Now that investors have gotten through the bulk of earnings season, Jim Cramer thinks it is safe to start making some judgments and spot the positive trends swirling in the market.
So on a down day like Thursday, Cramer took a look at the stocks that are swimming naked against the riptide. Yes, naked stocks.
"I'm talking about any stock that is able to be knocked down by the endless selling in the S&P futures, based—once again—on a confluence of who is being hurt by China's bear market…and who would be hurt by higher interest rates, and the super-freakin' strong dollar. It's a very, very big group," the "Mad Money" host said.
But there are some companies that have been able to keep their heads above water. Those are the standout stocks of the S&P, while everyone else is drowning.
The first group that stood out to Cramer, was the FANG. That stands for Facebook, Amazon, Netflix and Google.
"Tonight's surprise profit reported by Amazon and the concomitant almost instant 20 percent rise in its shares. You know what? That might take the cake of FANG! What can I say? We have loved FANG on 'Mad Money' and we don't think these internet stars are done shining and I do not think that Amazon can be contained even if it is up 100 to 150 points," Cramer said.
So, while the tide of the market is going out and much of the market is trying to stay afloat, Cramer has pinpointed the strongest themes of the S&P as cybersecurity, athletic apparel, housing, drones and defense. Good luck to the rest; hope they know how to swim.
Considering that the entire metals group has been crushed in the past few months, Cramer thinks it is time to consider if it safe to own a high quality steel maker. Nucor Corporation is a scrap steel business with strong management, but has been under pressure from increased foreign supply and weaker worldwide demand for metals.
On Wednesday the stock was trading at multi-year lows, however it got a jolt of energy on Thursday when it reported a substantially better quarter than anticipated. It delivered a 13 cent earnings beat from a 26 cent basis, and management confirmed that pricing has begun to stabilize.
Is it safe to pick up some Nucor, or should investors remain cautious? To find out, Cramer spoke with Nucor's chairman and CEO John Ferriola.
"As you know, Nucor is the most diversified steel and steel products certainly in North America, maybe in the world. So we touch a bunch of different markets and we see several of them getting stronger. Some are becoming a little bit weaker, but most we see as getting a little bit stronger," Ferriola said.
As much as Cramer would like to think the price of a stock is purely driven on fundamentals of the company, he reminded himself that, unfortunately, that is not the case. Sometimes, other shareholders can stir the pot, and if you follow the other shareholders—then you are in trouble.
"There is nothing worse than owning a stock alongside a big hedge fund that is being forced to liquidate all of its positions, because no power on Earth can prevent that stock from going lower, at least until the hedge funds are finished selling," the "Mad Money" host said.
Just take one look at what is happening with the oil and gas master limited partnerships, and Cramer's point is clear. This group has been getting crushed, and Cramer suspects that there is a fund out there that owns the MLPs that is causing the problem.
Perhaps the fund either borrowed too much money, or it is facing massive withdrawals and desperately needs to raise cash. Thus, it is selling these stocks every day.
"While we don't know when this forced selling will end, I do think that we will look back and wonder 'How did they ever get so low?' Which is why, if you are willing to take a few more days of pain, I think this is the time to buy the pipeline MLPs," Cramer said.
After an amazing day on Thursday, Cramer thinks there is more than just coffee brewing at Starbucks. First, it announced a new partnership with Lyft, which is Uber's biggest competitor, and then after the close it reported a blowout quarter and sent the stock roaring in after-hours trading.
Starbucks delivered a 1-cent earnings beat from a 41 cent basis, higher-than-expected revenues and 7 percent global same-store-sales growth, which includes an 11 percent increase in the China/Asia Pacific market. To make matters even better, the company also raised its full-year forecast.
Can its global strength continue to dominate? To find out, Cramer spoke with Starbucks president and chief operating officer, Kevin Johnson.
"I think this was the strongest, most remarkable quarter in the 23-year history of being a publicly traded company. The growth we posted and the comps we posted, I think all support the company is executing on all cylinders," Johnson said. (Tweet This)
With the knowledge that a Fed rate hike is just around the corner, the competition from higher treasury yields makes utilities dividends seem less attractive than bonds.
But now that Cramer sees China in real trouble, he wonders if this will result in higher pressure on the economy and perhaps the money will flow back into the domestic utilities. One of those companies is American Electric Power, which owns the largest power transmission network in the U.S. and serves more than 5 million people across 11 states.
After what looked like a pretty good quarter, Cramer thinks AEP is looking pretty attractive with its 3.9 percent yield. To take a closer look, he spoke with the company's chairman and CEO Nick Akins.
"Many of our investors are long-term investors and for us to continue to invest and to beat the market, really says a lot about the foundational elements of what we provided during this year. So it's a great year for us and we will continue plodding along to ensure that we continue with those continual revenues to our investors," Akins said.
In the Lightning Round, Cramer gave his take on a few caller favorite stocks:
United Rentals: "I have to tell you I did not like that conference call. A couple of quarters ago Mike Kneeland [CEO] said don't worry about it, it was oil and gas and small business. Well now I'm worried about each agency's oil and gas. No, when a stock is down 10 it tends to have another down day. I do not have a catalyst to recommend URI."
J.C. Penney: "I am a best-of-breed retail guy, and that makes it more difficult for me to recommend J.C. Penney. I like what CEO Brian Cornell is doing for Target...and yes indeed I do like Amazon, Costco which is down on it's luck right now, and let me throw in Ulta and Nordstrom."