Jim Cramer traced Thursday’s rally back to the big industrials. To be able to spot the move, an investor had to understand the concepts of rotations, short-squeezes and under-ownership.
And the rally might not be over.
Cramer saw the rally coming; there were huge signs everywhere. Another gigantic industrial Dover preannounced hideous numbers. The stock dipped the next day, and then rallied back above to when it preannounced the crummy quarter.
“Remember, we are in both rolling bear market territory and rolling bull market territory,” Cramer said.
That means one hand will wash the other. Banks and pharmaceuticals are selling off, while the industrials are rallying. Money is simply flowing from one bearish sector into the bullish ones with shocking velocity.
Another company on Cramer’s radar on Thursday was Nike, which closed up 2 percent.
“Nike is the great American company that is king in every country there is. You do not touch that Nike and if it goes below $59, buy buy buy,” Cramer said.
After raising rates in December, the Federal Reserve confirmed on Wednesday that it would not stick to its plan of four rate hikes in 2016. Cramer was intrigued to find out what prompted the Fed to take this action.
“I think this puzzle has to be solved, because it is the difference between grabbing the next big entry point versus taking a pass,” the “Mad Money” host.
The first reason why the Fed changed course? Risks suddenly tilted towards deflation, which could have had grave impact on the economy.
The second reason was due to actual wage growth. Cramer thinks the Fed saw that employment was stronger, but wages were not. This was contrary to what the textbooks say should happen.
The third reason was that the national economic narrative changed to be protectionist over U.S. jobs. Cramer sensed that the election has been all about protecting the U.S from foreign countries that want to take jobs away.
Finally, the entire holiday season was dominated by the digital economy. It was clear to Cramer that the Internet, coupled with globalization has produced a lower standard of living.
This toxic cocktail of issues, combined with government mandated health care costs and skyrocketing rents was the reason why Cramer thinks it was too much for the Fed to bear.
Target shares have roared 14 percent higher in 2016. Cramer spoke with Target Chairman and CEO Brian Cornell about what could be behind the company’s success and what to expect this year.
According to Nielsen, millennials are a social generation with the majority now opting to live in mixed-use communities found in urban areas. Target recognized the migration of millennials to urban areas and has now focused on opening locations in these communities.
“We know 75 percent of millennials, if you talk to them today, they want to live in cities and around college campuses. So, we are simply just following the consumer,” Cornell said.
With tax season just around the corner, Cramer wondered what the heck is going on with Intuit, the company that millions of people use to file their taxes via TurboTax and Quicken and that small businesses use to manage accounting via QuickBooks.
Last summer, the stock traded at an all-time high, but then after reporting a weak quarter, the stock plunged more than $23 in just three sessions. Cramer spoke with Intuit’s chairman and CEO, Brad Smith, to find out if the stock could have more room to run.
“We serve these small businesses, who one out of two fail in the first five years. Our goal is to make the odds of success in their favor, and those are the people we are fighting for every day,” Smith said.
Cramer has received a lot of questions from investors lately who want to know if it is a good time to invest in a real estate investment trust (REIT). This was why he decided to speak with Ventas Chairman and CEO Debra Cafaro.
Ventas is a health care REIT that owns more than 1,200 properties across the U.S., U.K. and Canada. This includes senior housing, medical office building, hospitals and nursing facilities.
“We think we have a great portfolio. We think it’s very resilient. We projected 1 to 3 percent same-store growth in 2016, and we think our portfolio will continue to perform and certainly be incredibly well positioned in the intermediate term when this wave of seniors comes at us in 2020,” Cafaro said.
In the Lightning Round, Cramer gave his take on a few caller favorite stocks:
American Tower: “I have liked American Tower for ages. They have been acting terribly. Suddenly they have come alive with pleasure. What I suggest to people is that they buy, not sell.”
Seagate Technology: “I want to hold Seagate. Western Digital priced a very big bond dealing … it looks like right now it’s OK. I don’t want to buy it, I don’t want to sell Seagate.