It was another brutal week for the market. The major stock benchmarks nosedived in the final hours of Thursday’s session on concern about the next day’s consumer price index release. The selling accelerated Friday when that price data for the month of May came in hotter than expected, now rising at the fastest clip since 1981 and putting a pin in the narrative of peak inflation. While it is easy to be negative — there are plenty of things to point to — there’s also good reason to be a bit more upbeat and constructive. For starters, we’ve seen positive investor reaction to negative updates from Nvidia (NVDA), Microsoft (MSFT), and Salesforce (CRM). We even saw Target (TGT) recover some losses after reporting a bad quarter and downward revision to its forecast a few weeks later; it has since given up much of that bounce in the recent sell-off. It’s nearly impossible to call a market bottom, and we’re not in the business of trying to do that. But seeing how investors are less fazed by bad news, versus just a month ago, strengthens our conviction to keep searching for opportunities as other investors indiscriminately sell the good with the bad. Our preference is to buy energy and healthcare names. Energy will benefit more from inflation, while healthcare is a safe haven in a slowdown, given the critical nature of its products. But we also see opportunities in technology stocks — which aren’t typically thought of as defensive plays — simply because they’ve become too cheap to not nibble on. For example, we bought some shares in Meta Platforms (META) this afternoon, with the understanding it will require patience. A significant bounce back will require definitive signs of peak inflation, but we believe longer-term Meta is a great name to own. No sectors were able to escape the carnage, with all of them closing in the red, led to the downside by financials , followed by technology and real estate. The U.S. dollar index popped to over 104. Gold advanced to the upper $1,800-per-ounce region. West Texas Intermediate crude , the American oil benchmark, held at around $120 per barrel. The yield on the 10-year Treasury surged to around 3.15% following that stronger than expected consumer inflation reading. As we’ve noted, the direction of the 10-year yield has been holding the stock market hostage. Week in review It’s hard to find stocks and sectors that can hold up in this inflationary environment, which has sparked worries about whether the Federal Reserve can arrest the price spiral without sending the economy into a recession. We believe oil and health care are places to hide. Along with the Meta Platforms buy noted above , we bought 50 more shares of Pioneer Natural Resources (PXD) on Tuesday, an energy company with no hedges in place that can benefit directly from what we continue to think will be elevated crude prices given Russia’s war in Ukraine and China’s rolling lockdowns in its battle achieve zero Covid. We were restricted on Johnson & Johnson (JNJ), but we let members know that we would have been buyers Friday if our Club rules didn’t prohibit us. Healthcare companies can be somewhat immune to tough economic times because people still need the medicines and the products that a J & J provides. No Club portfolio companies reported earnings this week. Though there were some developments of note. Devon Energy (DNV) announced a deal that will add to earnings, shareholder returns and oil production right away. Constellation Brands (STZ), one of our recession-resistant stocks, was the subject of positive commentary on Wall Street related to strong Mexican beer imports. Constellation counts Corona, Modelo, and Pacifico as the cornerstone of its beer business. In addition to Friday’s CPI, the preliminary June reading for the University of Michigan consumer sentiment index came in well below expectations, hitting a record low. On Thursday, initial jobless claims for the week ending June 4 came in at 229,000, missing expectations of 210,000. On Wednesday, The Fed’s monthly credit report found that revolving credit, which mostly includes credit card balances, jumped nearly 20% in April from the previous month to $1.103 trillion, breaking a pre-pandemic record of $1.1 trillion. What’s ahead In the coming week, no club stocks will be reporting earnings. But here are some other earnings reports and economic numbers to watch, not to mention the biggest event of the week: the Fed’s meeting. Monday, June 13 After the bell: Oracle (ORCL) Tuesday, June 14 Before the bell: Core & Main (CNM) After the bell: Sprinklr (XCM) 8:30 a.m. ET: Producer price index (May) FOMC’s two-day June meeting begins Wednesday, June 15 8:30 a.m. ET: Retail sales (May) FOMC meeting ends with 2 p.m. ET interest rate announcement — a 0.5% hike is expected — and a 2:30 p.m. ET news conference from Fed Chairman Jerome Powell . Thursday, June 16 Before the bell: Kroger (KR), Jabil (JBL), Commercial Metals (CMC) After the bell: Adobe (ADBE) 8:30 a.m. ET: Initial jobless claims (week ended June 11) 8:30 a.m. ET: Housing starts & building permits (May) Friday, June 17 9:15 a.m. ET: Industrial production & capacity utilization (May) (Jim Cramer’s Charitable Trust is long PXD, JNJ, DVN and STZ . See here for a full list of the stocks.) 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.
