Don’t feel bad if you’re having trouble figuring out this market, Jim Cramer told his Mad Money viewers Tuesday. Even the pros are baffled by the market’s recent moves. All you really need to know is that we’re not at the bottom yet, which means all we can do is sit and wait.
Why is the market turning into a giant land of confusion? It’s because many of the things investors are worried about are hard to comprehend. We all hear about supply-chain disruptions, but what does that really mean? In many cases, it doesn’t have anything to do with moving goods from one place to another, but rather the fact that companies were caught off guard by rising demand and simply didn’t order enough products.
Over on Action Alerts PLUS, Chris Versace and Bob Lang say, “pain points make for excellent investment opportunities.” They’re talking about semiconductors. Chips for the automotive industry, chips for data center expansion. That’s why they’re trimming Wells Fargo (WFC) – Get Wells Fargo & Company Report and UPS (UPS) – Get United Parcel Service, Inc. Class B Report, and starting a position in Applied Materials (AMAT) – Get Applied Materials, Inc. Report. Check out their latest trading strategies and investment ideas with a free trial of Action Alerts PLUS.
We’re also worried about the trucker shortage, but in reality, that should be called a “we don’t want to pay more” crisis. Transportation companies need to pay more or face the alternative, Cramer said, and the alternative is going out of business.
With so many crosscurrents, it’s impossible to know what to buy or sell. Last week, we were told the cloud stocks were the worst place to be with inflation on the rise. Today, the cloud stocks rallied, with Workday (WDAY) – Get Workday, Inc. (WDAY) Report up 1.3%. The semiconductor stocks should be minting money given the shortages we’re seeing, but both Micron Technology (MU) – Get Micron Technology, Inc. (MU) Report and Texas Instruments (TXN) – Get Texas Instruments Incorporated Report fell on weaker outlooks because they can’t make enough chips.
Even shares of Apple (AAPL) – Get Apple Inc. (AAPL) Report fell 1.4%, despite that company’s continued strong performance.
With all of these seemingly random, themeless moves, there’s only one thing you can do, Cramer concluded: wait it out.
Read: Hasbro (HAS) – Get Hasbro, Inc. (HAS) Report said Tuesday its chairman and CEO Brian Goldner has died, only one day after saying he was taking a medical leave.
Executive Decision: CrowdStrike
In his first “Executive Decision” segment, Cramer spoke with George Kurtz, co-founder, president and CEO of CrowdStrike (CRWD) – Get CrowdStrike Holdings, Inc. Class A Report, the cybersecurity company that’s in the middle of its Fal.Con 2021 user conference.
Kurtz explained today’s announcement of CrowdStrike’s extended detection and response network, known as their XDR coalition. He said the system allows multiple security providers and partners to share data points to help strengthen all of their products. The system utilizes advanced analytics and automated workflows to stop breaches even faster.
Every company, big and small, needs to protect itself from cyber threats and ransomware attacks, Kurtz added. The XDR platform will help even the smallest companies respond to threats like the big boys.
Ransomware in particular is a huge challenge, Kurts said. The average ransom payout is now $6 million and if companies don’t pay it, data will be leaked on the Internet where it will be equally costly to clean up.
Executive Decision: Medtronic
For his second “Executive Decision” segment, Cramer also spoke with Geoff Martha, chairman and CEO of Medtronic (MDT) – Get Medtronic Plc (MDT) Report, ahead of the medical device maker’s ESG investor meeting tomorrow.
Martha said there’s a lot going on at Medtronic, including a new brand refresh that will be announced tomorrow. Part of that rebranding will include a new tagline, “engineering the extraordinary,” which encapsulates what Medtronic is all about.
Medtronic is at the nexus of healthcare and technology, Martha said, and there is a lot of innovation happening industry wide in the fields of robotics and miniaturization, two areas where Medtronic excels.
Medtronic is also committed to reducing global health disparities, Martha added, and the company is performing more virtual training sessions than ever to bring knowledge of their products worldwide.
When asked about areas like deep brain stimulation, Martha said Medtronic doesn’t back away from difficult problems. They continue building technologies to listen for the brain signals that cause tremors in Parkinson’s patients, for example, and disrupt them. They are learning a lot with each passing month.
Off the Charts
In the “Off The Charts” segment, Cramer checked in with colleague and commodities expert Carley Garner over the direction of oil prices and what it might mean for the stock market.
Garner first looked at the Baker Hughes high count, noting that last week, the U.S. had 433 oil rigs in operation. That’s up from the lows set in August 2020 of just 172. Rig use has steadily risen since those lows, however it is not rising quickly enough to meet demand and it pales in comparison to the pre-pandemic highs over 800.
Garner next looked at West Texas crude prices, noting the seasonal pattern over the past 30 years suggests a top typically forms right now and continues until almost the end of the year, meaning the current rally may be living on borrowed time.
Gartered added that before the shale drilling revolution, $77 to $84 a barrel used to be the floor for oil prices. But since the revolution, that floor has become the ceiling. That leaves the next floors of support at $72 and $62, leaving little to stop crude below those levels. She advised using caution, as the market would be shocked if prices fell that far.
Ground Rules for China Talks
In his “No Huddle Offense” segment, Cramer opined on what he’d like to see from trade relations with China. He outlined five ground rules that should be mandatory before any talks with China resume.
First, Cramer said China needs to end its intimidation of Taiwan, a trusted U.S. ally. Second, China must show a sign of good faith, like placing large orders from Boeing (BA) – Get Boeing Company Report, Caterpillar (CAT) – Get Caterpillar Inc. Report and Deere & Co. (DE) – Get Deere & Company Report. Third, China should improve how it treats foreign companies by letting them operate without requiring a domestic partner.
Fourth, Cramer said China must get serious about combating cyber threats. We cannot negotiate with a foreign entity that is enabling hackers. Finally, China should commit to buying U.S. natural gas to combat its growing energy needs.
Only after we see these five things should America negotiate with China, Cramer concluded.
Lightning Round
Here’s what Cramer had to say about some of the stocks that callers offered up during the Mad Money Lightning Round Tuesday evening:
Doximity (DOCS) – Get DOXIMITY, INC. Report: “I think you hold onto this one for the long run. That’s how you make money.”
Abbott Laboratories (ABT) – Get Abbott Laboratories Report: “Abbott has a lot of things going for it. I’ve liked it for many years.”
Tilray (TLRY) – Get Tilray, Inc. Report: “I don’t like the cannabis industry. It’s caused a lot of heartaches. “
Upwork (UPWK) – Get Upwork, Inc. Report: “These recruiting companies are in demand. I think it goes higher.”
To sign up for TheStreet’s free Daily Booyah! newsletter with all of the latest articles and videos please click here.
