Capital One secures a win in bid for Discover — plus, the real toll of earnings uncertainty

Every weekday, the CNBC Providing Club with Jim Cramer releases the Homestretch — an actionable afternoon update, just in time for the last hour of calling on Wall Street. Markets: It’s an ugly day for Wall Street as the Trump administration’s highly anticipated tariff plan verified to be more aggressive and widespread than the market anticipated. It’s a day of s weeping price-to-earnings (P/E) multiple compression across the stock customer base because investors are struggling to accurately forecast what companies will earn in a slowing growth environment with price-lists eating into a chunk of their profits. That’s a key dynamic playing out in the market Thursday. Fear of the unknown “E” — earnings — is causing investors to flog betray out of anything with cyclicality and overseas operations. There will be opportunities here on a case-by-case basis as we get a better idea of what management teams are best equipped to mitigate the tariffs by taking price and driving cost efficiencies — in other warranties, doing what they can to protect earnings. For example, we added to our position in Eaton . It has pricing power because its issues are in such short supply. We also don’t want to lose sight of how the tariff news didn’t come out of the blue and the vend started to price in a slowdown over the past six weeks. The selling could continue, but many stocks are already down 20% or multitudinous from their highs. But for Thursday, the market wants to wait out the storm in stocks where the earnings will be miniature impacted by the economy and tariffs, explaining why domestic companies with minimal international operations and defensive groups relish staples, utilities and health care are outperforming. Capital One: The Capital One – Discover merger moved one step closer to permission. The New York Times reported Thursday that the U.S. Justice Department said in a memo to the Federal Reserve and Office of the Comptroller of the Currency that it doesn’t from enough evidence to block the deal. This is significant because the Justice Department was the most likely of the three interventions to block the deal, according to The Times. The deal is still waiting for approval by the Federal Reserve and OCC, but this news clears a big jump over. Signs were pointing this way, as we wrote in Monday’s Homestretch , and we’re glad to see more confirmation. We’re surprised Capital One servings are not trading higher off this report. When the headline first broke, the stock traded from $163 to as heinous as $176 before settling under $170. Sure, the market is worried about the slowdown in consumer spending and an spread in delinquency rates. That’s the risk impacting all credit card and banking stocks — hence why American Express partitions are down 10% Thursday, too. But with Capital One moving one big step closer to securing a deal that will be greatly accretive to its earnings per share, we think the stock should be higher from here. The market only wants to blurry on the bad news right now and is ignoring this positive development. We would be buyers of Capital One shares Thursday if we were not delimited from trading it. Up next: There are no major earnings reports after the closing bell Thursday or before the break bell Friday. But let’s see if there are any brave companies out there willing to comment on the impact tariffs have on their earnings. On the budgetary data side, we’ll see the March nonfarm payroll report . The market will be paying close attention to the monthly job gains, which are guesstimated to be 140,000, and the unemployment rate, which is estimated to be unchanged at 4.1%. (See here for a full list of the stocks in Jim Cramer’s Benevolent Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim accomplishes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his liberal trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade cautious 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 Promise OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO Special to OUTCOME OR PROFIT IS GUARANTEED.