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September has been unkind to stocks – living up to its historical reputation as the weakest month for the S & P 500 . This time around, the bond market has been a major culprit for Wall Street’s pullback, according to Jim Cramer. The S & P 500 shed 4.33% between Sept. 1 and Friday’s close, even as it edged up in afternoon trading Monday. The stock benchmark is coming off its worst week since March , dropping nearly 3%, amid fresh fears that the Federal Reserve could keep interest rates higher for longer. “In an uncertain corporate world, where the Federal Reserve is not going to let up, despite what so many strategists and hedge fund managers think, it’s difficult to have much confidence in stocks,” Jim wrote Sunday in his weekly column. “Treasurys are our nemesis,” with higher yields making government bonds more competitive with equities, he argued. The yield on the 20-year Treasury climbed to 4.82% on Monday, from 4.39% on Aug. 31. Meanwhile, the yield on the benchmark 10-year Treasury is hovering around 4.52% — its highest level since late 2007 — up from 4.09% on Aug. 31. Bond yields tend to move inversely to stock prices. Still, some Club stocks have been able to buck the downward trend since the start of the month — and none more so than Humana (HUM). The health insurer advanced 7.3% through Friday’s close, putting it among the top-10 performing stocks in the S & P 500 over that stretch. Five out of the top 10 are health-care companies, including No. 1 performer Centene Corp. (CNC), CVS Health (CVS), Molina Healthcare (MOH), and McKesson Corp. (MCK). HUM .SPX mountain 2023-09-01 Humana’s stock performance in comparison with the S & P 500 since Sept. 1, 2023. In a year largely characterized by outperformance in technology stocks, health care has been one of the worst S & P 500 sectors . But it’s also long been viewed as one of the more defensive parts of the stock market, making it ripe for a comeback during shakier times for equities. After Humana, Costco Wholesale (COST) and Ford Motor (F) have been the second- and third-best performing Club stocks since Sept. 1, gaining 2.6% and 2.4%, respectively. The resilience in Costco’s stock comes ahead of its fiscal 2023 fourth-quarter results, which are set to be released after the close Tuesday. Costco, a longtime Club holding, is one of the best-run retailers in the world, with a membership model and value-oriented reputation that is well-suited for any economic climate. COST .SPX mountain 2023-09-01 Costco’s stock performance compared with the S & P 500 since Sept. 1, 2023. Meanwhile, Ford’s outperformance comes as Detroit automakers – including Ford, General Motors (GM) and Chrysler parent Stellantis (STLA) – are engaged in bitter labor talks with the union that represents about 146,000 employees across the three companies. The United Auto Workers on Friday expanded its targeted strikes to cover additional facilities operated by GM and Stellantis, but is currently only striking at one Ford facility. UAW chief Shawn Fain said Friday that Ford is “serious about reaching a deal.” For its part, Ford on Sunday said that “significant gaps” between both sides must be closed before an agreement can be reached, according to Reuters . F STLA,GM mountain 2023-09-01 Ford Motor’s stock performance since Sept. 1, 2023, compared with General Motors and Jeep parent Stellantis. Ford shares, which have outperformed Stellantis and GM in September, on Monday rose nearly 2%, to around $12.68 apiece. The other two Club stocks with positive performances – albeit slightly – since Sept. 1 are Meta Platforms (META), up 0.9%, and Honeywell International (HON), up 0.7%. Meta, which entered Monday’s session up nearly 150% year-to-date, is holding its annual virtual-and-mixed reality conference on Wednesday and Thursday. Jim has said he expects “big things” from the event , known as Meta Connect. The stock’s strongest session this month came on Sept. 11, the day after The Wall Street Journal reported that the Instagram and Facebook parent was developing a more robust artificial intelligence model than what it announced in July . Shares of Meta were flat Monday, at nearly $299 each. Honeywell’s outperformance in September stands in contrast to the industrial conglomerate’s otherwise underwhelming year. The stock entered Monday’s session down more than 11% in 2023, the third-worst of any Club stock. But one positive development this month was newly installed CEO Vimal Kupar’s presentation at a Morgan Stanley conference on Sept. 12. Kupar, who replaced Darius Adamczyk in June, said a priority for the company was identifying ways to “rejuvenate” its portfolio. As Jim said during last week’s Monthly Meeting , we’re looking forward to hearing more from Kupar on his strategy for the firm. (Jim Cramer’s Charitable Trust is long HUM, COST, F, META and HON. 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.
People walk near the New York Stock Exchange on July 18, 2023 in New York City
View Press | Corbis News | Getty Images
September has been unkind to stocks – living up to its historical reputation as the weakest month for the S&P 500. This time around, the bond market has been a major culprit for Wall Street’s pullback, according to Jim Cramer.
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