Every weekday, CNBC Investing Club with Jim Cramer publishes the Homestretch — an actionable afternoon update, just in time for the final hour of trading on Wall Street. Markets: The Dow and S&P 500 traded lower Friday after soaring to record highs Thursday in response to the Fed's 50 basis point rate cut. It was a strong week for stocks, with the S&P 500 up about 1.5%. The best-performing sectors so far this week were energy, communications services, financials and industrials. Only three sectors were headed for a down week: real estate, consumer staples and health care. Obesity drugs: New information often drives a company's stock higher and sends its biggest competitor lower. Take a look at shares of the club called Eli Lilly. They traded higher in a weak market after a key obesity competitor reported disappointing results from Phase 2 trials. That rival, Novo Nordisk, said Friday its drug monlunabant, a small molecule oral cannabinoid receptor (CB1) inverse agonist, showed weight loss of about 6% after 16 weeks. That was a big disappointment. The results fell short of those of Lilly's leading daily oral GLP-1 orforglipron, which showed weight loss of about 8% after 16 weeks, well below what Novo had previously reported. Deutsche Bank analysts called the trial results disappointing, adding they “remove the threat of a large, well-capitalized, small-molecule competitor to LLY's orforglipron.” Competition in the obesity space will intensify over the next few years, but this disappointment from Novo Nordisk shows how difficult it is to make a safe and effective drug. That's why we've long been opposed to selling Eli Lilly when a competitor issues a press release about an early-stage trial. Some drugs will work, some won't. Some will be highly effective, some will do nothing. Some will have safety and tolerability issues. That's the nature of the business. But what we know now is that Eli Lilly isn't going to lose its leadership position anytime soon, thanks to its current obesity drug lineup, robust pipeline, and massive manufacturing capacity. Cybersecurity Stocks: In other scenarios, both a company and its competitor can rise on the back of new news. CrowdStrike shares rose after the cybersecurity company hosted its annual conference. One of the key revelations of the event was the very low customer churn following the global IT outage it caused in July. Recall that we initially assumed that competitors like Clubname Palo Alto Networks would use this event to tout their products. However, we can't say we're completely surprised that very few customers are abandoning CrowdStrike. When we looked at Palo Alto's August quarter, the results didn't show a huge swing in market share as a result of the outage. Sure, the quarter was good because Palo Alto has a great product and value proposition, but it didn't indicate a massive departure from CrowdStrike. Both companies are great, so why aren't Palo Alto shares lower? CrowdStrike's commentary likely suggested that cybersecurity spending is still healthy, which benefits both companies. Next up: We'll see a bump in earnings next week. Some of the notable reports come from KB Home, which offers insight into homebuilding, and Micron, which gives us a good look at demand and inventory for high-bandwidth memory (which goes into AI chips) as well as mobiles and PCs. Jefferies, which always provides a good preview of the banks, and clubname Costco, which offers a good read on consumer spending, also come out next week. (A complete list of stocks in Jim Cramer's Charitable Trust can be found here.) As a subscriber to CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after he issues a trade alert before buying or selling a stock in his charitable foundation's portfolio. If Jim has discussed a stock on television on CNBC, he will wait 72 hours after the trade alert is issued before executing the trade. THE INFORMATION REGARDING INVESTING CLUB PROVIDED ABOVE IS SUBJECT TO OUR TERMS OF SERVICE AND PRIVACY POLICY, AS WELL AS OUR DISCLAIMER. NO FIDUCIARY OBLIGATION OR DUTY EXISTS AND WILL NOT BE CREATED BY RECEIVING INFORMATION RELATED TO INVESTING CLUB. NO PARTICULAR RESULT OR PROFIT IS GUARANTEED.
Every weekday, CNBC Investing Club with Jim Cramer publishes the Homestretch – an actionable afternoon update, just in time for the final hour of trading on Wall Street.
