Jobs More Important Than Earnings Next Week
Despite a slew of important earnings announcements coming next week, the most important number will come Friday: the all-important nonfarm payroll report.
“I think that will overshadow every single report that we get,” Cramer told “Mad Money” viewers.
That being said, Cramer does anticipate a good number, something that will explain the monster September we just had. Of course, this won’t stop the cynics from immediately finding a new reason to hate the markets. They’ll probably say there’s less of a chance for Washington gridlock, something investors love, and that’s bad for stocks.
But Cramer is quick to point out that President Obama has been much more pro-business in the past month. What with accelerated write-downs, incentives and tax credits all part of his plan to prop up the economy. The man who once declared, “Now is not the time for profits,” has learned that now is exactly the time for profits, and that’s good for stocks.
But what about those earnings reports?
In the agriculture sector, Cramer’s expecting a solid report from Mosaic on Monday, and an even better one from CF Industries in November. Food demand the world over will continue to drive the fertilizer business, he said. Seeds will no doubt play a role as well, but stay far away from Monsanto . The company has encountered problem after problem, from declining sales to underperforming products to a rumor that one product in particular might even cause birth defects. Cramer called the stock “a falling knife.” So if you want to play the seeds biz, buy DuPont .
Tuesday will bring news of the fast-food industry in China, particularly through Yum! Brands’ KFC. Cramer thinks “it’s getting stronger and stronger after a weak patch.” The play here is to way to see if Yum!’s numbers disappoint the Street, giving you a better entry point into the stock. That’s what happened last time the company reported KFC same-store sales growth of “only” 4% in China.
The worry of the week belongs to Costco . Not because Cramer doubts its strong business, but because management is going to have to really blow away the numbers to maintain its high-flying stock’s present trajectory. COST is up 10 straight points, so a wow of a report will be needed to send it higher. If the company misses, though, all the better. Use the pullback in share price to start a position.
Lastly, there’s Pepsico . Expect talk of raw costs ahead of the quarter, but Cramer is focused squarely on CEO Indra Nooyi’s ability to deliver positive numbers and buy back stock. And if the market puts PEP on sale regardless, because of those raw costs, approach it the same way you would Costco: Consider yourself lucky you got such a great price on this stellar stock. Cramer likes it below $65, where “it will be ridiculously cheap,” he said.
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