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. Nvidia’s warning is a reset The bad news didn’t tank the market The Inflation Reduction Act could be bad for the market 1. Nvidia’s warning is a reset Nvidia (NVDA) said in a preliminary financial results report that it expects second-quarter revenue to be $6.7 billion, below its initial guidance for $8.1 billion. The company attributed the miss mostly to weaker-than-expected gaming revenue, down 33% from the year before due to macro headwinds. We believe this preannouncement serves as a clearing event aimed at resetting expectations. Investors can now approach the stock with a bit more certainty about what to expect in coming quarters. We don’t think there is a rush to step in right here despite today’s decline. Shares are up roughly 25% since bottoming on July 1, and sell-offs on this kind of news can last a few days. While shares of Advanced Micro Devices (AMD) fell a little bit on the news, the recent AMD results suggest it is far more resilient to this macro downturn and consumer end market challenges, thanks to strong data center and embedded revenues tied to the Xilinx deal. 2. The bad news didn’t tank the market Stocks gained early Monday despite Nvidia’s warning, but have since lost those gains and are trading flat. Still it was a surprise. “What’s so fascinating about Nvidia is that if this number in their preannouncement came out say a month ago, it would be taking down the entire market,” said Jeff Marks, the Club’s director of portfolio analysis. This could be a good sign for a market that has struggled this year due to skyrocketing inflation, the Federal Reserve’s interest rate increases, Russia’s invasion of Ukraine and Covid lockdowns in China. The market’s resilience also bodes well for legendary market technician Larry Williams’ earlier prediction that the market will rally through August. In addition, Club holding Disney (DIS) reports later this week. The stock was up on Monday. We believe that could be a sign that there’s too much froth in the market — or that the stock never should have come down from $180. 3. Senate’s Inflation Reduction Act could hurt stocks The Senate on Sunday passed the Inflation Reduction Act , a Democrat-backed package encompassing funding to combat climate change and extend healthcare coverage. The legislation has several parts that impact drug companies, including allowing Medicare to negotiate prices with drug companies, putting a cap on insulin prices for seniors on Medicare and putting a 15% minimum tax on large corporations. Because it seems like there will be a pecking order to which companies get affected by this legislation , and some of the drugs in question will have experienced generic and biosimilar competition by the time it goes into effect, we have not yet made a decision to trim our holdings in our pharma names like Johnson & Johnson (JNJ). However, we believe we will have to make some adjustments, because the market has been on a tear lately. We believe that shares of the drugmakers haven’t yet felt the impact of this bill because there’s confusion surrounding it, and its contents were unknown by the general public until recently. “As an environmentalist, I am thrilled for this [legislation]. As someone who wants you to make more money in the stock market, I can be anything but thrilled,” Cramer said. (Jim Cramer’s Charitable Trust is long AMD, META, AAPL, DIS, GOOGL, AMZN, JNJ, HUM, and NVDA. 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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