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. Here’s Monday’s edition. If history is any guide: “We are starting to see some bulls turn into bears because we are up 14 out of 15 weeks. I think you need to focus on individual stocks which indicate that things are quite good,” Jim Cramer said Monday. Economic data has been far more resilient than what anyone predicted while inflation data has cooled. A strong economy has given the Federal Reserve more time to ensure that inflation is squashed out before cutting interest rates. “Everyone seems to focus that the market has too much animal spirits, but the period between the Fed ending rate hikes to before they start cutting can be a bountiful period,” Cramer added. An “exhausted” rally is something to be mindful of, but at the same time, it is hard to argue against the sweet spot the market is in. Either way, our large cash position gives us the flexibility to swoop in and buy high-quality stocks should we see some broader decline. What bears tell us: Short squeezes can be a sign that animal spirits have made their way into the markets. One of the more notable ones we’ve seen over the past couple of days is in the semiconductor design company Arm Holdings . “Arm is a short squeeze but it wouldn’t be able to go up like this if it weren’t for so much interest in semis,” said Jim. From last Tuesday’s close to this Monday, the stock has nearly doubled. “I think that Broadcom has lagged,” he added. Stocks on the move: The AI trade always gets a lot of attention because Nvidia seemingly trades up every day, but the “broadening out” rally is what’s in favor on Monday. Energy is the surprise outperformer even though energy prices are lower. People are buying the group looking for the…
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