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 Tuesday's key moments. 1. Stocks are lower on Tuesday after a hotter-than-expected consumer price index pushed bond yields up. This comes after big back-to-back gains following last Thursday's post-election market rout. Jim Cramer pointed out that oil dropping below $90 per barrel for the first time since August, amid hopes of de-escalation in the Iran war, could make October the "last bad CPI" print. Much of the increase in consumer inflation is due to elevated energy prices. If they continue to come down, maybe that limits the Federal Reserve to a quarter-point interest rate increase next month rather than a half-point hike. 2. We're lowering Nvidia to our hold-equivalent 2 rating from a 1. Portfolio director Jeff Marks said the reason for the downgrade is that we are unwilling to say Nvidia's two-session drop of nearly 10% this week makes it a buy. We're in a holding pattern until it becomes clearer what may happen after the board…
Our Nvidia downgrade — plus, Cramer is looking to add to this position
In short
The CNBC Investing Club downgraded Nvidia to a 2 rating after the stock fell nearly 10% over two sessions during an investigation into Jensen Huang's affair with an accused Chinese spy. Jim Cramer criticized the company's disorderly handling of the inquiry and noted that broader data center pressures emerged following Democratic midterm victories. Seeking stability, Cramer plans to reallocate capital toward Constellation Brands once its share price declines enough to improve his cost basis. He also anticipates that oil dropping below $90 per barrel could cool inflation and prompt a smaller Federal Reserve rate hike.
Key points
- The CNBC Investing Club shifted Nvidia to a hold-equivalent rating due to governance unce…: The CNBC Investing Club shifted Nvidia to a hold-equivalent rating due to governance uncertainty and disorderly board processes.
- Capital is being rotated out of data center tech and into consumer staples that benefit f…: Capital is being rotated out of data center tech and into consumer staples that benefit from improved household discretionary spending.
- Softening energy prices could make October the final severe consumer price index report a…: Softening energy prices could make October the final severe consumer price index report and encourage a smaller Federal Reserve rate hike.