Investors need to consult a weatherman before investing in this stock market, Jim Cramer told his Mad Money viewers Tuesday. That’s because you never know which way the wind is blowing, and on Wall Street, it can blow in two different directions at the same time.
Investors are betting big on vaccines, for example, and that’s a huge tailwind for travel, leisure, restaurants and a host of troubled retailers. But for the likes of Home Depot (HD) – Get Report and Walmart (WMT) – Get Report, life returning to normal is a headwind. Cramer said there’s simply no way Home Depot will report another 24% boost in same-store sales when people aren’t spending most of their time at home.
Meanwhile, investors are also gauging the winds around the incoming Biden administration. A vaccine, combined with better relations with China, could lead to a huge pickup for the airlines and especially for Boeing (BA) – Get Report and its many suppliers like Honeywell (HON) – Get Report.
These changing crosscurrents make it difficult to navigate the stock market right now, Cramer admitted, but that doesn’t mean there’s still not money to be made. Just ask the Robinhood investors who have been betting on the cruise lines.
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Executive Decision: Rockwell Automation
In his first “Executive Decision” segment, Cramer spoke with Blake Moret, chairman and CEO of Rockwell Automation (ROK) – Get Report, shares of which fell 8% after the company reported weaker-than-expected sales but with strong guidance for the future.
Moret said Rockwell continues its mission of moving manufacturing to new levels, marrying local know-how with modern technologies that unlock new levels of productivity.
Today’s acquisition of Fiix, he said, is just another piece in the puzzle. Fiix will allow Rockwell to span the gap between manually-entered data and real-time machine monitoring data, allowing new levels of maintenance and automation.
American innovation is alive and well, Moret added, citing his company’s work with Rivian Motors to retrofit an old gasoline car plant into a modern, electric vehicle plant. Rockwell has also partnered with Microsoft (MSFT) – Get Report to roll out new, cloud-based software solutions.
Executive Decision: Lordstown Motor Corp.
For his second “Executive Decision” segment, Cramer also spoke for the first time with Steve Burns, founder, chairman and CEO of Lordstown Motor Corp. (RIDE) – Get Report, the newly public electric truck startup that surged 26% Monday after the company provided investors with a bullish update. Lordstown currently has over 50,000 reservations for its pickup, which is expected to begin shipping next September.
Burns explained that they were able to buy a shuttered factory from General Motors (GM) – Get Report and with GM’s help, convert it into their new electric truck facility. The company plans to be the first to deliver an electric pickup in the U.S. next year and its business plan is to sell to commercial fleets.
Burns added that their challenge was to build an electric truck that was just as tough as a gasoline truck, but also one that’s priced the same. Lordstown achieved this goal with motors at each wheel, a design that has greatly simplified manufacturing.
When asked about their sales, Burns said that their average order so far is 500 trucks and these larger operators aren’t worried about adding chargers to their facilities, they’re just excited to have a quality electric truck option for their fleets.
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Off the Charts
In the “Off The Charts” segment, Cramer checked in with colleague Bob Lang over the charts of the semiconductor equipment makers, a group that’s been on fire in anticipation of improved relations with China.
Lang first looked at a daily chart of Lam Research (LRCX) – Get Report, noting the stock’s surge from $330 to $430 a share in just three weeks. After making one pullback to its 50-day moving average, shares resumed their march higher and Lang felt the stock has more room to run.
Lang saw similar strength in Applied Materials (AMAT) – Get Report, which has risen from $57 to $74 a share. He felt $100 was possible, given the Chaikin money flow is still not in overbought territory.
Finally, Lang examined KLA Corp. (KLAC) – Get Report, noting the MACD momentum indicator’s recent bullish crossover and again the Chaikin indicating the stock is far from expense. Lang felt $260 a share was possible for this stock.
Cramer agreed with Lang’s analysis, along with the fundamentals, which give every indication that the next four years will be better than the last.
In his “No Huddle Offense” segment, Cramer said today’s news that Amazon (AMZN) – Get Report is entering the pharmacy space shouldn’t come as a surprise to investors. After all, the company signaled its intentions two years ago when it acquired Pill Pack.
So while today’s news that Amazon is offering Prime members up to 80% savings on prescriptions is bad news for the likes of CVS Health (CVS) – Get Report and Walgreen Boots Alliance (WBA) – Get Report, these companies have had years to prepare. CVS acquired Aetna in an effort to diversify, for example, and let’s not forget that many consumers prefer to speak to a pharmacist. There are also other drivers for the drugstores, like the coming need for millions of COVID vaccinations.
So while the healthcare stocks may already be out of favor, today’s Amazon news isn’t likely to move the needle anytime soon.
Here’s what Cramer had to say about some of the stocks that callers offered up during the Mad Money Lightning Round Tuesday evening:
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At the time of publication, Cramer’s Action Alerts PLUS had a position in BA, HON, MSFT, CVS, AMZN.