“People are spending again,” Cramer said during Tuesday’s Stop Trading!.
He said to watch Coach , Williams-Sonoma , Tiffany and Nordstrom as proof of the trend. The next immediate beneficiary? Ralph Lauren , which Cramer predicted will report “a great number.”
Lean inventories have put retailers in good position going into the historically strong fourth quarter. Rather than dumping excess merchandise through sales and discounts, these companies will have better price control, Cramer said, during what should be “a very strong holiday season.”
Also in the retail world, suppliers threaten Walmart’s dominance, as consolidation allows them better pricing control, too, and, as a result, wider margins. Stanley Works’ buyout of Black & Decker is a perfect example, Cramer said, and he recommended Newell Rubbermaid , which has “a substantial tool division,” as a play on the deal.
“We are seeing a colossal fight between Walmart and the suppliers,” Cramer said, “and right now with these mergers the suppliers are winning.”
Lastly, Cramer suggested buying American Tower after its strong quarter. He said it was a better trade on smartphones right now than the warring AT&T and Verizon .
“It is such a war that these stocks are hard to own,” Cramer said.
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