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Friday was a great day for the stocks market, but can this rosy action continue into next week? Jim Cramer told his Mad Money viewers that if earnings reports stay strong, the rally is likely to continue.
Cramer’s game plan for next week begins on Monday when he’ll be watching the earnings of PayPal (PYPL) – Get PayPal Holdings Inc Report and AMC Entertainment (AMC) – Get AMC Entertainment Holdings, Inc. Class A Report, along with chipmakers Advanced Micro Devices (AMD) – Get Advanced Micro Devices, Inc. Report and Nvidia (NVDA) – Get NVIDIA Corporation Report. He said PayPal is likely to be under pressure, but both of the semiconductors should remain red hot.
Next, on Tuesday, we’ll hear from Cramer favs Wynn Resorts (WYNN) – Get Wynn Resorts, Limited (WYNN) Report, Upstart (UPST) – Get Upstart Holdings Inc. Report and DoorDash (DASH) – Get DoorDash Report, all of which should be strong.
New record highs for stocks, favorable economic data and signs the worst of the supply chain woes is likely behind us… On Action Alerts PLUS, Chris Versace and Bob Lang talk about what all this means for investors and where they can find opportunities. Check out all their investing ideas and trading strategies on Action Alerts PLUS.
Wednesday brings earnings from more Cramer favs, including Wendy’s (WEN) – Get Wendy’s Company Report, coffee chain Dutch Bros (BROS) – Get DUTCH BROS INC. Report and Walt Disney (DIS) – Get Walt Disney Company Report, along with an analyst meeting from Mastercard (MA) – Get Mastercard Inc. (MA) Report. Only Disney is likely to see some selling, even if the company delivers on earnings.
Then on Thursday we’ll hear from retailer Tapestry (TPR) – Get Tapestry, Inc. Report and outdoor equipment maker Yeti (YETI) – Get YETI Holdings, Inc. Report. Cramer was bullish on these stocks as well.
Finally, on Friday, we’ll end the week with Astra-Zeneca (AZN) – Get Astrazeneca PLC Sponsored ADR Report, a drugmaker that’s gotten lost in war against COVID. We’ll also get the first public results from Warby Parker (WRBY) – Get Warby Parker Report, a stock which Cramer said he remains very skeptical of.
Executive Decision: Carvana
In his first “Executive Decision” segment, Cramer spoke with Ernie Garcia, chairman and CEO of Carvana (CVNA) – Get Carvana Co. Class A Report, the used car retailer that saw its earnings crimped due to supply constraints. Shares of Carvana opened sharply lower on the news, but managed to end the day flat.
Garcia said Carvana continues to see lots of demand, which is a good thing, but a shortage of vehicles continues to be a problem. When asked how long that shortage might last, Garcia said they’ve always struggled finding enough cars due to their fast growth, but this time might take awhile given how the entire supply chain has been affected.
Turning to the topic of labor costs, Garcia said Carvana’s inspection centers have become very efficient at inspecting, fixing and preparing cars for resale at consistent prices. So far, labor has not been an issue.
Finally, when asked about competition, Garcia noted that auto retail hasn’t changed in decades, which leaves a lot of room for innovation. Carvana aims to simplify the car buying journey for its customers, and that offers a lot of value.
Off the Charts
In a Friday edition of “Off The Charts”, Cramer checked in with colleague Carolyn Boroden over the charts of PayPal and Mastercard.
Boroden first looked at a weekly chart of PayPal, noting that the stock has floors of support between $220 and $224, and also between $199 and $203. She felt if the stock can hold above these floors, a rally to $255 is possible.
Boroden wasn’t quite ready to pounce, however. A daily chart of the 5-day exponential moving average and the 13-day exponential moving average did not signal a crossover event — at least not yet.
Similarly, a weekly chart of Mastercard showed floors better $321 and $324 a share, along with $313 and $315 a share. The daily chart showed the critical timing window, when things are likely to change, falls now, between Nov. 5 and Nov. 7.
If both stocks can hold above their floors, Boroden said she’d then be looking for a buying trigger.
Executive Decision: Weyerhaeuser
For his next “Executive Decision” segment, Cramer spoke with Devin Stockfish, president and CEO of lumber giant Weyerhaeuser (WY) – Get Weyerhaeuser Company Report. Shares of Weyerhaeuser are up 33% over the past year as the housing market continues to be strong.
Stockfish said the boom in housing is likely to continue for years to come. He explained the U.S. has been building less homes than it needs for decades, which has led to significant pent-up demand. Add to that favorable demographics with millions of millennials looking to buy their first homes and you’ve got secular growth that will be with us for a long time.
Stockfish then commented on Weyerhaeuser environmental initiatives. Weyerhaeuser is the largest private land owner in North America, and is responsible for millions of acres of trees and forests. That’s a job the company takes very seriously, Stockfish said, which is why it’s front and center in environmental discussions.
When asked about the volatility in lumber prices, Stockfish admitted that lumber has seen it all over the past year. At the onset of the pandemic, lumber prices plunged. A year later, they were at record highs as the Delta variant ran head on into strong housing and a strong repair and remodel cycle. Going forward, Stockfish expects lumber prices will continue to moderate back to more normal levels.
What to do With Pandemic Stocks
As the pandemic begins to wind down, what should investors do with the pandemic stocks? In his “No Huddle Offense” segment, Cramer ran down his list of opportunities and concerns.
In the opportunity column, Cramer was bullish on Tractor Supply (TSCO) – Get Tractor Supply Company Report, Etsy (ETSY) – Get Etsy, Inc. Report, boat maker Brunswick (BC) – Get Brunswick Corporation Report and Abbott Labs (ABT) – Get Abbott Laboratories Report, all of which have long-term growth that transcends the pandemic.
In the concern camp, however, were stocks like DocuSign (DOCU) – Get DocuSign, Inc. Report, which doesn’t have the growth to justify trading at 150 times earnings. Cramer also called out Moderna MRNA, which needs vaccines other than COVID to propel it forward. He was also bearish on Zoom Video (ZM) – Get Zoom Video Communications (ZM) Report, which also lacks a catalyst, and finally, Peloton (PTON) – Get Peloton Interactive, Inc. Class A Report, which is already down 63% for the year with no plans to turn itself around.
Lightning Round
Here’s what Cramer had to say about some of the stocks that callers offered up during the “Mad Money Lightning Round” Friday evening:
Service Corp (SCI) – Get Service Corporation International Report: “SCI is a long-term secular play. I’d buy some more.”
Digital World Acquisition (DWACU) – Get Digital World Acquisition Corp. Report: “This is a short squeeze situation that’s too hard to recommend.”
Gores Guggenheim (GGPI) – Get GORES GUGGENHEIM, INC. Report: “Rivian is coming public. Let’s let these EV stocks cool off.”
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