We're selling two tech stocks to raise more cash in tricky market with event-driven overhangs

Published Thu, May 4 20238:26 AM EDTUpdated Thu, May 4 20238:36 AM EDT

Shortly after the opening bell, we will be selling 100 shares of Salesforce (CRM) at roughly $192.50 each and exiting our small position in Qualcomm (QCOM), selling 230 shares at roughly $103.89. Following Thursday's trades, Jim Cramer's Charitable Trust will own 250 shares of CRM, decreasing its weighting in the portfolio to 1.85% from 2.55% and will no longer hold a position QCOM. We are making more sales Thursday morning and increasing our cash position even higher to get more defensive into the market gauntlet that lies ahead. Early in the week, we said to raise cash ahead of what could be a difficult setup in the market as it grapples with four big potential negatives: the Fed Meeting, Apple (AAPL) earnings after the bell, the non-farm payroll report on Friday, and finally, ongoing uncertainty related to the debt ceiling . We just got through the first big hurdle Wednesday with the Fed raising rates by 25 basis points, as expected. But unfortunately, higher rates and the continued lack of certainty around insured bank deposits is putting additional pressure on the regionals Thursday morning. As we know from March, the market tends to struggle when there is an all out assault on the regionals. There will be a time to start buying some of our favorite names again, but we are still too early in the gauntlet. We've made significant strides in raising cash over the past two weeks, but we'd like even more. QCOM 5Y mountain Qualcomm YTD performance As for what we are selling, we are moving on from our Qualcomm position. After making several sales early this year at prices in the $120s and multiple times in the $130s , we decided to keep a very small, "tag end" sized position in the portfolio in case the handset market bottomed sooner than expected. This did not materialize Wednesday evening, partly due a slower-than-expected recovery in China . With the rebound in Qualcomm's handset business still a few quarters away and its auto business not ramping up fast enough to diversify the chipmaker's revenue streams, we are moving on from the position at a loss of around 20% on our last remaining shares. CRM YTD mountain Salesforce YTD performance As for Salesforce , the stock has had a great run year to date, gaining more than 45% thanks to management's commitment to driving margins higher and offsetting dilution through a big buyback. Given our concerns about the market, we want to lock in a sale here in the $190s and downgrade our 2 rating . In what could be bad tape Thursday morning, we think Salesforce could outperform on its news of the integration of a conservational AI bot, SlackGPT, into its Slack product. Lastly, we would be trimming our Procter & Gamble (PG) position if our trading restrictions allowed us to. Shares of this household product company have had a nice run over the past few weeks, rallying from the high $130s into the mid-$150s thanks in part to a strong quarter , where organic sales increased 7% driven by stronger pricing and gross margins finally inflected positively after getting crunched by inflationary costs. In what has been a tricky market lately, P & G has been resilient thanks to the defensive nature of its business. This is why bought shares in the first place and continued to add at much lower prices when the stock was out of favor. But given the strong move lately and the large size of our position, we believe it is prudent to raise more cash by trimming the name. (Jim Cramer's Charitable Trust is long CRM, QCOM, AAPL, PG. See here for a full list of the stocks.) 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.

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