2 of our financial stocks jump to record highs — plus, Meta's Threads keeps growing

CNBC

3 days ago

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 S & P 500 and tech-heavy Nasdaq Composite surged to record highs, adding more than 1% each, following the July consumer price index report. Headline inflation increased slightly less than expected on an annual basis, causing traders to increase the odds of a quarter-point interest rate cut at the September meeting. Technology and the "Magnificent Seven" stocks continue to drive the rally, as they have all quarter, but what stands out Tuesday is the strong showing from the financial sector, which has mostly struggled since the start of July. Even with the sector's more than 1% advance on Tuesday, the group is still in negative territory quarter to date. We always like to see the banks leading market rallies because they are a barometer of the economy. Both Club names Goldman Sachs and BlackRock hit record highs during the session, with Goldman managing to brush off criticism from President Donald Trump on Truth Social. Capital One wasn't quite back to its record close of $220.91 on July 3, but it was participating in the rally. Shares added nearly 4%, to roughly $216 apiece. Growing base : Meta Platforms CEO Mark Zuckerberg announced on Tuesday afternoon that its Threads social network has surpassed 400 million monthly active users — an increase of 80 million since late January. Appropriately, Zuckerberg made the disclosure in a post on Threads. This is solid growth for the social platform that was launched about two years ago, but don't expect it to be a meaningful contributor to revenue just yet. Threads is in the early stages of its monetization journey – the company introduced ads within the "Feeds" on Threads in the second quarter and ad supply is low, CFO Susan Li said on the late July earnings call. Meta also rolled out ads on WhatsApp during the period, which is another potential growth driver further down the road. Given the scale of Instagram and Facebook's ad businesses, it will take a bit for these other apps to move the needle. Another wrinkle to watch around Threads is how some technological experimentation on the app could show up across the Meta empire. Specifically, Meta is using large language model technology in the social network's recommendation system and seeing "promising results" in doing so, Li said on the earnings call. LLMs are the foundation for generative AI chatbots like ChatGPT, and there's been a school of thought that incorporating the technology into traditional recommendation systems can improve them. "The incorporation of LLMs are now driving a meaningful share of the ranking related time spent gains on Threads," Li said. "We're now exploring how to extend the use of LLMs in recommendation systems to our other apps." Up next: AI cloud computing provider CoreWeave reports after the closing bell on Tuesday, and because it's a key partner to Nvidia, the company's commentary will give us a look into the pace of AI infrastructure spending. Fast-casual restaurant chain Cava Group also reports after the closing bell. Before the opening bell on Wednesday, we'll see earnings from Brinker International , the parent company of Chili's Grill and Maggiano's. (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.