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Cramer’s Look Ahead to Next Week

Friday, 28 Sep 2012 | 7:23 PM ET

What follows is “Mad Money” host Jim Cramer’s “Game Plan” for Monday, October 1.

MONDAY, OCTOBER 1

The week begins with the release of an important economic indicator: the September Institute for Supply Management or ISM Index.

Cramer said the number will call into question the entire economic slowdown.

“If we get no news out of China over the weekend and this number is bad, we will hear about how companies are already cutting back, slamming on the brakes in anticipation of the fiscal retaining wall,” Cramer said. “With every bad number, you are going to hear how the issue is Washington, which will stay with us right up until 2013.”

The German Purchasing Managers Index or PMI for manufacturing will also be released Monday. Despite the German stock market being up around 22 percent year-to-date, Cramer said the country is seeing some weaker economic numbers as of late. As it turns out, though, Cramer thinks the weak data could help the overall global economy.

“We need the Germans to recognize that their hardline position is now hurting themselves,” Cramer said, referring to the fiscally conservative approach Germany has taken toward Europe’s debt crisis. “So far they haven’t felt much pain.”

Cramer: What to Watch Next Week
Mad Money host Jim Cramer tells you what to look out for in the next week of trading.

TUESDAY, OCTOBER 2

On Tuesday, apparel maker PVH will host an analyst meeting. In the past, CEO Manny Chirico has used these events to report better-than-expected numbers. Chirico has been optimistic in recent interviews with Cramer, so he thinks the positive tone will continue.

Fertilizer maker Mosaic is slated to report earnings before Tuesday’s opening bell. To Cramer, the “agriculture trade is alive and well.”

Natural gas is a key cost input for fertilizer, so Cramer thinks Mosaic could benefit from the current low price of nat gas. At current levels, Mosaic’s stock is cheap, too, but Cramer prefers rival Monsanto.

WEDNESDAY, OCTOBER 3

Speaking of Monsanto, the St. Louis-based company will deliver earnings Wednesday.

“Funny thing about Monsanto. Even though it makes seeds, it trades as if it’s a biotech company,” Cramer said, noting that based on its price-to-earnings multiple, Monsanto is more expensive than Celgene or Gilead Sciences right now.

“Monsanto’s an innovator and the company has patents on seeds that are worth fortunes,” Cramer continued. “But is it the big winner that everyone thinks it is?”

Meanwhile, Family Dollar Stores is also scheduled to report earnings Wednesday. This stock has lagged its dollar store peers, so Cramer said FDO is the stock analysts “love to hate.” Cramer remains bullish on Family Dollar and the dollar stores in general, though.

After the close, hotel operator Marriott International will announce its earnings results. The Bethesda, Md.-based company recently caught a downgrade from JPMorgan, which troubles Cramer.

“It was one of those downgrades I took note of because it was so close to the quarter that I figured the guy knows something we don’t,” Cramer said. “That, to me, says be careful here.”

Either way, when it comes to lodging, Cramer continues to prefer Wyndham Worldwide because he thinks it offers more value.

THURSDAY, OCTOBER 4

When the European Central Bank speaks Thursday, Cramer hopes to hear that Spain has met its endpoints and the bailout money is ready, if any Spanish banks should need it.

“It would be a great moment to put an end to this nonsense once and for all by showing that the worst is now behind them,” Cramer said. “Stranger things have happened.”

FRIDAY, OCTOBER 5

Finally, the Labor Department will release its September nonfarm payroll data Friday.

“We had a downbeat number last time, but it didn’t hurt the market because the Fed then committed to a full out war against deflation,” Cramer said, referring to the U.S. Federal Reserve’s announcement of another round of monetary policy known as quantitative easing, which is intended to jumpstart the economy. “We can’t expect the Fed to come out this time and say something positive.”

Cramer recommends investors use caution because if the employment report is weak, the stock market could get hammered.

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