We're trimming a Fed rate cut play after a recent rally and ahead of earnings

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We're not calling for an earnings miss — just protecting against any disappointment in the commentary.

We're selling 150 shares of Best Buy at roughly $89.33 each. Following Monday's trade, Jim Cramer's Charitable Trust will own 950 shares of BBY, decreasing its weighting to 2.52% from 2.91%. We took a position in Best Buy in late March on the view that it would be a key beneficiary from the launch of artificial intelligence-enabled personal computers and devices.

Specific to Best Buy, we think investors rewarded the stock on the view that lower rates will lead to increased housing formation — and in turn, demand for TVs and appliances. But that won't happen right away, and this earnings season hasn't seen great results from housing-related retailers like Home Depot , Lowe's , and Williams-Sonoma . The current 4.3% annual dividend yield, already pretty attractive, only becomes even more so as Treasury yields come down.

 

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