The latest inflation uptick means the Fed will likely raise rates
Every weekday, CNBC’s Investment Club hosts a live morning meeting with Jim Cramer at 10:20 a.m. ET. Here’s a look back at Wednesday’s key moments. Stocks rise Oracle, bold move from Ford 1. Stocks rise despite rising inflation Stocks edged higher in morning trading Wednesday — with the S&P 500 up 0.23% — even as the monthly consumer price index showed inflation climbing more than expected. months. The U.S. Department of Labor reported on Wednesday that the CPI rose 0.6% month-on-month in August on a seasonally adjusted basis and 3.7% year-on-year. The gasoline index was the largest contributor to the monthly gains among all commodities, accounting for more than half of the gains. The report also shows that the housing index continues to rise, rising for 40 consecutive months. This news may mean that the Fed will need to raise interest rates by 25 basis points. 2. Beating Oracle Following Tuesday’s post-earnings sell-off in club holdings Oracle ( ORCL ), J.P. Morgan downgraded the software stock to “neutral” from “overweight” while lowering its price target to $112 per share. Shares cost $100. “Overall, we think the long-term outlook for the business remains positive and (Oracle’s cloud business) remains a promising area, despite some volatility and hurdles, and valuations have declined over the past 12-15 months. Value buffer reduced. ORCL shares soared,” J.P. Morgan analysts wrote in a research note. We still believe the sell-off is overdone and this is a clear buying opportunity. The stock held steady on Wednesday, rising 0.88% to $110.59 per share. 3. A bold move from Ford Ahead of the growing possibility of a strike, UBS initiated coverage of club name Ford (F) with a buy rating and a $15 per share price target. The company believes revenue from the higher-margin Ford Pro segment is key to keeping earnings more resilient than expected and believes Pro software could create long-term upside over time. That’s more than enough to offset the mixed execution issues at Ford’s electric vehicle and internal combustion divisions. UBS said there were no potential strikes in its data, but analysts believe it is possible. Jim Cramer said Wednesday that Ford stock more broadly could provide clues about Wall Street’s current attitude toward a potential UAW strike. (Jim Cramer’s Charitable Trust is a long-term holding of ORCL, F. See here for the full list of stocks.) As a subscriber of Jim Cramer’s CNBC Investing Club, You will receive trade alerts before Jim Cramer trades. Jim waits 45 minutes after sending a trade alert before buying or selling stocks in his charitable trust portfolio. If Jim talked about a stock on CNBC TV, he would wait 72 hours after issuing a trade alert before executing the trade. The investment club information above is subject to our Terms and Conditions and Privacy Policy and our Disclaimer. No fiduciary duty or obligation shall exist or arise upon your receipt of any information relating to the Investment Club. No specific results or profits are guaranteed.
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