×

Cramer Remix: The red flag in the S&P 500

  • "Mad Money" host Jim Cramer reveals the one thing that's giving him pause when it comes to the averages.
  • Cramer also sits down with the CEO of vehicle maker Polaris Industries.
  • In the lightning round, Cramer recommends a few bonus stocks in two booming industries.

As stocks sold off on Wednesday, CNBC's Jim Cramer noticed a disturbing pattern occurring in the market.

"The wrong stocks are going up," the "Mad Money" host warned. "The universe of winners has gotten incredibly small."

Cramer could count the winning stocks — almost all involved in cloud-based functions in technology — on two hands.

But he also worried that one of the market's major averages could be amplifying the problem: the S&P 500.

"The S&P is now 26 percent tech," Cramer said, addressing the index's composition. "Do you know that's the highest it's ever been? I'm calling that a bit of a red flag."

Cramer's strategy session: Picking apart GE

An employee unwraps turbine components inside the General Electric power plant in Veresegyhaz, Hungary.
Akos Stiller | Bloomberg | Getty Images
An employee unwraps turbine components inside the General Electric power plant in Veresegyhaz, Hungary.

Cramer has a laundry list of requirements for the struggling General Electric to get back in his good graces.

In a "Voice of Cramerica" strategy session, the "Mad Money" host told a caller that the ailing industrial had a lot of work to do before he could consider it even a remotely safe investment.

"I need to see a couple of good quarters," Cramer said. "I need to get certainty about long-term care. I've got to feel better about pension. I've got to see a write-off at Alstom. If I see all these things, then I might come around."

Cramer, whose charitable trust owns shares of GE, has admitted that investing in the company was one of the biggest mistakes of his career.

Waking up to Nordstrom

A Nordstrom store in Irvine, California.
Scott Mlyn | CNBC
A Nordstrom store in Irvine, California.

Sometimes, Cramer finds it helpful to take a step back from a market clouded by politics and zoom in on major company-specific stories.

"Consider the case of Nordstrom, ... the swanky department store chain I like so much with a story that's reaching soap opera levels of melodrama," Cramer said on Wednesday.

Shares of Nordstrom took a hit after the retailer released its fourth-quarter earnings last week. The results were mixed: earnings per share came in weaker than expected, but revenue and same-store sales (a key metric for the industry) beat Wall Street's estimates.

But after spending last Thursday in the penalty box, Nordstrom's stock bounced back on Friday, climbing more than $5 per share, or nearly 12 percent, from its lows.

"When a stock can bounce like that off supposedly bad news, you've got to stand up and pay attention," Cramer said.

Polaris Industries CEO talks tariffs

Scott Wine, CEO, Polaris Industries
Scott Mlyn | CNBC
Scott Wine, CEO, Polaris Industries

As market-watchers weigh the effects of President Donald Trump's announced steel and aluminum tariffs, Scott Wine, the chief of the country's No. 1 snowmobile maker, told CNBC he wasn't so worried.

Wine, the chairman and CEO of vehicle manufacturer Polaris Industries, told Cramer on Wednesday that just like his products, his company was built to manage adversity.

"None of these are things that we can't overcome," Wine said. "The tariffs, for instance – it's about a $330 million total spend for aluminum and steel for us. A 1 percent increase, $3 million, we can handle. It's all the repercussions that would be difficult, but we've built a team and we've built a company that can handle a lot of adversity."

At the same time, Wine admitted that his industry, wrought with competition from the likes of Harley-Davidson, was a challenging one to navigate.

"What we've found is that innovation sells in this industry and we try to lead in that," the CEO said. "We'll spend about $260 million on research and development this year."

Goodbye, Gary

Finally, Cramer went on defense after the resignation of Trump's top economic advisor, Goldman Sachs veteran Gary Cohn.

"Cohn was your portfolio's best friend in the West Wing," the "Mad Money" host said. "Cohn is the rare public figure who wasn't in it for the fame, or the glory, or the money or the power. He took this position because he thought it was the right thing to do after a lifetime of working at Goldman."

Even though Cramer would've liked to have seen Cohn stick around at his post to help manage the growing deficit and bring his seasoned perspective to the White House, he wished him well.

"Even if you think Cohn was misguided or mistaken on policy issues, everything he did as Director of the National Economic Council he did for the right reasons," Cramer said. "And at least from my perspective, he did a lot of good in a very short period of time."

Lightning round: Double two-fer

In Cramer's lightning round, he fired off his take on some callers' favorite stocks:

Royal Caribbean Cruises Ltd: "I like Royal Caribbean. I like Carnival Cruise. I gave you a two-fer."

Shopify Inc.: "Another two-fer: I'm going to throw in Etsy. Both Shopify and Etsy are two companies of the new breed and I think it's terrific. And I've got to tell you, there were some short-sellers in Shopify. They got overrun. What were they overrun by? The fundamentals."

Disclosure: Cramer's charitable trust owns shares of General Electric and Nordstrom.

Questions for Cramer?
Call Cramer: 1-800-743-CNBC

Want to take a deep dive into Cramer's world? Hit him up!
Mad Money Twitter - Jim Cramer Twitter - Facebook - Instagram - Vine

Questions, comments, suggestions for the "Mad Money" website? madcap@cnbc.com