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 are higher on Tuesday, closing out June and the second quarter on a strong note. The S & P 500 rallied roughly 15% in the quarter, while the tech-heavy Nasdaq charged 21% higher. Once again, it was technology and the semiconductors stocks powering the market’s gains. The S & P tech sector was up about 2% in the session, extending the quarter’s run to 30%. Industrials were the second-best performing sector in the second quarter, advancing about 14%. Energy was the lone sector to post a significant loss, finishing the quarter deep in the red. That weakness in energy coincided with a pullback in oil prices from their Iran war-driven highs of the year. Goldman Sachs stock edged lower Tuesday after Oppenheimer downgraded it to a sell-equivalent rating from hold. Oppenheimer’s analyst said that current valuations for investment banks offer little room for upside, especially as the group enters the later stages of its expansionary cycle. Morgan Stanley was downgraded to a sell-equivalent for the same reason. Still, analysts don’t see any near-term threats to Goldman’s stock and even raised their estimates on strength in dealmaking and trading ahead of earnings next month. “While the cycle may well go on for another 12-18 months or more, we’d rather not wait around for the warning signs to appear, and thus particularly in the case of the investment banks, we are more inclined to take the money and run,” Oppenheimer said in the Tuesday note, recommending investors instead buy into alternative asset managers like KKR , Ares Management and Blackstone ; those stocks are all sharply lower this year due to concerns around private credit. One thing to keep in mind is that Oppenheimer originally downgraded Goldman Sachs to a hold-equivalent rating on March 19, 2025, calling for an end of the hope for a M & A recovery. That never played out. M & A was up 40% year over year in 2025, according to the consulting firm Bain & Co., and Goldman Sachs shares have roughly doubled since that call. Jim Cramer couldn’t disagree more with Oppenheimer’s latest call. Sell the stock? Little room for upside? Wrong on both fronts. While we have periodically trimmed our position to right-size it after big moves —that’s our discipline — our long-term bullishness has not deviated. Goldman’s crown jewel investment banking division keeps attracting massive deals. Just look at Monday’s news that Goldman will serve as an advisor on Martin Marietta’s $13.5 billion acquisition of Lhoist North America. The bank also had a crucial role in SpaceX’s record-breaking initial public offering earlier this month. Deals like these mean more revenues for Goldman’s investment banking unit, our main reason for owning the stock. “I think the stock could go to $1,200 in a heartbeat,” Jim said, implying a more than 17% upside from Monday’s close. While Goldman caught a downgrade, Capital One was given an outperform rating and a $254 price target by Piper Sandler. Echoing our thesis in the credit card issuer, Piper thinks the company’s transformation from last year’s Discover Financial acquisitio is not properly reflected in the stock. The analyst points out that Discover historically generated a higher return on equity (ROE) than Capital One. The integration, combined with ongoing operating efficiencies, should enhance Capital One’s earnings power and improve its return profile. While this process is taking a little longer than what we want — and the earnings story has been slightly delayed by management front-loading investments to support the buildout of a global card network — cost synergies will be more apparent next year. Capital One shares aren’t moving on the recommendation (and neither is American Express on a similar call). However, we think COF shares trading at 8 times forward earnings estimates is too cheap for the earnings potential that lies ahead. Our last Capital One buy came two weeks ago when oil prices began to collapse after the U.S. and Iran agreed on a plan to end the conflict and reopen the Strait. Lower prices at the pump should help consumers and the overall economy, which is good for Capital One. After the closing bell on Tuesday, Nike reports earnings. This is a make-or-break quarter in terms of its standing in the portfolio. If managed is forced to take down expectations once again and signal that’s turnaround is taking much longer than anticipated, we may move on from this mistake and take the loss. Modelo brewer Constellation Brands also reports after the closing bell, and General Mills reports before the open on Wednesday. On the economic data side, we’ll see outplacement firm Challenger’s monthly look at job cuts and ADP’s private payrolls report for June. Other reports of note include mortgage applications, ISM’s manufacturing index, and S & P Global’s U.S. Manufacturing PMI. (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. 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Wall Street says sell Goldman, buy Capital One. Here’s where we stand
