CNBC’s Jim Cramer on Friday told investors to steer clear of stocks in the Nasdaq Composite and instead place their bets on names listed in the Dow Jones Industrial Average.
“Even though tech has started the new year strong, and it was crazy good today, the charts, as interpreted by Larry Williams, say you need to be a little bit wary of the show horses in the Nasdaq and bet on the work horses in the Dow,” he said.
Stocks rose on Friday to close out a positive week for all three major indexes. The Nasdaq has climbed 11% this year, as investors have bet on less aggressive interest rate hikes from the Federal Reserve.
To explain Williams’ analysis, Cramer examined the daily chart of the Nasdaq-100 dating back to November 2021.
While some technicians believe it’s a bullish sign that the index has broken above its 200-day moving average over the past two days, Williams points out that the Nasdaq-100 has come back down after breaching the level in the past, according to Cramer.
He then reviewed the daily chart of the Dow going back to February 2022.
Unlike the Nasdaq-100, which Williams believes is a “show horse” index due to how much interest it gets, the Dow is more representative of Main Street, Cramer said.
He added that the blue-chip index broke out above its 200-day moving average back in November and has stayed above it since.
“Williams finds this chart a lot more compelling,” he said.
For more analysis, watch Cramer’s full explanation below.
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CNBC’s Jim Cramer said that Thursday’s rally is thanks to a batch of strong company earnings.
“I’ve said over and over again that during earnings season, what matters is companies and the CEOs with the smarts to direct them,” he said.
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Stocks rose on Thursday as investors digested the latest batch of earnings and new gross domestic product data showing the U.S. economy grew by a higher-than-expected 2.9% in the fourth quarter.
Cramer said that contrary to what many might believe, the economic data didn’t drive the trading session’s rallies.
“That’s a classic misdirection play — just totally wrong. It’s stale. It doesn’t count. We’re in earnings season, for heaven’s sake,” he said, adding, “Stocks did well today because many of them delivered good numbers.”
He went over several examples of corporate news and earnings reports that fueled Thursday’s gains:
“It’s very confusing if you’re on permanent negative autopilot because you only pay attention to the [Federal Reserve]. If you watched the individual companies, these moves would be a lot less surprising,” Cramer said.
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CNBC’s Jim Cramer on Wednesday told investors that diversification remains key to keeping a successful portfolio.
“I can’t say a diversified portfolio is bulletproof. But I can say that it makes it easier to stay in the game when one particularly popular group gets put through the meat-grinder,” he said.
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The Nasdaq Composite and S&P 500 closed lower on Wednesday as investors digested the latest slew of corporate earnings. The Dow Jones Industrial Average rose slightly to end the trading session.
Tech stocks fell on concerns about Microsoft’s softer-than-expected guidance, continuing the Nasdaq’s losses for a second day.
The recent declines come after a solid start to the year for the tech-heavy index, as hopes that the Federal Reserve could ease the pace of interest rate hikes led investors back into growth stocks.
“Frankly, if you have too much tech exposure, when you get a day like today, you might just say that’s it, I’ve had enough, I’m getting out of this racket. Well, that’s why you’ve got to stay diversified,” Cramer said.
He added that he still doesn’t recommend that investors add to their tech positions, even after the recent declines. “I want to stay in the game. I don’t want to be blown out when the tech grim reaper strikes.”
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CNBC’s Jim Cramer on Monday said that several elements could help propel stocks higher, even during what could be an ugly earnings season.
Tuesday kicks off a new earnings season featuring some of the biggest companies in technology, retail and consumer goods. Companies like Microsoft, IBM and ServiceNow are slated to report their quarterly financial results this week.
Here are the six factors that could help stocks as companies report earnings, according to Cramer:
More firms are implementing layoffs. Companies including Microsoft, Salesforce and Wayfair recently announced head count cuts, and their stocks popped.
The U.S. dollar and interest rates peaked last fall. Cyclical, more economically sensitive stocks have since bounced, as many companies conduct a large portion of their business overseas.
The Federal Reserve could almost be done raising interest rates. That’s according to a Wall Street Journal report, and could mean that bad loan worries – and possible ensuing damage to banks – could be over.
China’s economy is reopening. The return of the world’s second-largest economy is great news for companies, particularly those in entertainment, travel and consumer goods.
