Why investors should stick with Palo Alto Networks long term
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 Monday’s key moments. 1. U.S. stocks came under pressure Monday amid a rotation out of Big Tech names. The S & P 500 was down 1%, while the Nasdaq Composite lost 1.68% in midmorning trading. The pullback comes after U.S. equities posted a fifth-straight week of gains last week to carry forward November’s stellar rally . Meanwhile, bond yields edged up ahead of a busy week of economic data, including the Labor Department’s monthly jobs report on Friday. The yield on the 10-year Treasury was hovering just below 4.3%. And oil prices ticked up slightly after tumbling around 2% last week, with West Texas Intermediate crude trading at $74 a barrel. 2. With the market again in deeply overbought territory — the S & P 500 Short Range Oscillator is at 7.33% — we raised cash Monday morning by exiting our position in Emerson Electric (EMR). At $90 a share from Friday’s close, Emerson stock has recovered nearly all of its losses from its disappointing earnings report in early November. We’re concerned about execution and integration following a weaker-than-expected outlook and initial accretion from Emerson’s acquisition of National Instruments. The sale takes our cash position to about 9%. And we plan to use those funds to buy more shares of Eaton (ETN) on pullbacks. 3. Club holding Palo Alto Networks (PANW) became the first cybersecurity company to hit $100 billion in market cap . Where does it go from here? Morgan Stanley said a tougher first half of 2024 is ahead due to interest rates, macroeconomic uncertainty and pressure around lower hardware demand. But the setup should improve after that, in part due to new product cycles ramping up and the potential of a firewall refresh in the second half of 2025. On Friday, we downgraded our rating to a 2 after the stock rallied 22% since a post-earnings sell-off. We can’t chase it after that move. (Jim Cramer’s Charitable Trust is long ETN, PANW. 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.
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