Cramer's game plan: Profits push the market past federal news
Despite the Labor Department's Friday jobs report missing estimates, the market still went higher, telling Jim Cramer that Wall Street is really only interested in one key factor.
"It's the same story that we've seen all year, the same one I've been coming with the same one I've been telling you: it's about profits," the " Mad Money " host said. "Yep, corporate earnings have been so positive in 2017 that investors are reluctant to sell because from an asset class perspective, stocks are pretty much the only decent game in town, unless you think that 10-year Treasurys yielding 2 percent are a good place to put some money."
Stocks hardly shook when President Donald Trump announced the United States would pull out of the Paris Agreement , Cramer added.
"The stock market charges ever upward, oblivious of Washington, even as I now worry about an upcoming fight over the debt ceiling," he said.
With the market's unfaltering attitude in mind, here are the stocks and events Cramer will be watching next week:
Monday: Thor Industries (NYSE: THO)
The world's largest recreational vehicle manufacturer in the country will report earnings on Monday, and Cramer has been very right and very wrong on the stock's movements.
Before Thor reported its last quarter, the "Mad Money" host did not advise investors to sell, assuming that the company would not deliver a bad quarter.
But its stock fell nearly 10 percent after the report as the market's worries about Thor's shrinking profit margins manifested, bringing shares down to 5 percent for the year as of Friday.
"I'm tempted to believe that Thor has course corrected, but you know what? Here on 'Mad Money,' it's kind of like the NHL. We put companies in the penalty box ... so I'm adopting a wait-and-see approach for Thor," Cramer said.
Tuesday: HD Supply Holdings, Dave & Buster's
HD Supply Holdings (NASDAQ: HDS): If you are looking for a company that gives you a good read on the economy, Cramer says to look no further than this industrial distributor, which provides an array of products to 500,000 customers in construction, maintenance, and water infrastructure.
"Last quarter, the read-through was sub-optimal and the stock got hammered. Plus, HD Supply's commentary caused many a well researched bull ... [to] correctly ratchet back their economic growth expectations, especially for small and medium sized businesses after listening to this company's conference call. Soon after, though, Jana Partners, the activist hedge fund, said it liked HDS and thought the stock, which is at $41, could go to $60 on a sale. Hey, let's see if they comment on that," Cramer said, referencing the company's Tuesday earnings report.
Dave & Buster's (NASDAQ: PLAY): Cramer expects terrific earnings from the restaurant and entertainment center company when it reports after the bell. The "Mad Money" host expects Dave & Buster's, a staple to the experiential economy, to announce expansion plans as well.
Wednesday: Brown-Forman (NYSE: BF.B)
In most cases, Cramer would not focus on earnings from the wine and spirits giant behind Jack Daniels whiskey, but chatter of Constellation Brands (NYSE: STZ) eyeing Brown-Forman as a takeover target caught his eye.
"I think that would be very out of character for Constellation. It's been growing by picking off high-end boutique brands, then exploiting [them] through its fabulous distribution network to blow away the numbers," Cramer said. "That said, where there's smoke, I don't know, maybe there's a little fire, if not a conflagration, as this is a family-run two-classes-of-stock business, meaning even if Constellation was interested in buying, it would have to be Brown-Forman wanting to sell. Still, it will be a closely listened to conference call because of that rumor."
Thursday: The J.M. Smucker Company, Vail Resorts
J.M. Smucker (NYSE: SJM): This manufacturer of jams, peanut butter and pet food will report earnings, and the "Mad Money" host is watching for an upturn after several disappointing quarters.
"It seems that there's been endless price wars in their aisles in the supermarket and it's crimped their earnings power," Cramer said, adding that Smucker's new organic products could improve its prospects. "Is that the case now? Tough to tell, but I don't think long-term holders will be hurt if they pick some up after the quarter."
Vail Resorts (NYSE: MTN): The ski resort operator will report earnings before the bell, and Cramer blessed it as a trade.
"This has been a terrific story for some time," he said. "Vacations have become Facebook rites of passage and Vail's been benefiting from this trend for ages."
Friday: Federal Reserve anticipation, Baker Hughes rig count
Fed : Cramer says a selloff is possible ahead of Fed meetings on Tuesday and Wednesday of the following week if the market gets worked up over this Friday's lagging jobs report .
"Remember, most investors and all holders of bank stocks, for heaven's sake, which have been horrendous, want to see the Fed raise rates as a sign of economic health. We're in the odd position of worrying that the Fed might not tighten after this weaker [labor] report that we got this morning. If they do nothing, there will be selling, so why not get out ahead?" Cramer said.
Baker Hughes: The "Mad Money" host advised investors to keep an eye on the weekly rig count from this oil field service company.
"Crude's come under pressure any time we get a big jump in rigs," he said. "Why does it matter so much? Because each rig can produce a ton of oil and whatever OPEC tries to keep off the market has been more than made up by our own oil companies in shales like the Permian in Texas, SCOOP and STACK in Oklahoma and the Bakken in North Dakota."
So as the stream of earnings reports gets thinner each week, Cramer finds the market laser-focused on how businesses are doing, looking for telltale signs of how the economy is faring.
"The earnings have counteracted all sorts of economic weakness and allowed stocks to continue their remarkable 2017 run," he said. "We've got some concerns about the upcoming Fed meeting but I expect continued strength in the numbers from individual companies to continue to carry the day."
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