Cramer’s Fed Focus: Trading Tuesday’s Decision
As if Wall Street’s eyes weren’t already on Washington. But on Tuesday, investors will be watching for the Federal Reserve’s decision on interest rates. Any talk of tightening, Cramer said, and stocks could sell off.
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We’ll get the announcement at the usual time – 2:15 PM ET – and the Street will be parsing every last line of the Fed’s statement. Cramer thinks that traders might use the opportunity to take profits, given how overextended the market is.
But if that happens, don’t worry. At least not “until the sixth tightening,” Cramer said. Instead, take advantage of the declines to buy your favorite stocks at cheaper prices.
“When people freak out and panic off of what Ben Bernanke says,” Cramer said, “you stay calm and you profit.”
What else is going on during the week? On Monday, the February industrial production report is out, and Cramer expects some good news, especially because of the strength in autos. Then on Tuesday there’s the February housing-starts number. This may seem contrarian, but we want it low, Cramer said. He thinks US housing inventory is still too high, and more inventory will just exacerbate the problem.
After those data points, Cramer will shift his focus to earnings. He’ll dig through Sequenom’s report, coming on Monday, for evidence that he should endorse the stock. SQNM plummeted last year after it was forced throw out data from a major drug test, but the share price has rebounded in 2010. Is the move legit? That’s what Cramer wants to know.
Tuesday will bring three noteworthy quarters: DSW , AAR and Discover Financial Services . DSW will give us yet another update on what Cramer says is a thriving shoe industry, while AAR will help us gauge the aircraft business’s health. Specifically Cramer will want know if he’s still right to be bullish on Boeing . Meanwhile, Discover will tell us if credit losses have peaked, in addition to what impact the CARD Act has had on the company. Cramer went so far as to say that DFS’s results “will matter tremendously for Wednesday’s trading.”
Nike will announce its quarter on Wednesday. Goldman Sachs put out some bullish research on NKE, Cramer said, but the company will have to beat Goldman’s numbers in order to impress the Street. So look for sales north of $4.664 billion and more than 94 cents a share in earnings. Also, future orders, the metric that truly drives Nike’s share price, should return to positive territory after a 1% decline last quarter, Goldman said.
FedEx will offer a snapshot of the world economy on Thursday. Cramer said he likes this conference call more than any other next week because the company’s CEO, Fred Smith, called last year’s bottom. We want to know what he’s saying now.
Lastly, there’s Palm , also sharing its numbers on Thursday. This company’s struggling, and its quarter has the tendency to drag down the entire smartphone cohort. If this happens again, Cramer said to buy some Apple on discount.
Cramer's charitable trust owns Apple.
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