What Cramer’s Watching Next Week
What follows is “Mad Money” host Jim Cramer’s “Game Plan” for the week of Monday, July 16.
MONDAY, JULY 16
To top off the week, investors will be all abuzz about Citigroup’s earnings on Monday before the opening bell. Cramer called Citi a “quandary,” because while the stock was hot back when emerging markets were growing, now the U.S. housing market’s on the mend and Citi does only about one third of its business there. Now, we’re seeing domestic strength for both JPMorgan and Wells Fargo instead. “We can’t like Citigroup nearly as much as a domestic bank,” he said. “And that’s why I don’t think [the stock’s] going to ignite a further bank rally.”
TUESDAY, JULY 17
Tuesday will bring around a slew of new data, including earnings from Intel , Coca-Cola and Johnson & Johnson — a company Cramer thinks has the most yet-to-be-tapped value of any major firm in the world. Cramer said that if new CEO Alex Gorsky offers any hint of “unlocking” or “bringing out value,” the stock will spike and investors won’t get to buy JNJ below $70 a share.
And with so many concerned over how currency and repatriation will impact earnings, investors will get a read on that when Coca-Cola comes out with its numbers. Cramer thinks the sudden strength of the dollar should shave some pennies off of the stock’s performance. He said that if KO suffers after that, investors should expect a rough ride ahead for the remaining global firms that will report. Historically, he said Coca-Cola has managed to hedge its big commodity cost exposure, but with the recent surge in corn prices — and corn being a key ingredient of corn syrup — we should get a better sense of how bad things may be for food and beverage companies expecting to report in the coming weeks.
Intel’s after-the-bell report should also tell us more about the sudden drop-off in demand some are seeing in the IT space. Cramer predicts a tough quarter but wonders if the stock gets hit given its recent decline, its “terrific” 3.5 percent yield and its longer-term prospects for new products in the pipeline. “If Intel doesn’t drop on a less than stellar quarter,” he said, “that’s the clarion call to buy — not sell — tech,” he said.
WEDNESDAY, JULY 18
In the middle of the week, the focus will be on reports from Bank of America and U.S. Bancorp . Cramer called BofA the “bank that’s struggling to do things right” and USB the “bank that can do no wrong” and thinks both will live up to those titles.
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Honeywell also reports and should clarify what’s going on in aerospace — one of its core businesses. Earlier this week, Boeing had a positive take on demand for jets while Airbus was more downbeat. But Cramer thinks Honeywell will set investors straight and “explain how we are not at the peak of the order cycle.”
On a more global scale, many are expecting China to come out with further interest rate cuts and a possible stimulus package Sunday night, and that if that happens, a rush of buying will follow. Cramer said many portfolio managers are looking to Yum Brands to track Chinese fortunes, because of the huge presence its KFC stores have in China. He also thinks that a slowing Chinese economy, coupled with potentially rising chicken and grain prices, makes YUM a good sale coming into its quarterly report.
THURSDAY, JULY 19
Investors get a glimpse into the telecom space on Thursday, when Verizon reports. And all eyes will be on Google’s numbers after the bell.
Cramer thinks Verizon has seen some terrific growth lately and expects to hear positive quarterly results. Google does a huge amount of business in Europe and the stock has yet to make up its losses from China, so while the stock is still cheap, Cramer said he needs more than that to say the stock is a buy.
FRIDAY, JULY 20
Finally, on Friday we’ll get earnings from General Electric . Cramer said he wants to see GE's financial services group more aggressively move capital over to the parent via dividends, which should lead to higher dividends for all shareholders, he said. What he doesn’t want to hear is that some of GE’s alternative energy-related endeavors have struck a blow to earnings.
The bottom line: We’re taking our cues from China right now, and if Sunday night’s announcements prove positive, stocks should continue to rally into next week. “[If] we get that,” he said, “then, we’ll be able to excuse a lot of in-line quarters and even a few earnings guide-downs among the industrials.” Read on for Cramer’s 10 Stocks You Might Have Overlooked
Read on for Cramer’s 10 Stocks You Might Have Overlooked
General Electric owns 49 percent of NBCUniversal, which is the parent company of CNBC.
When this story was published, Cramer’s charitable trust owned Boeing and JPMorgan Chase.
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