Business News

Cramer Remix: There are two sides to this economy

Looking ahead to the April 7 nonfarm payrolls report, which Jim Cramer considers to be the biggest news of the week, two contradictory pictures of the economy seem to be emerging.

"We've been getting a very mixed read on the economy of late," the "Mad Money" host said.

"Many retailers have been painting a weaker picture and we know that consumer spending's just been okay. On the other hand, we speak to a lot of companies here, many of which are hiring and expecting big things for 2017," Cramer continued.

A trader looks at screens while working on the floor of the New York Stock Exchange (NYSE) in New York, U.S., March 27, 2017.
Lucas Jackson | Reuters

So with the bears warning of trade wars, market derailment at the hands of the Federal Reserve and the risks of President Donald Trump's agenda not being fulfilled, Cramer said to get used to those arguments.

"They'll probably be with us all year," he said. "Just remember what this market was able to accomplish despite these very powerful arguments, and perhaps keep that in mind if we get any dips going forward as the profit-taking like we saw [Friday] sets in during the beginning of the second quarter."

With that in mind, here are the stocks and events on Cramer's radar next week:

On Monday, New York Fed President Bill Dudley and Richmond Fed President Jeffrey Lacker will speak. Cramer's watching for commentary on possible interest rate hikes ahead of earnings season, during which the banks report first.

Tuesday marks an analyst meeting at spice maker McCormick. If the company's story is intact and the stock rallies, investors may be getting bearish on the economy.

If the story is good but the stock does nothing or falls, that will strangely be good news for the market, especially for the industrials and the banks because it means the market is still expecting economic expansion.

Wall Street will welcome a flurry of earnings reports on Wednesday including Walgreens, Monsanto, and Bed Bath & Beyond.

Walgreens' stock has been under pressure due to its push to buy rival Rite Aid being stalled by U.S. antitrust officials, so Cramer is looking for any hint at resolution.

Monsanto has also been embroiled in takeover tension with German drugmaker Bayer, so Cramer is looking to its earnings report for clues on the deal and what needs to happen to streamline it.

Cramer is bracing himself for another disappointment with Bed Bath & Beyond, though he admitted that anything positive could boost the stock.

On Thursday, CarMax, the largest used car retailer in the country, will report earnings. The stock has been struggling, down 8 percent in 2017.

"I want them to give us a read on both the new and used auto market, as well as giving us some commentary on the endless hand-wringing about car loan losses," Cramer said.

Constellation Brands will also report earnings on Thursday. Cramer worries that the wine, beer, and spirits company, which imports beer from Mexico, could get hurt by a possible border-adjusted tax on imports.

But Cramer is wary of House Speaker Paul Ryan, who was unable to push through the GOP's Obamacare replacement plan.

"That makes me more inclined to buy Constellation, which I bet will continue hitting it out of the park," Cramer said. "But if you don't already own it, please wait, as it's had a bit of a relief rally ever since it became clear the House of Representatives has no real leadership."

Traders work on the floor of the New York Stock Exchange in New York City.
Getty Images

Meanwhile, nobody seems to have noticed that the market restarted its love affair with senior growth stocks, but Cramer did, and he is climbing on board.

"After having no sex appeal whatsoever for almost the entirety of last year, the senior growth love affair began anew during this first quarter," the "Mad Money" host said.

One such stock is Disney. After taking a hard hit from continued ESPN subscriber losses, CEO Bob Iger assured investors that he was feeling better about ESPN's numbers and reminded them of Disney's healthy pipeline of films, and according to Cramer, that's all the market needed.

Or take a look at Starbucks. First the coffeemaker's sales fell under pressure due to mobile ordering mishaps, then news of CEO Howard Schultz stepping down from his role sent the stock sliding.

But recently, Starbucks has managed to turn its fortunes around, announcing a fix to the mobile ordering issue that should come in the second half of the year.

"Senior growth is back, and even though each of these stocks has its blemishes, they're being airbrushed one by one. I think the picture that's left seems quite rewarding, and I bet it lasts beyond the incredibly great first quarter of 2017," he said.

For a traditional retailer that has managed to succeed in a tough environment, Cramer turned to Burlington Stores, which has avoided the brick-and-mortar slowdown and managed to thrive.

"Even compared to other discounters like TJX and Ross Stores and Ollie's, Burlington seems to be in a league of its own," Cramer said. "Burlington gives its customers a treasure hunt experience, and people will put in the time to search through their stuff in order to find great products at a great price."

The off-price strip mall chain formerly known as Burlington Coat Factory has perfected the "treasure hunt" model that gives its customers lower prices than they see on the web, so Cramer gave Burlington his stamp of approval, and said the stock's got much more room to run.

Sin Cara jumps during the WWE Live Dusseldorf event at ISS Dome on Feb. 22, 2017 in Dusseldorf, Germany.
Lukas Schulze | Bongarts | Getty Images

As crowds flock to Orlando for WrestleMania 33, professional wrestling's biggest event of the year, Jim Cramer took a dive into WWE's stock to pin down how the name has soared in recent years.

"When you take a sober look at the fundamentals, it become clear that WWE is actually on the right side of many powerful secular themes, like the ascendance of live programming, the rise of online media, and the embrace of video games as part of the stay-at-home economy," the "Mad Money" host said.

After a volatile 2014, WWE turned itself around by releasing WWE Network, a subscription-based streaming service that boosted its stock to more than twice its 2014 bottom and modernized the once-old-school media business.

Cramer added that WWE could be a "classic Trump stock" since Trump chose its former CEO, Linda McMahon, to run the Small Business Administration, and because tax reform could give the wrestling giant's bottom line a helpful bump.

Finally, Cramer examined Friday's IPO of Alteryx, a computer software company that serves over 2,300 customers, including players like Nike, Southwest Airlines, and Accenture.

"If Accenture's using your software, that's a very good sign," Cramer said, adding that Alteryx is intimately involved with business intelligence and analytics, which will grow to a $27 billion business by 2020.

But Alteryx has its issues, too. The company is not yet profitable, it has outstanding shares, and its investors have limited voting powers.

Cramer's bottom line? "'The upside is real, but the risks are real, too. That's why I'm willing to give Alteryx my blessing, but only for speculation, and I encourage you to tread very carefully here, although I have to believe this one will garner recommendations from a host of analysts and report a pretty good quarter right out of the chute."

In Cramer's lightning round, he flew through his take on some caller favorite stocks:

Berkshire Hathaway, Inc.: "No, no. The downward trend is the opportunity, my friend. It says 'buy, buy, buy!'"

CenturyLink Inc.: "I've got to tell you, I regard that yield as a red flag, sir. I'm concerned that– I know there's a bunch of analysts that say 'don't worry about it.' I worry about it. If I want to be in [telecommunications], I'm still going to send you to Verizon."

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