Surprising action in Wells Fargo stock, plus what may be driving Amazon higher

CNBC

2 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. Market update: Stocks were volatile on Thursday, but got a lift in late morning trading after President Donald Trump said he had a "very good" phone call with Chinese President Xi Jinping. While details of the call were scarce, it appeared to ease trade tensions between the two countries and helped calm recent worries about the supply of key rare earth materials like magnets. What's moving Amazon higher?: Shares of the e-commerce and cloud giant are higher in an otherwise subdued tape. There's a couple of stories that may be driving the positive price action. One was an article in the trade publication Adweek that highlighted how advertisers are moving "millions of dollars" in budgets from Trade Desk to Amazon's demand-side platform. The story lists several reasons why advertisers are moving money over to Amazon : lower fees, a better interface, greater measurement visibility, access to exclusive live sports, Prime Video's expanding reach, and a better partnership model. We're only talking millions of dollars here, so it's nothing too impactful in the context of Amazon's broader advertising services business that is expected to do about $67 billion of revenue this year. But anything is additive, and the bigger story may be how improvements Amazon has made to its platform over the past few years are paying off. Another story that caught our eye was The Information detailing how Amazon is working on a project to develop humanoid robots that could be used to deliver packages. It's still in the testing phase and could be many years before you see robots showing up at your doorstep, but this is one example of how Physical AI , which is a term Nvidia CEO Jensen Huang increasingly describes as the next wave of AI, is advancing and will be used in the real world. Strange moves: The trading action in Wells Fargo over the past two days has surprised us. After the Fed removed the bank's $1.95 trillion asset cap Tuesday evening, the stock shot up and touched $79 in early trading but finished the session down 27 cents, closing at $75.38. The stock is down slightly again Thursday. Yes, it's true it ran in anticipation of the announcement, bringing out the "buy the rumor, sell the news" crowd. We get that. Stocks of the big banks haven't exactly roared the past two days either. But we still think the sellers are getting this wrong. The removal of the asset cap happened earlier than we anticipated, and the no-longer-constrained Wells Fargo can go play offense. The bank is now better positioned to make more money, which is why we increased our price target to $90 yesterday. Up next: Club name Broadcom reports after the closing bell on Thursday. While we expect the semiconductor and software company to report strong results and highlight continued momentum in its AI business, it's worth noting that the near-term setup isn't great given the stock's recent run to all-time highs. Broadcom shares have rallied 9% this week and are up 15% over the past 8 sessions. Lululemon , Petco , Vail Resorts , Docusign , and Rubrik also report Thursday after the close. The big economic event Friday is the monthly nonfarm payroll report. Economists estimate the economy added 130 jobs in May, according to FactSet. The jobs report is one of the most important economic releases and has the power to set the market's tone for the rest of the month. Its stakes have increased over the past few days due to concerns about the health of the labor market. Those fears resurfaced Wednesday after ADP reported private payrolls increased 37,000 in May, marking its lowest increase since March 2023. (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.