- CNBC's Jim Cramer lays out his game plan for the week ahead and warns of potential market weakness after the president's latest warning to China.
- Stocks on the "Mad Money" host's watchlist include Sonos, VF Corp. and Dave & Buster's.
CNBC's couldn't resist patting himself on the back for his prediction that if Friday's job results were strong, they would embolden President Donald Trump to intensify his administration's trade war with China.
Sure enough, the better than expected jobs report was followed by another warning from Trump to China. The president told reporters Friday that he was "ready" to place tariffs on another $267 billion worth of Chinese goods on top of the $200 billion worth of goods already under scrutiny.
"Why does this matter? Because the president's predictability on trade has created a 'good news is bad news' dynamic," the "Mad Money" host said Friday. "Good news for the economy causes the White House to ratchet up trade tensions, which is viewed as bad news by the stock market."
Given the tit-for-tat history of the U.S.-China trade debacle, Cramer figured that the Chinese government would issue a response to Trump's barb over the weekend.
"You should expect a response from China over the weekend, and that does not bode well for Monday's thinly traded session," Cramer warned. (Monday is the second day of Rosh Hashana, the Jewish New Year.)
He added that shares of big industrial and technology companies with business in China would likely suffer the consequences.
"Be ready for a bit of a sell-off. Might be a good buying opportunity if the pain spreads beyond the Chinese-focused stocks," the "Mad Money" host said, turning to his weekly game plan:
On Monday, Cramer will have his eye on smart speaker maker Sonos for clues on how its business folds into broader trends around the "connected home."
"I've been pretty critical of this connected speaker play because the company's been around for ages and it still doesn't have a consistent history of profitability," he said. "Some people think it's the next Roku — have you seen that thing? I don't think it is. I think it's Sonos."
Tuesday will bring a flurry of economic data from United States allies and trading partners. With tariffs in focus, Cramer will monitor Germany's ZEW survey, which tracks investor morale and growth outlooks, Japan's growth index and the U.K.'s labor report.
"Believe me, I don't want to have to pay attention to any of this stuff," he confessed. "But when you're in a trade war with pretty much everyone in the world — and that is the situation, don't kid yourself — you want to know what kind of cards the other side is holding."
VF Corp: Apparel maker VF Corp's plan to spin off its underperforming jeans division into its own public company left some questions unanswered, so Cramer will be watching the company's Wednesday analyst meeting.
"I think the stock's worth buying ahead of the meeting," he said. "I'm betting management tells a good story about how the breakup will actually create value."
Producer Price Index: The Bureau of Labor Statistics will release its Producer Price Index (PPI) report, which measures the average change in prices for U.S.-made goods.
"We're not going to like many of these numbers going forward because when you combine a roaring economy, which we do have, with new tariffs, you get a toxic inflationary brew that the Fed must feel compelled to stop, and the way they do that, of course, is [by] rais[ing] interest rates," Cramer warned.
Consumer Price Index: Cramer felt the same about the Consumer Price Index (CPI) as he did about the PPI, warning investors that the two reports together could light a fire under the Fed.
"At this point, these two are just accidents waiting to happen," he said. "Yeah, I'm a little cautious."
Kroger: Supermarket giant Kroger has made a serious comeback since its Amazon-Whole-Foods-related lows, and with almost no tariffs on its products, the company could really deliver when it reports earnings on Thursday, Cramer said.
"Like so many other retailers, they actually figured out how to listen to their customers and get them the products where they want, when they want, how they want," he said. "If you own any, please don't sell it. It's going in the right direction."
UPS: The United Parcel Service will hold what Cramer called "one of the most important analyst meetings of the year" as Wall Street worries about the mail service giant's performance.
"I don't think so. UPS is a terrific e-commerce winner," Cramer said. "It would be a mistake to ring the register ahead of this. As a matter of fact, you might want to buy some before and maybe buy some after."
An earnings report from experiential play Dave & Buster's will round out the week.
"I've been a major fan of the stock," Cramer said. "Dave & Buster's is a consistent long-term winner in a world where so many large-format retailers are pulling back. If you own a strip mall, you can swap out one of them losers for a Dave & Buster's and that'll bring in a lot more traffic for the whole place. I expect a good number."
This week's sell-offs in the technology sector rattled investors so much that Cramer hesitated to recommend buying tech stocks with U.S.-China trade tensions seemingly re-ignited.
"I think there are better places to invest at the moment. You want domestic companies with even less international trade exposure," he said. "Tech is not immune."
And when it comes to Trump, the "Mad Money" host asked viewers to keep in mind that the president might not be as unpredictable as they may think.
"Bottom line? Just like I predicted, the president took advantage of a strong employment number and blasted the Chinese again — in fact, he blasted them a lot harder than even I expected him to," he said. "You can set your clock to it now. This is the new normal. Good news for the economy can turn into bad news for the economy after 280 characters or less."