As oil prices (New York Mercantile Exchange: @CL.1) teeter at $53 a barrel, Jim Cramer drilled down on how investors should play what looks like a temporary ceiling for crude due to a growing glut of U.S. oil.
The Permian Basin, stretching across western Texas and southeastern New Mexico, has been a hot spot for U.S. drillers, particularly since a group of OPEC and non-OPEC oil producers agreed to production cuts in November.
Those output cuts now look like they may be extended , perhaps in an effort to curb oil's decline, but U.S. producers are instead taking advantage.
"OPEC's discipline means nothing in the face of the huge production increases coming from America — 100,000 new barrels every single month — thanks to terrific technology that makes it much easier and cheaper to pull oil out of the ground," the " Mad Money " host said.
Cramer also looked into cancer and immunotherapy play Incyte (NASDAQ: INCY), a bitoech that has been soaring of late and is capitalizing on one of the hottest areas of the drug business.
The company recently filed an offering to sell over 34 million of its shares, which Cramer said could provide an opening for a well-priced buy.
And the company has been the subject of numerous takeover rumors, and while Cramer never recommends a stock on takeover speculation, he said an acquisition would be "icing on the cake" and could drive the $138 stock up to $200.
"I bet this baby's got more room to run," the "Mad Money" host said. "Ideally you buy a little now – I wish it had been down today – and then wait for that secondary offering to price just in case the stock pulls back and it gives you a better entry point."
Another company that looks like it has much more room to run is the far-reaching International Flavors & Fragrances (NYSE: IFF). Cramer spoke with the CEO, Andreas Fibig, for his take on how consumers' tastes are evolving.
IFF's business hinges on science and innovation, developing everything from drink flavors to scents for fabric softeners to perfumes. The company has acquired five others in the past two years, a move Fibig said will build growth.
It also puts IFF in the lucrative businesses of skincare, hair care, and other cosmetics all made from natural ingredients, which Fibig has noticed consumers have started to prioritize. The company even has a patent on technology that draws 100 percent natural, sustainable ingredients from various waste streams.
"That's the reason why we went into that kind of technology," the CEO said. "What everybody wants now in the U.S. ... is a clean label, so not too many chemicals on the label. And that's something which helps us to facilitate that market trend."
The semiconductor business has been a hot 2017 play, but the segment's leaders, Advanced Micro Devices (NASDAQ: AMD) and Nvidia (NASDAQ: NVDA), have been getting hammered, so Cramer took to finding out what is causing their pullback.
"The truth is, what's happening here has much less to do with the semiconductor business than it does with the ... actual business of money management — the perception of what's a bargain versus what's expensive in a portfolio manager's eyes," the "Mad Money" host said.
So while Cramer insisted there is nothing wrong with either company, if you are nervous about owning them, he suggested buying a diversified name like Broadcom (NASDAQ: AVGO), an inexpensive stock like Intel (NASDAQ: INTC) with its promising Mobileye (NYSE: MBLY) partnership, or one of the semiconductor suppliers.
Finally, for Cramer, Thursday's big bank earnings reports could not be more important to this ailing market.
Bank stocks exploded after the election, but since March, weak employment numbers and the GOP's health care defeat dragged the big banks' shares down.
So with the market slumping from stalling in Washington, foreign policy tensions, expensive stocks, and more, this inflection point needs a resolution, whether it comes in the form of strong earnings reports from JP Morgan (NYSE: JPM), Wells Fargo (NYSE: WFC) and Citigroup (NYSE: C) or progress in Washington.
"For the moment, we're at a level where things need to go very right for stocks to move higher, and those long odds make for a, yes, suboptimal start to earnings season," Cramer said.
In Cramer's lightning round , he sped through his take on some caller favorite stocks:
SemGroup (NYSE: SEMG): "It's a good company. It's a good company. It fits the profile and it's a good company. It does a lot of gas liquids, it's a very good company. I've got a good call."
AMC Networks (NASDAQ: AMCX): "Yeah, you know, it's at kind of an interesting level, and it's good. And these content companies became king again. I like your choice."
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