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Wall Street is busy betting whether Federal Reserve Chair Jerome Powell will cut interest rates later this month.
But CNBC's Jim Cramer is turning his attention to the looming earnings season as investors try to gauge the central bank's move.
"I'm not saying the Fed doesn't matter," the "Mad Money" host said Monday, after the major averages all retreated between 0.43% and 0.78%. "I will be watching him like a hawk, or maybe a dovish hawk, when he speaks to Congress this week. However, I think far too many people are misreading the Fed here and, more important, they are misreading the moment."
The business cycle is tricky, but investors already know that a slowdown is happening, Cramer said. After tanking the market with a misguided interest rate hike in December, Powell has become more flexible and data dependent, and that's important, the host added.
The action on Wall Street has cleared a way for investors to buy high quality stocks like PepsiCo for cheap, Cramer said. The beverage conglomerate on Tuesday will kick off the coming frenzy of quarterly earnings reports from publicly trade companies.
"Thanks to the endless and sometimes pointless guessing game on Wall Street, you get a sweet deal on all sorts of terrific stocks," he said. "Just remember: We don't need a rate cut for this market to work, we just need the Fed to exercise some common sense."
Using PepsiCo as an example, Cramer told viewers what to look for in picking stocks and how to capitalize on other's mistakes:
Shares of PepsiCo are up about 20% this year. On an apples-to-apples basis, Cramer noted, the equity is trading at about 24-times earnings, which is high compared to the average stock on the at 18-times earnings.
"Makes sense. PepsiCo is one of the most consistent, well-run companies on earth," Cramer said.
PepsiCo's 2.9% dividend yield is "pretty darn attractive at a time when the 10-year Treasury only gives you about 2%," Cramer said.
PepsiCo CEO Ramon Laguarta, who assumed the role after Indra Nooyi stepped down in October, is focused on boosting sales around the globe. Cramer said that can be done with the new products the company has introduced.
"I think the new products matter. Ingenuity matters. It's a heck of a lot more important than what he'll hear from Jay Powell," Cramer said. "We will not want to pay attention to Jay Powell. We want to pay attention to the conference call of what PepsiCo has to say."
Gross margin is defined by what the company makes minus the cost of goods sold. Cramer said he expects to hear that PepsiCo's raw costs have come down.
"They've been growing consistently ... but, you know, now that the economy's kind of cooled of, I think some of those trends are going to begin to reverse, which could allow PEP to deliver a nice upside forecast," Cramer said.
Cramer said PepsiCo is vulnerable to the strong dollar, however the host thinks it's baked into its roughly $132 share price.
"Nobody expects Pepsi will gain from the currency," he said. "Everyone expects it will lose, so we're putting that in the 'so what' category."
Cramer urged viewers not to listen to what the pundits say.
"What matters to us? Simple: If PepsiCo beats all of these benchmarks and its stock gets pulled down by the weakness in the averages because of the endless Fed chatter, then you should think about buying the stock," he said.
WATCH: Cramer explains what to look for this earnings season