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. Stocks tumble: It’s another tough day on Wall Street with the S & P 500 giving back roughly all its gains from Wednesday and for the week. Treasury yields are tumbling, sending the yield on the benchmark 10-year note below 4% for the first time since February. Thursday’s action appears tied to a batch of weak economic data released in the morning, most notably initial jobless claims and U.S. manufacturing activity for July. It’s fueling concerns that the Federal Reserve needed to start cutting rates at its meeting that concluded Wednesday, rather than waiting until September at the earliest. That’s why some classic slowdown stocks in the health care and consumer staples sectors are outperforming versus cyclicals. When Club holding Procter & Gamble is rallying nearly 3% Thursday, even after a so-so quarter earlier this week, you know the market is worried about growth. Conversely, some of our stocks tied heavily to economic expansion are taking it on the chin. Wells Fargo is down roughly 4%, as is Stanley Black & Decker . Casino worries: Wynn Resorts is having an especially rough day, down about 5%, in reaction to MGM Resorts , which fell more than 10% after reporting earnings Wednesday night. Although MGM’s sales and EBITDA topped Wall Street estimates in Las Vegas and the Chinese gaming hub of Macau, it was the commentary that raised concerns. Principally, the company said bookings tied to the Formula One race in November are off to a slower-than-expected start, pressuring room rates. That update caused MGM to give up its initial gains in extending trading Wednesday night and plunge. We don’t think the move is all about F1. It’s only one weekend within a broader quarter. And if you read the whole conference call, you would hear MGM say upbeat things to say about Vegas, such as room rates up year over year for every month in the third quarter. Also, the recent closing of the Mirage could be a tailwind for other casino operators, taking off approximately 1.5 million room nights. However, we take this news as another troubling sign of a slowdown in discretionary spending as consumers become more selective on spending their hard-earned money. Adding to the pressure was a soft July Gross Gaming Revenue figure reported out of Macau earlier Thursday. Due to these headwinds, we are downgrading our Wynn rating to a 2. It’s tough to downgrade Wynn at these prices, especially with shares trading at a big discount on an enterprise value-to-EBITDA basis compared with 2019 levels. The company’s ridiculously cheap valuation is the main reason why we’ve held onto this small position. But the market has wanted nothing to do with Macau-related stocks for a while, and we struggle to identify a catalyst for a change. This earnings season has been a nightmare for anything associated with China. And now if there is some caution about Vegas later this year — whether it be one-off related or due to concerns about a pullback in discretionary spending — Wynn becomes even tougher to own. The market certainly may be overreacting to the F1 commentary considering the race is still months into the future. But with Wynn earnings coming up Tuesday, we’d rather be cautious and downgrade our rating. We also cannot rule out the possibility of this position becoming a source of funds to buy better-performing companies that have been hit hard by this market volatility. When the market gets volatile — tossing out the good with the bad and causing many stocks to move well off their highs — we like to “upgrade” the portfolio by selling our losers and focusing on the high-quality companies with stronger fundamental performance. The highest-quality stocks are always the ones we can count on to rally once this volatile stretch ends. Up next: In a big week of earnings, Thursday night is the biggest yet. Apple and Amazon are set to report alongside fellow portfolio names Nextracker and Coterra Energy . We’ll be out with our analysis on Apple, Amazon and Nextracker later Thursday, followed by Coterra on Friday because the company’s conference call isn’t until 9 a.m. ET that day. Other key reports Thursday include Intel , Coinbase , DraftKings , Roku , Block and Cloudflare . Friday morning we’ll see the reports from Club holding Linde and U.S. oil majors Exxon Mobil and Chevron . On the economic data side, there is the July nonfarm payroll report, which is expected to show a 175,000 increase in jobs, a steady unemployment rate at 4.1%, and a 3.7% year-over-year increase in average hourly earnings, according to estimates compiled by FactSet. (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. 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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.
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