Earnings season will come to a close next week and many corporations have pleased Wall Street with the numbers they've posted thus far, CNBC's Jim Cramer said Friday.
Last quarter was "one of the best we've seen in ages," likely because expectations were already lowered amid the ongoing health crisis, he said.
"If you find yourself wondering why stocks can keep roaring when we're at an insane number of Covid infections, the answer's simple," the "Mad Money" host said. "To paraphrase James Carville, it's the earnings, stupid. Big business is making a ton of money right now. Frankly, it's not that complicated."
The Dow Jones climbed almost 400 points, or 1.37%, to a 29,479.81 close. The S&P 500 surged 1.36% to a record close of 3,585.15 and the Nasdaq Composite moved 1% higher to 11,829.29. The major indexes powered through a slightly volatile week, buoyed by encouraging vaccine research news in the fight against the pandemic.
Meanwhile, the U.S. continues to set record daily coronavirus case counts and hospitals across the country are saddled by growing hospitalization rates.
"If you're more worried about the virus than encouraged by the vaccine, next week will be pivotal for you because we hear from some major national retailers and I think they'll have a surprisingly positive story to tell," Cramer said.
Cramer presented his market playbook for the week ahead. All earnings projections are based on FactSet estimates:
"CEO Nikesh Arora has put together a terrific set of assets for an economy where millions of people are staying or stuck at home working," Cramer said. "I expect very strong numbers."
"The meat processor had a major Covid problem that now seems to be behind them ... but the stock is stalled here," he said. If they deliver, "this $62 stock is going to go up a great deal."
"Both should report spectacular earnings," Cramer said about the retailers. "Anything less than spectacular, though, and these stocks will get hurt."
"The quarter's very important to the broader market because Kohl's is not an essential retailer, which makes it a good gauge of whether consumers are willing to venture out for non-essentials."
"I think people will keep buying this stock as Nio continues to ramp up production, because if it is the next Tesla that means you don't need to care about th short-term," he said. "For the moment, it's more of a concept than a company. Long-term, though, they have to deliver."
"The expectations have gotten incredibly high, and will even get higher if Walmart's good," Cramer said. "That makes it hard to beat."
"CEO Marvin Ellison is doing his best to turn around the operation. Still has some issues, although it's being buoyed by the pandemic," the host said. "Lowe's isn't quite there yet, but the numbers should be so strong that you won't even notice."
"We sold this off-price chain for my charitable trust," he said. "Short-term I don't see them bringing in many customers because they don't carry anything you can't live without."
"I, for one, am glad this stock's been coming down this week, because that makes it easier for the stock to blast off in response to a fantastic quarter, which exactly what I expect," he said.
"The company's done a lot to turn itself around … [but] in this environment it may not work," Cramer said.
"This is one of the toughest to gauge … [because the] software that they use to automate human resources and finance is a little opaque for most Americans to understand the stock," he said. "The company's winning contract after contract, but people don't understand it. I think it's a really well-run company."
"I'd rather just have you in Nike," he said.
Disclosure: Cramer's charitable trust owns shares of Nvidia, Walmart and Nike.