Nvidia Reaches Record High as Wall Street Rallies; Boeing Union Approves Contract
Nvidia traded at record levels Friday for the first time since mid-May as Wall Street rallied on lower oil prices and a soft September jobs report. Boeing's white-collar union approved a four-year contract, though an FAA software issue still clouds the stock.
The Nasdaq led the advance, gaining more than 1.5% and touching a fresh record high. The S&P 500 rose about 1%, while the Dow Jones Industrial Average lagged with a gain of roughly 300 points, or 0.6%. Oil prices fell on hopes for an additional release from strategic stockpiles, and the September employment report gave the Federal Reserve more room to hold rates steady at its October meeting.
Jim Cramer said the combination of declining oil and a softer jobs number might suggest a "buy everything" market, but he said that is not what investors are getting, pointing to the Dow's underperformance as evidence. "What we end up doing is we huddle over certain communication services and tech [stocks]," he said.
Nvidia had approached its May intraday peak of $236.54 on several occasions, only to see sellers step in, Cramer said. "Very important. Breaks the double top," he said of Friday's move. Morgan Stanley reinstated Nvidia as its top pick in semiconductors, a call the firm made after client meetings with Nvidia CEO Jensen Huang and CFO Colette Kress. "Morgan Stanley has got a pretty good reputation on these stocks," Cramer said.
Cramer said he believed Nvidia management "laid out that the best thing to own is their own stock," referring to the $150 billion in additional buyback firepower the company announced Monday. "The buyback is going to be really big," he said.
Boeing drew a separate piece of good news. Members of the Society of Professional Engineering Employees in Aerospace agreed Thursday afternoon to Boeing's four-year contract proposal, averting a potential strike by the company's white-collar workers. Boeing shares rose 3.35% on Thursday and traded modestly lower Friday. The favorable union vote followed the company's victory on a Navy fighter jet contract.
Cramer said uncertainty over the Federal Aviation Administration's response to a flight landing software glitch still makes it difficult to recommend Boeing at current levels. He and portfolio director Jeff Marks explained that an outcome delaying delivery of 737 Max planes would "really hurt" Boeing's cash flow.
Stocks covered in Friday's rapid-fire segment were Nike, Airbnb, Seagate and Western Digital. Cramer's charitable trust holds positions in Boeing and Nvidia.