Mad Money

Cramer's game plan: Health care, economic data in focus after Fed preaches patience

Key Points
  • CNBC's Jim Cramer flags the earnings reports and events to watch next week.
  • Strong jobs data and a key Fed announcement sent stocks higher on Friday.
  • The positive action sets the market up for a strong week ahead, Cramer says.
Health care, economic data in focus after Fed preaches patience
Health care, economic data in focus after Fed preaches patience

Thanks to the Federal Reserve, the stock market could actually get some relief in 2019 after several months of turbulent trading brought 2018 to a historically weak close, CNBC's Jim Cramer said Friday.

The major averages surged on Friday following Fed Chair Jerome Powell's statement that the central bank would remain "patient" with regard to hiking interest rates, paving the way for stocks to rise without fear of higher rates.

"We shook off one of the shackles that has bedeviled this market since October, and it left us with the possibility of a save for 2019, just when so many investors had already written off the whole year ... after the first week of trading," Cramer said on "Mad Money."

"Today is a day to celebrate the flexibility and the terrific pivot that Jay Powell took this morning," said Cramer, who has criticized the Fed for months about what he considered an overly aggressive interest rate agenda. "It takes a lot of guts."

With that positive layout in mind, the "Mad Money" host turned to his game plan for the week ahead:

Monday: Trade talks, J.P. Morgan Healthcare Conference

Trade talks: Trade discussions between the U.S. and China restart on Monday, just as China "seems to be panicking" about its economy slowing down, Cramer said.

"If the Chinese government really wants to jumpstart their economy, ... they should cut a deal with President Trump [and] give U.S. companies permission to operate in China without domestic partners," he said, suggesting "concrete commitments" like allowing American Express or Visa to do business there or opening factories in the United States.

J.P. Morgan: Banking giant J.P. Morgan kicks off its 37th annual Healthcare Conference in San Francisco. Cramer will be at the heart of the action to get a sense of what's happening in the pharmaceutical space, especially after Bristol-Myers Squibb's huge deal to buy rival Celgene.

"This conference is so important that I think Bristol-Myers and Celgene had to merge before it happened ... if they were going to preserve their credibility," he said. "Walgreens is the first big name that we'll be interested in. I want to know how this drugstore chain plans to stay relevant in an era where everyone believes Amazon can destroy them."

Tuesday: Small business data

The National Federation of Independent Business issues its Small Business Optimism index results on Tuesday, and Cramer expects to see "a decided downturn." Last August, the index hit an all-time record high.

"I bet [the data will] show a decided downturn because small business is going to have its credit squeezed as the banks are making just a tiny bit more than they're paying out in [certificates of deposit]. That's an unhealthy situation," he said. "Patience will be warranted."

Wednesday: Constellation Brands, homebuilders, Bed Bath & Beyond

Constellation Brands: Alcohol distributor Constellation Brands, a headline regular in 2018 thanks to its investment in cannabis producer Canopy growth, will report earnings on Wednesday.

"This stock has become one of the nastiest out there because of concerns about the slowing sales of Modelo and Corona, ... as well as the billions of dollars they borrowed to buy that huge stake in Canopy," Cramer said. "Constellation's stock has fallen from $229 to $167 on these sales worries. If they don't materialize, you know what? $10 gain."

Homebuilders: Lennar and KB Home also report their quarterly results. Any good news could push their stocks higher thanks to the Fed's newfound prudence, Cramer said, adding that Home Depot could be a good secondary play to watch.

"I think they'll try to put a good face on things, but the truth is the homebuilders are a major reason why Powell chose patience over imprudence today," he said.

Bed Bath & Beyond: Cramer hoped Bed Bath & Beyond's Wednesday earnings report would offer some consolation as the retailer continues to fall under pressure from Amazon.

"I wish they had a game plan besides buying back stock," he said, adding that "it's been the worst buyback in the history" of the stocks he follows.

Thursday: Delta Air Lines

Delta: The airline operator's lowered revenue growth forecast incited some panic among investors on Thursday, but Cramer didn't think the quarterly results would be as bad as Delta made them seem.

"I bet they tell a much better story when they do the actual report on Thursday. You should buy some ahead of the quarter," he advised. "The airline stocks have become ridiculously cheap again, and lower jet fuel makes them much too cheap to avoid."

Friday: Consumer price index

Cramer expected the consumer price index, which measures changes in price of a group of standard consumer goods and services over time, to be negative when it is issued on Friday.

"Once again, we will praise Jay Powell for recognizing that we have something special going on in this country: growth without inflation that's producing jobs galore for people who had previously been thought to be unemployable and also putting an end to the lost decade of real wage [declines]," he explained.

Final thoughts

All things considered, the Fed's slight reversal on Friday set stocks up for a great week and, possibly, a good year, the "Mad Money" host said.

"Congratulations to you, Jay Powell," he said. "You recognized the rational nature of waiting, the prudence of patience and the need to try to keep a business cycle alive that many investors had already written off and left for dead. And to everyone else, here's my hope: you can finally buy stocks again without fighting the Fed."

WATCH: Cramer talks Fed and looks at week ahead

Cramer's game plan: Health care, economic data in focus after Fed preaches patience
Cramer's game plan: Health care, economic data in focus after Fed preaches patience

Disclosure: Cramer's charitable trust owns shares of J.P. Morgan and Amazon.

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