Cramer’s week ahead: The “old guard” of investors seems to be responsible for the market again
According to CNBC’s Jim Cramer, investors are optimistic about the introduction of Covid vaccines. This caused US stocks to rally on Friday.
The Dow Jones Industrial Average rose 453.40 points, or 1.4%, while the broad S&P 500 rose 1.7% to hit a record high. Tech-heavy Nasdaq ended the day after falling 0.8% at a point 1.2% higher.
“Virtually every sector recorded aggressive buying, with the exception of the once so hot, very expensive and difficult to understand technology stocks,” said the host of “Mad Money”. “I think it’s all about the ‘big reopening’ as the United States will have 240 million vaccines from Moderna, Pfizer and J&J by next week when they come up.”
The increased availability of vaccines means that bottled consumer demand is entering the economy sooner than expected, Cramer said. He pointed out that L Brands – the owner of Bath & Body Works and Victoria’s Secret – increased its earnings outlook for the first quarter on Friday. The company’s shares rose over 3% during the session.
“Reopening trade throws a wide web,” said Cramer. “I think the buy was so strong that it masked the endless liquidation of stocks that were once loved by younger buyers,” he added.
It’s not exactly clear where the new entrants were going, Cramer said. Nevertheless, he said, “the old guard seems to be in command again”.
“For once, the ‘Great Reopening’ trade felt hugely positive today … with many winners and very few losers,” he added. “If that’s the new norm, call me a happy camper, but let’s see if it lasts next week.”
Cramer offered his game plan for the upcoming winning list:
A sign is displayed at a Lululemon Athletica Inc. store in Pasadena, California.
Tuesday: McCormick & Company, PVH, Lululemon, Chewy and BlackBerry
McCormick & Company
- Fiscal Year 2021 First Quarter Results Before The Bell; Conference call at 8 a.m. ET
- Projected EPS: 59 cents according to FactSet
“We’re going to see how much this company thrives under the ‘big reopening.’ Here’s the problem: McCormick has a huge food service business serving restaurants and that was a real dog,” Cramer said. “But the stock has had a fabulous run over the past year as consumer business thrived under the ‘stay-at-home’ economy. I think people assume the stock has run its course after we got more than 2.5 million people vaccinated each day. “
- Fourth Quarter 2020 Results After The Bell; Conference call at 9 a.m. ET Wednesday
- Expected loss per share: 32 cents according to FactSet
- Fourth Quarter Fiscal 2020 Results After The Bell; Conference call at 4:30 p.m. ET Tuesday
- Projected EPS: $ 2.49 per FactSet
“Upon graduation, we’ll hear from a clothing company believed to be a victim of the pandemic, PVH, and one widely considered a Covid winner, Lululemon,” Cramer said. “I think the market decided that this was the time PVH was shining – it has been roaring since the vaccine rollout began in earnest. Lulu on the other hand … it was shunned because everyone thinks their stuff is the species of casual clothes that you wear when you stay home from work and nobody is looking at you. Let’s see what they have to say. “
- Fourth Quarter 2020 Results After The Bell; Conference call at 5 p.m. ET Tuesday
- Expected loss per share: 10 cents according to FactSet
- Fourth Quarter 2020 Results After The Bell; Conference call at 5:30 p.m. ET
- Projected EPS: 3 cents according to FactSet
Both Chewy and BlackBerry are stocks preferred by investors who congregate on online forums like Reddit’s WallStreetBets, Cramer said.
“The WallStreetBets crew like Chewy because they were co-founded by Ryan Cohen. He’s the man with the plan to turn GameStop around from his place on the board of directors,” said Cramer. “Blackberry is one of the meme stocks that caught fire in January thanks to a Reddit-induced short squeeze. I don’t see the appeal. Maybe the neighborhood can change my mind. Don’t hold your breath.”
Wednesday: Walgreens Boots Alliance, Micron and Dave & Buster’s
Walgreens Boots Alliance
- Fiscal 2021 Second Quarter Results Before The Bell; Conference call at 8:30 a.m. ET
- Projected EPS: $ 1.13 according to FactSet
Rosalind Brewer, the new CEO of Walgreens, is “one of my all-time favorite managers,” said Cramer. Hopefully she’ll tell us some of her plans to grow sales. Brewer comes from Starbucks where she was COO, and to speak to someone who owns Starbucks for my charitable trust, losing her to Walgreens was a big blow. “
- Second Quarter Fiscal Year 2021 Results After The Bell; Conference call at 4:30 p.m. ET
- Projected EPS: 93 cents according to FactSet
“I can’t wait to hear from Micron after close of trading, either. I believe both businesses – and that’s DRAM and Flash – are buzzing. I expect the numbers to go up significantly. The stock appears to be so anticipate, “said Cramer.
Dave & Buster’s
- Fourth quarter 2020 results after market close; Conference call at 5 p.m. ET
- Estimated Loss Per Share: $ 1.29 according to FactSet
“I suspect his stock will react well no matter what because it’s such an obvious reopening game. We saw it with Darden,” Cramer said, referring to Olive Garden’s parents. “I thought everyone knew Darden was going to be good. [The stock] went even higher. … I expect the same story from Dave & Buster. “
- Fiscal Fourth Quarter 2021 on the Bell; Conference call at 9 a.m. ET
- Projected EPS: $ 1.26 according to FactSet
“I think this will be the best quarter of the week. This will be the standout one as CarMax mainly sells used vehicles,” said Cramer. “At the moment the automakers are further reducing production because they can’t get enough semiconductors. That’s why more and more people are buying used ones and that is driving up prices. CarMax is in heaven.”