The government is poised to spend big on infrastructure. Cash from the bipartisan infrastructure bill and the Inflation Reduction Act provide a “safety net” for companies that build roads, bridges or tunnels.
Analysts are upgrading chip stocks. Barclays on Monday upgraded Advanced Micro Devices and Qualcomm to overweight. “Remember, the [semiconductor chips] inventory glut included everything from cellphones to desktops to high-performance computers. This is a very big deal,” Cramer said.
Cramer cautioned that while earnings season may still not be smooth sailing, any dips in stock price aren’t necessarily unwelcome.
“At the moment of the first print, when we see the numbers, I still expect to see some vicious declines. The difference from 2022? Those declines, they might be buyable,” he said.
Disclaimer: Cramer’s Charitable Trust owns shares of Advanced Micro Devices, Qualcomm, Salesforce and Microsoft.
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CNBC’s Jim Cramer on Friday offered investors a list of e-commerce plays he believes are worth buying, despite the group’s rough performance in 2022.
“There are still some e-commerce plays that I’m willing to get behind here, the ones that have truly prioritized profitability,” he said.
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Here is his list:
Etsy
Shopify
Pinterest
MercadoLibre
Chewy
Prologis
E-commerce stocks skyrocketed during the height of the Covid pandemic, as at-home consumers made purchases online rather than in-store. But when the economy reopened, consumers prioritized spending on travel and experiences over goods.
That shift, along with the Federal Reserve’s interest rate hikes, sent e-commerce stocks tumbling from their highs last year.
Cramer cautioned that while he believes the group’s struggles are temporary, it’s still too early to buy many of the names in the e-commerce space — including Amazon.
He said that one of his biggest concerns with the company is that it needs to cut more costs. Amazon said earlier this month that it plans to lay off over 18,000 employees.
While that might seem like a sizable cut, “this is a company with well over a million employees — to them, this is a drop in the bucket,” Cramer said.
But Amazon’s stock will eventually bottom, he said. “I think the business can eventually make a big comeback and there will come a point where the stock’s a screaming buy.”
Disclaimer: Cramer’s Charitable Trust owns shares of Amazon.
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CNBC’s Jim Cramer on Wednesday warned investors that stocks could continue to fall — at least in the near future.
“I think we have a … period of consolidation, as we get rid of the weak-handed investors. And we certainly wash out those who got carried away and committed personal fouls, like buying bitcoin above $20,000 or fooling around in meme stocks,” he said.
Stocks tumbled on Wednesday after December retail sales data heightened fears of a recession and investors took profits on gains from earlier this month. The S&P 500 closed at its lowest level since Dec. 15, and the Nasdaq Composite fell, breaking a seven-day win streak.
“Right now, the market’s working off one of the most overbought conditions we’ve had in ages. In the last two weeks, we simply rallied too far, too fast. It’s not that everything’s horrible,” Cramer said.
He pointed out that while Microsoft said that it’s laying off 10,000 employees, other industries have stayed much more resilient. Many companies, including United Airlines recently, have reported great quarters so far this earnings season, he added.
“Vast swaths of the economy are holding up just fine. The problem lies in tech, as I’ve been telling you for months on end,” he said.
However, that won’t stop the market from enduring more pain, at least in the short term, Cramer warned. “The bears — they will be out in full force tomorrow.”
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CNBC’s Jim Cramer on Friday warned investors not to make trading decisions fresh off a company’s earnings report.
Stocks made a comeback on Friday after falling initially on quarterly earnings reports and recession warnings from major banks. All three major indexes ended the week up, as investors digested a slate of earnings reports and economic data that suggested inflation is cooling.
Cramer, who earlier this week offered investors a set of guidelines for earnings season, called Friday’s trading session an example of why investors should be disciplined with their portfolios.
“Every quarter I make the same argument about how you should wait and do more work before you pull the trigger, but a lot of people remain unconvinced,” he said.
He also went over next week’s slate of quarterly reports. All estimates for earnings, revenue and economic data are courtesy of FactSet.
Tuesday: Goldman Sachs, Morgan Stanley, United Airlines
Goldman Sachs
Q4 2022 earnings release at 7:30 a.m. ET; conference call at 9:30 a.m. ET
Projected EPS: $5.56
Projected revenue: $10.76 billion
The company’s stock could soar higher if the earnings report beats expectations, he said.
