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. Markets: Stocks are rebounding to start the week, though they are off sessions highs in afternoon trading. The S & P 500 is on track to break a two-session losing streak, during which the broad index declined by about 2%. Bonds are acting better since the morning, but yields remain a focal point for investors. The yield on the benchmark 10-year Treasury note is now down slightly on the session, at roughly 4.42%, after climbing up to about 4.45% at the start of Monday’s Morning Meeting. Over the past week or so, the 10-year yield has made a couple of attempts at 4.5% before quickly falling back. This could be a sign that is a level that invites buyers back in. Remember, yields move inversely to bond prices. Rising interest rates tend to be a headwind to the stock market for a few reasons. For starters, they compress estimated equity valuations that are based on discounted cash flow analyses ; basically, higher rates lower the present value of future earnings. Another important reason is they raise borrowing costs for businesses, which especially hurts companies that are more dependent on financing. PT bump: In his interview with Jim Cramer on Friday night, Dover CEO Richard Tobin made a great case that the diversified industrial company’s best days are still ahead. It’s worth a watch if you haven’t already . After their conversation, we gained an entirely new appreciation for the Club holding’s push into cryogenic components because it could become a data-center play in the future. The company announced two acquisitions this summer with ties to the cryogenic gas market, which broadly covers low-temperature materials. The first was of Marshall Excelsior Company in late July , followed by SPS Cryogenics on Aug. 12. Dover already has a presence in data centers through its thermal connectors, which are used in the liquid cooling of fellow Club holding Nvidia ‘s most-advanced artificial intelligence servers. But as the supercomputers and AI chips of the future become more powerful and burn off more heat, the cooling technology needs will get more challenging. Tobin thinks cryogenics may be the next solution after liquid cooling, which itself is an advancement over the air-cooling method. Another part of the interview that was music to our ears: Tobin said he spends 90% of his time with Dover’s board of directors going over sum-of-the-parts analysis of the company. An active approach to portfolio management has always been a hallmark trait of this Dover management team, and we touted it as a reason to like the stock when we initiated our position in late May . However, Tobin’s explanation made us more confident that Dover’s recent buys and divestitures — coupled with about $3 billion of dry powder at year-end — will enhance the company’s earnings growth outlook. And yet, the stock only trades at 21 times forward earnings. We see more gains ahead as Dover increases its exposure to secular-growth drivers. Accordingly, we are raising our price target to $215 a share from $200. Up next: Before the opening bell Tuesday, we’ll get earnings from Walmart , Lowe’s , Medtronic , and Viking Holdings . On the economic data side, October housing starts are set to be released at 8:30 a.m. ET. Economists expect to a slight month-over-month decline due to persistently high mortgage rates. (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.
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.
