Inventory problems at Children's Place could benefit our red-hot off-price retail stock
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. We're no longer recording the audio, so we can get this new written feature to members as quickly as possible. Here is Friday's edition. We came across a couple of interesting notes from Bank of America research Friday afternoon as we watch to see whether the S & P 500 can closed above 5,000 for the first time ever. Inventory issues: One looked at the debacle at the Children's Place , which lost about half its market cap Friday after saying that it's working with advisors and lenders to improve liquidity and strengthen its balance sheet. The announcement comes after a big miss on margins due to higher levels of promotional activity. In order to end the year clean, the company will likely need to liquidate inventory, and Bank of America thinks off-price retailers like Burlington and Ross Stores as well as Club name TJX Companies (T.J. Maxx, Marshalls and HomeGoods) will be natural winners from the woes facing The Children's Place. "We see this as a good opportunity for BURL, ROST and TJX to build share in kid's and baby, particularly with a lower income consumer interested in branded goods," Bank of America said. TJX shares hit a new all-time high Friday and were knocking on the door of $100, which is our Club price target. We have our buy-equivalent 1 rating on TJX stock. Chip design: The other note was about the media report that said Club name Nvidia may look to enter the custom artificial intelligence chip market. Bank of America thinks this could be a "long-term competitive risk" for the current leaders Club name Broadcom and Bullpen name Marvell but doesn't think there's any near-term risk for them because these conversations can take years and they have the networking expertise. Sector spotlight : Consumer staples were the second worst performing group and most of the damage was concentrated in the food stocks. "I'm very worried about any packaged goods company because of the Pepsi number. People are snacking less because they are leaving home to go back to the office." Jim Cramer said Friday. PepsiCo was down 3% in afternoon trading. One of the few bright spots in staples this session was Estee Lauder . The stock was on pace to break a three-day losing streak that started after Monday's 12% surge in reaction to more cost cuts and CEO Fabrizio Freda declaring the company was at a positive inflection point . "I thought the bad number from L'Oreal would have brought EL down, but I'm beginning to be a believer," Jim said. Next week: There are no companies in the portfolio reporting earnings next week. But there are still 61 companies in the S & P 500 and two stocks in the Dow reporting – still plenty to sink our teeth into. Some notable names are Cisco Systems , CocaCola , Airbnb , DraftKings , Applied Materials , Molson Coors , and MGM Resorts . On data the side, we'll get two key inflation reports: the consumer price index (CPI) on Tuesday and the producer price index (PPI) on Friday. Sandwiched in between Thursday is retail sales. Among the earnings on tap, Dow stock Cisco is one to watch after Reuters reported the networking equipment company plans to lay off thousands of jobs next week as part of a restructuring plan. Most stocks have rallied on layoff news, but then again if you bought Snap on its layoffs announcement you would've gotten crushed by bad earnings. "I'm not sure if Cisco layoffs is a good omen because the stock didn't bounce when it announced had have a deal with Nvidia, the kingmaker in AI" Cramer said. (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.

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. We're no longer recording the audio, so we can get this new written feature to members as quickly as possible. Here is Friday's edition.