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: The Federal Reserve on Wednesday afternoon cut the fed funds overnight bank lending rate by 50 basis points to the range between 4.75% and 5%. The Fed was widely expected to lower short-term interest rates, but the 25 basis points versus 50 debate raged right up until the announcement. It was the first true toss up in a long time. In the end, the Fed opted to go with a more “risk management” approach as it balances possibly hurting the labor market with inflation progressing down towards its 2% goal. The reaction to the announcement has been quite volatile in the market. Initially, stocks surged to record highs but then cut those gains. At his post-meeting news conference, Fed Chairman Jerome Powell said that unemployment ticked up but remains low and the economy continues to expand. He added that inflation has eased substantially but is still above target. Dot plots: Turning to the dot plots within the FOMC’s Summary of Economic Projections, 10 members estimate another 50 basis points of cuts, likely 25 at the next two meetings, before the end of the year. That would put the fed funds rate at a range between 4.25% and 4.5%. Looking out to the end of 2025, the dot plots suggest another 100 basis points, or 1 percentage point, of rate cuts with another 50 basis points in reductions in 2026. We never like to read too much into the dot plots because this Fed has repeatedly said it is going to be data-dependent and not on a preset plan. Mortgage rates: We talked last week during our September Monthly Meeting about how housing activity can start to pick up when mortgage rates fall off their cycle highs to somewhere in the range between 5% and 6.5%. It’s a big reason why we recently started a position in Home Depot and have held onto Stanley Black & Decker . This thesis is starting to play out as we thought as interest rates hit a two-year low. Earlier Wednesday, the Mortgage Banks Association’s reported total mortgage application volume increased 14.2% from the prior week and applications to refinance a home loan increased 24% from the week before. One thing to keep in mind is that these figures are coming off very low levels. However, what the data shows is how sensitive activity is to every dip in mortgage rates. The 10-year Treasury yield was slightly higher after the Fed announcement. The shorter end of the yield curve dropped. The S & P Homebuilders ETF (XHB) jumped to a fresh record-high on Wednesday. Up next: There are no major earnings set for after Wednesday’s close. However, Jim Cramer’s interview with Advanced Micro Devices CEO Lisa Su will be on ” Mad Money .” We expect to hear more about AMD’s artificial intelligence GPU strategy, the rationale behind its two recent acquisitions, and the latest on the AI personal computer market. Two restaurant chains report before Thursday’s opening bell: Oliver Garden and LongHorn Steakhouse parent Darden Restaurants and Cracker Barrel . (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.
