The Band-Aid was finally ripped off, and the U.S. finally saw some job growth on Friday. The nonfarm payroll report showed an addition of 271,000 jobs in October. Jim Cramer said it was fantastic for the American people, but a mixed blessing for stock portfolios.
The news of job growth in the U.S. indicated to Cramer that the Federal Reserve will certainly feel compelled to raise interest rates before year end, thus creating bad news for stocks.
With this in mind, Cramer went down his list of stocks and events he will be watching next week, to demonstrate the repercussions of how such positive economic news can play out in the stock market.
Priceline: It has so much growth, that it can beat the game of good news in the economy being bad for stocks. Cramer anticipates that investors will rotate out of stocks that need a weak dollar to rally. The high growth tech companies like Priceline will not be stopped, which is why he finds this stock so compelling. He wants investors to buy it into weakness.
Tuesday: DR Horton, Cummins, Brunswick & McDonald's analyst day
DR Horton: This mid-priced homebuilder is right in the blast zone when it reports. Cramer anticipates that it will say thinks are just okay, and will go slower as mortgage rates rise in the future. Cramer said he is a seller of the stock before the quarter.
McDonald's: Restaurant stocks have been hammered on higher labor costs, except McDonald's. He thinks it is because its new CEO Steve Easterbrook has been able to turn it around.
"I'm so impressed with this guy and I think the stock, which has been an amazing performer, can go higher still as Easterbrook talks about this terrific comeback," Cramer said.
Macy's: This company has one powerful enemy right now — the weather. When Cramer sees people walking around in shorts in November, that's never a good sign for retail and he thinks Macy's will say so.
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Thursday: Kohl's, Viacom, Nordstrom, Cisco
Viacom: With Disney earnings reviving the hot topic of cord cutting recently, Cramer worries that Viacom could be the most vulnerable to cord cutting than anyone else out there.
"Not only do I want you to avoid VIA, I'll go further. If you haven't bought Disney's stock yet, wait until Viacom's earnings to see if you can get in on some collateral damage weakness," Cramer said.
Friday: JC Penney
JC Penney: Its new CEO Marvin Ellison certainly has his work cut out for him. Cramer wishes he could recommend it, but the weather is just as warm for JC Penney as it is everywhere else, and that is all that matters right now.
"It's a new world of higher rates and we are going to have to factor them in from now on. Many stocks will be dinged by rate hikes, but as you can tell from next week's game plan, all is not lost," Cramer said.