If you look at our economy only through the lens of the stock market, then you will only see strong earnings from Adobe Systems (ADBE) – Get Report Sending shares up to 2.1% and reducing earnings from FedEx (FDX) – Get Report Indication that commerce is strong. It is easy to look at these figures and think that our economy is strong and COVID-19 is in the rearview mirror.But there is a lot of rot beneath our nation’s largest publicly traded companies, Cramer said. About two-thirds of our economy is service-based, Cramer told the audience, and that means some 15 million retail and restaurant jobs are at risk because social distance makes small business unprofitable.
Small businesses do not do business on Wall Street, so they are often out of sight of lawmakers. But the fact is that unless we have a vaccine, social disturbances and other epidemiological restrictions will strangle many small businesses – and we won’t see an impact until bank loans start to see default. will do. By then, it is already too late.
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Executive Decision: Union Pacific
In his first “Executive Decision” segment, Cramer spoke with Lance Fritz, president, president and CEO of railway operator Union Pacific (UNP) – Get Report. Union Pacific shares have gained 41% in the past six months, while the company recorded a strong quarter of 7% this week.
Fritz began by stating that Union Pacific is celebrating its 150th anniversary as a publicly traded company on the New York Stock Exchange. Many companies cannot boast of such a legacy and commitment to their shareholders and employees.
Fritz said that their consistently strong results come from their rail operations for maximum efficiency. They are constantly improving and reducing costs, and lower costs open up new opportunities and new markets that cannot match the competitor.
When asked about his business, Fritz reported that Union Pacific is seeing strength in many areas, including e-commerce parcels, intermodal shipments, and chemicals and plastics. They see weakness in energy, primarily oil, gas and coal-related shipments.
Fritz was proud to expand her commitment to double the number of women in her organization by 2020. She said that railings are not traditionally an industry that attracts many women, but they aim to change that. He also postponed the company’s commitment to the environment. He said the carts are far more efficient than trucks and that anyone who cares about their carbon footprint should be shipping via rail.
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Executive Decision: Lenar
For his second “Executive Decision” segment, Kramer also spoke with Stuart Miller, the executive chairman of homebuilder Lennar (LEN) – Get Report, Which saw its shares fall 3.9% despite a better-than-expected quarter, which included strong guidance for the remainder of 2020.
Miller said there is no doubt that COVID-19 has changed the home market and has re-calibrated the industry. Consumers are looking for homes that meet today’s needs, and that include floor plans for their children in home offices, home gyms, and even home schools. All of those locations are made possible by smart technology such as WiFi throughout the house, without dead spots.
Miller said Lennar has continued to focus on its strategy to drive gross margins and cash flow. They have thus been able to liquidate their balance sheets and reduce their debt by $ 2.8 billion so far.
Asked why home builders are building a ton of new homes to meet growing demand, Miller said everyone learned their lessons in 2008, and both lenders and builders are proceeding with caution. He said that Lenner would always adopt a measured approach to production and sales to ensure that they would never get ahead of themselves.
In the “Off the Charts” section, Kramer checked in with collaborator Bob Lang for a technical read on three hot stocks: (DHI) – Get Report, Caterpillars (cat) – Get Report And household goods retailer RH (RH) – Get Report.
Lang said he liked DR Horton the best of all home builders, as the stock rebounded its 50-day moving average with a strong relative strength indicator (RSI). Lang felt that Horton’s next stop would be in the mid-$ 80s.
Lang also likes strength in RH. The stock moves more with some shortcomings and buying opportunities. The RSI is indicating that the stock is overbought, but Lang felt that the stock may remain in overbought territory for a while before the stock needs to consolidate its gains.
Finally, Lang felt that the Caterpillar was a grand chart with a strong crossover in highs and lows and MACD momentum indicators. Lang felt the stock was a buy if it fell back to its 10-day moving average.
Cheap today, Cheap tomorrow?
In his no-huddle offseason section, Kramer reminded viewers that a cheaper stock can still be cheaper today. Just because a stock seems cheap does not mean it should be bought.
Case in point: banks and oils, two fields that can’t seem to find their feet. Kramer said he sold Citigroup shares (C) – Get Report For its charitable trusts, Action Alerts Plus, because even the bank’s bountiful dividend yield is not enough to protect it from continued losses. It does not matter whether you are considering Citigroup or First Horizon National (FHN) – Get Report Ya wales fargo (Wfc) – Get ReportNothing seems to be safe.
Then there are oil reserves. Kramer said to remove Exxon Mobil (XOM) – Get Report The S&P 500 is not getting enough attention. Exxon used to be a Belvester stock which everyone considered safe for themselves. Today, the stock is not important enough to be included in S&P. From oil to pipelines to natural gas, Cramer said he could think of no reason to own these shares.
Here’s what Jim Cramer said about some of the stocks he called during the Mad Money Lightning Round on Tuesday evening:
Jamia Technologies (JMIA) – Get Report: “I like Amazon (AMZN) – Get Report And alibaba (Saint) – Get Report, And even mercadolibre (Meli) – Get Report. Let’s stay with them. “
Eastman Kodak (KODK) – Get Report: “I don’t like Kodak. Something’s not right for me.”
Jinga (ZNGA) – Get Report: “This tidal wave is scorching everyone.”
Altria (MO) – Get Report: “I do not recommend any tobacco stock.”
go pro (GPRO) – Get Report: “It’s an item. I have nothing good to say about it. Sorry.”
Rackspace Technology (RXT) – Get Report: “I’ve got a lot of good tech stocks, I’m sticking with them.”
Workhorse group (WKHS) – Get Report: “This is part of the EV thesis, but it does not contain what I really want, which is earnings.”
Buckle (BKE) – Get Report: “I don’t like apparel and if I did, I’d like PVH Corp. (PVH) – Get Report Or ralph lauren (RL) – Get Report. ”
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At the time of publication, Cramer’s Action Alert Plus had a position in AMZN.