3 stocks set to bounce once the Fed finally lowers interest rates

Every weekday the CNBC Investing Club with Jim Cramer holds a “Morning Meeting” livestream at 10:20 a.m. ET. Here’s a recap of Thursday’s key moments. The S & P 500 and Nasdaq on Thursday retreated from their record highs, set in the previous session, after a cooler-than-expected inflation report sent investors out of Big Tech stocks and into smaller-cap names. June’s consumer price index (CPI) print, a measure of costs for goods and services, fell to its lowest levels since 2021, bolstering the case for the Federal Reserve to lower interest rates sooner rather than later. Club holdings Nvidia, Apple and Microsoft all tumbled. “This CPI is really in control today,” Jim Cramer said. Shares of Morgan Stanley , Stanley Black & Decker and Best Buy surged Thursday, giving us a glimpse at which portfolio names will benefit from a lower rate environment. Morgan Stanley’s wealth management margins will be less pressured once borrowing costs come down. Meanwhile, lower rates can spur more housing market activity, which means stronger demand for toolmaker Stanley Black & Decker’s offerings. Finally, Best Buy sales should increase when U.S. consumer spending on PCs and electronics picks back up. Wells Fargo will kick off the banking sector’s quarterly earnings season on Friday. The Club is watching for changes to management’s net interest income (NII) guidance. The Wall Street firm previously forecasted a 7% to 9% decline in NII for 2024 as customers take their deposits to higher-yielding alternatives. We’re hoping these estimates were conservative in order to temper investor expectations. The stock is up 0.8% on Thursday. (Jim Cramer’s Charitable Trust is long BBY, SWK, MS, WFC, NVDA, AAPL, MSFT. See here for a full list of the stocks.) 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.

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