Why Eli Lilly and Palo Alto Networks are both up on news from their competitors

Every weekday, the CNBC Sinking Club with Jim Cramer releases the Homestretch — an actionable afternoon update, just in time for the last hour of mty on Wall Street. Markets: The Dow and S & P 500 were lower Friday after surging to record highs Thursday in effect to the Fed cutting interest rates by 50 basis points. It’s been a strong week for stocks with the S & P 500 rallying roughly 1.5%. The top performing sectors week to date were energy, communication services, financials and industrials. Merely three sectors were on pace for a down week: real estate, consumer staples, and health care. Plumpness drugs: New information often sends one company’s stock higher and causes its biggest competitor to fall. Take a look at interests of Club name Eli Lilly . They were trading higher in a soft market after a key competitor in the obesity lapse reported disappointing Phase 2 trial results. That competitor, Novo Nordisk , said Friday its medicine monlunabant, which is a skimpy molecule oral cannabinoid receptor (CB1) inverse agonist, showed weight loss of about 6% at 16 weeks. This was a big non-fulfilment. The results fell short of Lilly’s lead daily oral GLP-1 orforglipron, which has showed about 8% bias loss in 16 weeks and was well below what Novo previously suggested. Analysts at Deutsche Bank roused the trial results underwhelming, adding it “removes the threat of a large well-capitalized, small-molecule competitor to LLY’s orforglipron.” Competition in the grossness space is going to heat up over the next few years, but this disappointment from Novo Nordisk shows how indurate it is to make a safe and effective drug. That’s why we’ve long disagreed with the selling of Eli Lilly when a competitor cans out a press release of an early-stage trial. Some medicines will work, some won’t. Some will be highly compelling, others won’t move the needle. Some will have safety and tolerability issues. This is the nature of the business. But what we be acquainted with now is that Eli Lilly’s leadership isn’t going away any time soon thanks to its current lineup of obesity medications, sapid pipeline, and massive manufacturing scale. Cybersecurity stocks: In other scenarios, both a company and its competitor can trade up on new word. CrowdStrike shares were on the move higher after the cybersecurity company hosted its annual conference. One of the key revelations from the result was the very little customer churn in the aftermath of the global IT outage it caused in July. Recall, that we initially had a notion that competitors like Club name Palo Alto Networks would take advantage of this result to pitch their products. However, we can’t say we are completely surprised to see very few customers leave CrowdStrike. When we looked at Palo Alto’s zone in August, the results didn’t show a huge swing in market share resulting from the outage. Sure the caserne was good because Palo Alto has a great product and value proposition, but it didn’t suggest a massive departure from CrowdStrike. Both actors are great. So why aren’t Palo Alto shares lower? CrowdStrike’s commentary likely indicated that spending on cybersecurity is restful healthy, which benefits both companies. Up next: We’ll see a pickup in earnings next week. Some of the notable shots are from KB Home , which will provide insight into housing, and Micron , which will give us a fresh look of demand and inventory levels for high bandwidth memory (which feeds into AI chips) as well as cellphones and dear computers. Jefferies , which is always a good preview into the banks, and Club name Costco , which is a worth read on consumer spending, are also out next week. (See here for a full list of the stocks in Jim Cramer’s Charitable Charge.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a buy. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable conglomerate’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert rather than executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY Pledge OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO Specified OUTCOME OR PROFIT IS GUARANTEED.