Cramer: What to Keep Your Eye on Next Week
Friday’s sell-off was about the mechanics of the market, Cramer said, and he’s warning home-gamers not to get misled by the stock action.
He said the FXE, which measures the euro against the dollar, is a great predictor of the market these days. When the FXE goes down, the dollar gets stronger, and hedge funds sell. That’s because, Cramer said, many hedge funds are betting against the dollar with borrowed money.
So, if the FXE goes higher next week, stocks will go higher. When it goes lower, stocks will go down. And he said the pattern will continue until all the hedge funds that are using borrowed money are “blown out of the water.” He reminded viewers that these hedge funds are dumping stocks because they have to, and certainly not because the prospects of the underlying companies are getting worse.
With that in mind, here is what’s on Cramer’s “Game Plan” for the week of May 16:
MONDAY, MAY 16
Cramer thinks Lowe's could surprise people and do well when it reports before the bell Monday. The stock seems too cheap, and the numbers have already come down a lot, making it easier to for Lowe’s to beat or at least meet expectations.
After the close, Urban Outfitters will announce its earnings. We need to hear about a turnaround, Cramer said. “This stock ran up into the last quarter and it was a complete bust, so this is a total sink or swim situation. Right now the smart money's betting on a drowning.”
TUESDAY, MAY 17
The Home Depotwill deliver its quarterly results before Tuesday’s opening bell. Cramer believes both Home Depot and Lowe’s will be a terrific barometer of the state of the housing market. “The weather was supposed to be bad, but storms may have caused a lot of housing rehab.” He thinks HD should “shoot the lights out” with its report.
Tuesday morning also brings news from Saks . The high-end retailer was upgraded to 'neutral' from 'sell' this week by Goldman Sachs. Cramer thinks the numbers will show luxury is selling well.
Another retailer, Wal-Mart Stores, also reports Tuesday before the open. Cramer expects a tale of woe, and wants to know if the company will admit it has lost its way and will try to fix itself. “We need to hear about a big dividend boost, maybe, not a buyback, as those haven’t worked,” he said.
After the close, computer company Dell will announce its earnings. Cramer wants to see if this name is finally ready to break out of its rut.
WEDNESDAY, MAY 18
Speculative favorite SodaStream International will announce its results Wednesday morning. This stock is heavily shorted and just did a big secondary offering. And after what happened with IntraLinks, who did a giant secondary and then crushed people with a bad quarter, Cramer would prefer to wait and see what happens with SodaStream.
He expects the same old, same old when Hewlett-Packard comes in after the close. Cramer doesn’t see it doing anything other than the usual buybacks and maybe a slight dividend boost. “Perhaps the answer is you should buy Apple ,” he said, adding that the news from both Dell and HPQ this week may be what at sets Apple free from the $335 to $350 mast it’s been lashed to.
THURSDAY, MAY 19
Cramer will be listening in Thursday morning when Ross Stores reports. He thinks the “premier consistent retailer in America” will raise their earnings forecast.
After the close, Salesforce.com reports its earnings. If you want to speculate in this great application software company, Cramer said, then you should do it with deep-in-the-money call options. If Salesforce runs into the quarter, Cramer said put out or offer some common stock against it.
And finally, the first big initial public offering of the spring arrives when LinkedIn goes public the week of May 16. Cramer said he doesn’t like LinkedIn's long-term prospects, and suggests getting in and out as soon as the company becomes public.
When this story was published, Cramer’s charitable trust owned Lowe’s and Apple. Call Cramer: 1-800-743-CNBC
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