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. Stocks continued to slide Tuesday, with rising oil prices and bond yields driving much of the selling. The market added to its losses around noon ET after the U.S. Central Command said American forces began striking Islamic Revolutionary Guard Corps targets in Iran. The news sent U.S. oil benchmark WTI crude to $90 per barrel and the 10-year Treasury yield to its highest level since January 2025. With our cash position building to more than 16% of the portfolio, we are looking for new defensive ideas with cheap valuations and solid dividend yields. Accordingly, we are adding two names to the bullpen: Kimberly-Clark and CVS Health . We originally added Kleenex and Huggies parent Kimberly-Clark to the Bullpen last November, but took it out after we added rival Procter & Gamble to the portfolio. Though we could turn back to P & G, we currently prefer Kimberly because it has a catalyst in the soon-to-do-closed acquisition of the consumer health company Kenvue , the Band-Aid parent and former division of Johnson & Johnson . KMB shares currently trades at 14 times earnings estimates and sport a 4.77% dividend yield, which are characteristics we value in this market. KMB YTD mountain Kimberly-Clark’s year-to-date stock performance. We would also prefer it if we had more healthcare stocks in the portfolio; Eli Lilly has been a long-term winner, and we’ve caught solid gains in J & J and Cardinal Health this year. Now CVS Health has our attention. The company has really found its stride under the leadership of David Joyner, who has brought operational discipline to the company and has improved its Aetna insurance business. We also think CVS Health’s retail pharmacy business has benefited from bankrupt Rite Aid’s exit from the market and Walgreens’ ongoing store closures. CVS shares had a great run through the first seven months of the year, but tumbled from $104 to $99 on Aug. 5 and have mostly drifted lower since. Despite turning in a strong earnings beat of $2.58 versus analyst estimates of $1.85, the stock pulled back after management’s earnings call commentary regarding expectations for 2027 earnings. CVS said that $8.44 was the earnings per share “floor” for 2027, which implies year-over-year EPS growth 13% on an adjusted baseline figure of $7.46 in 2026. The problem was that this outlook was merely in line with Wall Street consensus, so analysts didn’t come out of earnings raising numbers for next year. We often talk about the importance of a “beat-and-raise quarters,” and that second part is where CVS fell short this time around. What the market didn’t fully contemplate was a headwind from a federal drug discount program within Caremark, its pharmacy benefit manager, as well as lower membership. The company uses an adjusted baseline figure to exclude certain one-time developments. With this bad news out in the open and shares settled around 11 times 2027 earnings per share estimates and a 2.75% dividend yield, the recent dip may be an opportunity to pick up shares in CVS. CVS YTD mountain CVS Health’s year-to-date stock performance. An important earnings night is ahead with Palo Alto Networks and Dell Technologies reporting. We’ll look for Palo Alto to follow in CrowdStrike’s footsteps with strong earnings, but peers’ results may have raised expectations. We took action on Monday, trimming Palo Alto Networks into strength because we were concerned about the expectations game. Dell’s quarter and outlook will also be an important data point for the AI server buildout, while providing insight into how the company is managing higher costs for memory and storage products. Before the opening bell on Wednesday, we’ll see earnings from spirits maker Brown-Forman . (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.
