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. Slow start: The S & P 500 is lower to start the new week but well off its worst levels of the session. The dip follows the S & P 500’s 1.5% pullback last Friday in reaction to the stronger-than-expected December jobs report. The yield on the 10-year Treasury is relatively unchanged after spiking last Friday and briefly touching 4.8% on Monday. Technology stocks felt most of the pain due to higher interest rates and continued profit taking after a strong 2024. Lilly strikes a deal and talks up its pill: There’s always a flurry of M & A activity around the JPMorgan Healthcare Conference. The main headliner Monday is Johnson & Johnson’s $14.6 billion deal to buy Intra-Cellular. This acquisition increases J & J’s presence in the neuroscience market. In smaller M & A news, Eli Lilly said it plans to buy Scorpion Therapeutics’s experiment cancer treatment in a deal that could total $2.5 billion in cash if certain regulatory and sales milestones are met. Scorpion Therapeutics is a privately held biotech. Eli Lilly is boosting its oncology pipeline by acquiring a once daily oral, mutant-selective PI3Kα inhibitor currently being evaluated in a Phase 1/2 clinical trial for breast cancer and other advanced solid tumors. In other news, Eli Lilly CEO Dave Ricks told Bloomberg TV Monday that he expects the company’s oral weight loss pill, called orfoglipron, will be approved in early 2026. Ricks plans to release Phase 3 data by the middle of this year. Weight loss pills have a lot of potential within the obesity market for two reasons: convenience (it’s much easier on the patient to take a pill than inject oneself with medicine); and the relative ease of manufacturing and scaling the medicine. The key bottleneck in the obesity supply chain is those auto-injector pens. An oral GLP-1 medication with similar efficacy and safety to Mounjaro/Zepbound and Novo Nordisk’s drugs should be very lucrative to Eli Lilly. Honeywell breakup coming? It appears a split is on the way. Shares of the industrial conglomerate rose in midday trading after Bloomberg reported the company plans to go ahead with activist Elliot Management’s plan and separate its aerospace business from its automation business. The report says the company is expected to announce the split with its fourth-quarter results on Thursday Feb. 6. We’ve backed Elliott’s push and agreed Honeywell should break up due to the shareholder value that has been created by other aerospace-related breakups at GE and the old United Technologies (now known as RTX Corporation). More-focused entities are what is necessary to get the company’s inconsistent business fundamentals back on track. Up next: After the closing bell Monday, we’ll see earnings from the homebuilder KB Home . Also check out Cramer’s “Mad Money” interview with Bristol-Myers CEO Chris Boerner from the JPMorgan’s health conference. There are no major earning reports before the opening bell Tuesday. On the data side, the key report is the producer price index (PPI), which measures inflation from the perspective of the seller. The consumer related inflation report (CPI) will be released Wednesday. (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.
Dave Ricks, chair and chief executive officer of Eli Lilly and Company speaks to the Economic Club of New York in New York City, U.S., March 12, 2024.
Mike Segar | Reuters
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.