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. The S & P 500 fell after the Federal Reserve raised interest rates by 25 basis points , the first hike in overnight borrowing costs in more than three years. The decision was unanimous. The Fed said in its policy statement that the rate hike “will support a timelier return” to the central bank’s policymaking committee’s 2% inflation target. The nation’s inflation rate has been running hotter than 2% for many years. Based on the updated “dot plots” in the Fed’s quarterly Summary of Economic Projections, most central bankers expect one more rate increase before the end of the year. During his post-meeting news conference, Fed Chairman Kevin Warsh said that “inflation is too high and has been for too long,” adding that Wednesday’s rate hike reflects the central bank’s commitment to reducing inflation. Warsh said that the U.S. economy appears to be strengthening but faces headwinds from geopolitical uncertainty. Starbucks is considering selling a majority stake in its Japan operations in a deal that would value the business at about $3 billion, according to a report from Reuters. This is not a new story. We first heard this back in June from Bloomberg. What’s different now is that Bloomberg reported the business could be valued at $2.5 billion, so we like the slightly upgraded terms. Japan is Starbucks’ largest international company-operated market — with 1,883 stores at the end of last fiscal year — and was called as a source of strength in the company’s July earnings call. So why sell a stake? Even though the region is performing well, Japan is viewed as a non-core market and a stake sale would be a continuation of an asset-light licensing model that got started in April, when CEO Brian Niccol sold a stake in Starbucks’ China business and formed a joint venture with Boyu Capital. A deal for its Japan operations will keep the company focused on its U.S. turnaround while providing a cash infusion it can use to invest in stores and technology, repay debt, or even repurchase stock. Shares of Starbucks are slightly higher Wednesday afternoon; at their highs of the day, before the Fed decision, the stock was up about 1.65%. GE Vernova is one of the biggest gainers in the portfolio on Wednesday, up more than 4%, after CEO Scott Strazik gave a bullish presentation at the Morgan Stanley Laguna Conference. It’s a much-needed jolt for shares of the gas turbine maker, which entered Wednesday down almost 20% since mid-August, as concerns mounted around the sustainability of the artificial intelligence buildout. Here are some of the most important comments from the CEO. Strazik said the company is on track to reach its $200 billion backlog target “very early in 2027,” based on “the strength of the orders we expect to see in the third quarter.” Its backlog stood at $176 billion at the end of June. Strazik’s emphasis on achieving the goal early next year is notable because details on the timing had previously been a more general “in 2027.” Since Vernova’s July earnings call, Strazik said the company has agreed to multiple slot reservations for 2032 deliveries, an encouraging sign of the durability of demand for its supply-constrained turbines. While there have been questions about how long Vernova can maintain pricing power as the company adds manufacturing capacity, Strazik said new turbine supply that became available this summer for 2030 and 2031 delivery has seen a “very strong market response … at premium pricing.” All 12 gigawatts of new supply for those two years “is in some form of contracting,” he said. Vernova plans to hold an investor day next year where it will set its 2030 financial outlook, Strazik said. “But frankly, we’ll spend a lot of that meeting on why we have so much conviction that 2030 to 2040 is an even better decade for us than 2020 to 2030,” he said. Some of that optimism likely stems from the growth of Vernova’s services business, which covers repairs and other maintenance once turbines are installed by customers. Services revenue is more steady and predictable than equipment orders. Late last year, the company projected that its power services revenue in 2035 will be at least $22 billion, up from $12 billion in 2025. On Wednesday, Strazik said its 2030 projection at its future investor day “will certainly make the 2035 marker of $22 billion look low.” After Wednesday’s closing bell, homebuilder Lennar reports quarterly results. While there are no major earnings before the opening bell on Thursday, we will get new data on jobless claims, housing starts and building permits, and pending home sales. (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.
Fed delivers its first hike in 3 years. Plus, what’s moving Starbucks and GE Vernova