a down Friday. Energy’s Comeback: The tech sector dominates the Wall Street conversation because carries the largest weighting in the S & P 500 and the artificial intelligence trade has captured everyone’s attention. But did you know energy has been the top-performing sector in March? The rally this month comes alongside roughly $3-per-barrel rally in the price of oil, while natural gas has slipped back. In Monday’s session, specifically, energy also was the top S & P 500 sector. “Glad Coterra Energy emphasized oil, which keeps going higher and de-emphasized natural gas,” Jim Cramer said, referring to the Club holding that maintains sizable production businesses for both commodities. With its fourth quarter 2023 earnings report, Coterra announced plans to shift some of its capital investment toward more oil production instead of natural gas, given depressed prices for the latter. Shares of Coterra are up about 8% in March, among the best-performing Club holdings. New highs list: There’s lone stock in the portfolio making a new 52-week high Monday is Disney . Shares of the media-and-entertainment giant is benefitting from longtime bear Barclays upgrading the stock to a buy-equivalent rating with a $135 price target. Barclays got more bullish on Disney on the view that management’s turnaround strategy will have a greater impact on earnings starting next year. “The pressure on Disney from [activist investor Nelson Peltz] is really causing this company to concentrate and be more credible,” Jim said. Other tidbits: The “Magnificent Seven” is off to a slow start to the week, but Club name Nvidia is bucking the trend up nearly 2%. “Nvidia has so many orders that I think you can see why it is going higher,” Jim said. “That was the gist of last week: orders,” added Jim, who spent last week at Nvidia’s GTC conference in California. In Jim’s Sunday column , he discussed all the companies partnering with Nvidia and which ones he thinks stand to gain the most. Ford Motor ‘s renewed emphasis on profitable internal combustion engine and hybrid vehicles is a big reason why the stock has outperformed electric vehicle pure plays. On Monday, Mizuho downgraded its rating on Tesla, Rivian Automotive, and Nio, citing concerns about near term EV demand and tightening liquidity. “It’s time for Ford to break out,” Jim said. “It is so heavy ICE and hybrid that it is just a little push to $13 to get this thing rolling.” Shares of Ford were roughly flat Monday, around $12.90 each. We increased our price target to Eaton Corp. to $330 a share on Friday, and then over the weekend we read some interesting journalism that goes to the heart of our investment thesis in the company. “There’s a piece in the Wall Street Journal about how AI data centers will consume so much power that it could overwhelm the grid. Think Eaton,” Jim said. Up next: It may be a slower news week since this we are in the last few days of the first quarter. There are no major earning reports Monday night, and the only report Tuesday morning worth monitoring its from the spice maker McCormick . (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.

An oil tank and an oil pumpjack are pictured in the Permian basin, Loco Hills regions, New Mexico, U.S., April 6, 2023.

Liz Hampton | Reuters

The quiet rally in energy continues, lifting our lone oil-and-gas stock higher

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