Morgan Stanley
Q4 2022 earnings release at 7:30 a.m. ET; conference call at 8:30 a.m. ET
Projected EPS: $1.29
Projected revenue: $12.54 billion
Cramer said he expects a “terrific”reportfrom the bank.
United Airlines
Q4 2022 earnings release at 4:30 p.m. ET; conference call on Wednesday at 10:30 a.m. ET
Projected EPS: $2.11
Projected revenue: $12.23 billion
The company will put up great numbers, since consumers are still spending on travel, he predicted.
Wednesday: J.B. Hunt Transport, Alcoa
J.B. Hunt Transport
Q4 2022 earnings release before the bell; conference call at 9 a.m. ET
Projected EPS: $2.45
Projected revenue: $3.83 billion
Cramer said he’ll be watching for any sign that there’s a slowdown in commerce.
Alcoa
Q4 2022 earnings release at 4:10 p.m. ET; conference call at 5 p.m. ET
Projected loss: 69 cents per share
Projected revenue: $2.65 billion
The metals “have become insane stock growers. … The aluminum company knows if the metals move is merely a squeeze or the real deal with actual demand,” he said.
Thursday: Procter & Gamble, Netflix
Procter & Gamble
Q2 2023 earnings release at 6:55 a.m. ET; conference call at 8:30 a.m. ET
Projected EPS: $1.58
Projected revenue: $20.70 billion
He said he expects the company to report a solid quarter as raw costs come down and foreign exchange headwinds abated.
Netflix
Q4 2022 earnings release at 4 p.m. ET; conference call at 6 p.m. ET
Projected EPS: 58 cents
Projected revenue: $7.84 billion
“I think Netflix could be one of the strongest stories out there,” he said.
Friday: SLB
Q4 2022 earnings release at 7 a.m. ET; conference call at 9:30 a.m. ET
Projected EPS: 68 cents
Projected revenue: $7.78 billion
“SLB will tell us where the new finds are. They will play with an open hand. I bet you they give you a little update on Russia, too,” he said.
Disclaimer: Cramer’s Charitable Trust owns shares of Morgan Stanley and Procter & Gamble.
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Nvidia Corp: “Nvidia is a terrific company but it sells at a very high price-to-earnings multiple. … We have pulled back a little bit [for the Charitable Trust].”
Blackstone Minerals Ltd: “I do not know Blackstone Minerals. I am going to have to do some more work on that situation.”
EVgo Inc: “Our biggest fear is, again, losing money, and it does not fit our criteria anymore for what we’re recommending.”
Energy Transfer LP: “ET is actually a very good stock. … Times change and it’s become a better, better stock.”
Medical Properties Trust Inc: “This one, I don’t like that particular part of the real estate investment trusts. I think that they are too high-yielding, which therefore causes me to be concerned that they will not be able to make the distribution.”
Axcelis Technologies Inc: “Some of these companies in this business are doing amazingly well. And you’ve got to hand it to them.”
Disclaimer: Cramer’s Charitable Trust owns shares of Nvidia.
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CNBC’s Jim Cramer on Friday named four stocks that he believes could mount a comeback this year.
To come up with his picks, he parsed through last year’s worst-performing stocks listed in the Nasdaq 100.
“Out of the Nasdaq’s biggest losers, I think Qualcomm, Lam Research, Micron, and Airbnb will work this year, although not necessarily the first half,” he said, adding, “and don’t forget Illumina.”
Here are his thoughts on each stock:
Qualcomm
Cramer said that while Wall Street expects the semiconductor company to start losing iPhone orders in 2024, it’s possible the company could hold to at least some of those orders due. The company’s push into the auto market should also help the stock, he added.
Lam Research
He acknowledged that the near future could be ugly for chipmakers. However,“you can’t afford to wait around too long after this next bad quarter, because Lam’s stock will bottom months before the business does,” he said.
Micron
He advised investors to wait several months to buy shares of Micron, but make sure to do so before the chip glut is over. “Once there’s any sign of a bottom, this thing will bounce back like crazy — always has,” he said.
Airbnb
Cramer said that the company should continue to make money this year thanks to the current travel boom. Investors interested in the stock should buy it gradually on the way down, he added.
Illumina
He said that while the company is “superb,” he’d rather own shares of Danaher than Illumina.
Disclaimer: Cramer’s Charitable Trust owns shares of Qualcomm and Danaher.
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