After a muted Friday trading session following a largely successful week for the stock market, CNBC’s Jim Cramer wanted to redirect investors’ attention to what could make or break this market.
“In many ways, next week will determine if this run can continue. Not because of earnings — we have almost no reports — but because of the president and the Fed,” the “Mad Money” host said.
But Cramer cautioned against trading around President Donald Trump’s tweets and his administration’s talks with U.S. trading partners. He argued that trade talks were “a work in progress,” saying investors should buy on trade-related downturns rather than fret about them.
“Think of it this way: we’ve had the best action in three months for the Dow and that occurred ahead of the Fed meeting, ahead of the G-7 meeting and ahead of the North Korean summit,” he said. “Worry has not been paying off here.”
With that in mind, Cramer turned to his weekly game plan:
G-7: Usually, summits like these mean very little to Cramer. But this year, the G-7 summit, which is being held in Quebec, Canada, is different.
“We know that relations with our allies are souring as the president regularly calls whole countries out as bad actors,” Cramer said. “I figure nothing good comes of it, but that is conventional wisdom, so if anything good does actually happen — good meaning, say, some give by our allies to solve the trade issue — then we could get a real boost next week.”
RH: The home furnishings retailer formerly known as Restoration Hardware will also report earnings Monday. Cramer expected RH to follow the uptrend seen in much of retail this quarter.
“Frankly, I think we’re witnessing a once-in-a-generation retail and apparel accouterments bull market, where these companies report good numbers and their stocks go up for three or four or five days, rather than just one or two,” he said. “I bet Restoration Hardware experiences something similar.”
North Korea summit: Like the G-7 conference, Cramer moderated his expectations for Trump’s meeting with North Korean leader Kim Jong Un.
“Nobody really expects anything big to come out of it. If something does, I believe the stock market will be ebullient but, again, the odds … [are] slim,” the “Mad Money” host said.
AT&T-Time Warner: Cramer anticipated a court ruling on the government’s challenge to AT&T’s attempted merger with Time Warner.
“Yesterday at TheDeal’s third annual Corporate Governance Conference, I had the privilege of interviewing Makan Delrahim. Now, he is the assistant attorney general for antitrust,” Cramer said. “I think his brief, holding that the consumer could be a loser if this deal is consummated, has a very good chance of winning, although you need to know that I’m very much in the minority.”
“More important, he talked about being a powerful antitrust enforcer, more powerful than his predecessors, which suggests to me that he might keep trying to block this merger even if he loses on Tuesday,” Cramer continued.
Comcast: Citing CNBC’s David Faber, Cramer noted that NBCUniversal parent Comcast could make a bid for the Twenty-First Century Fox assets being pursued by the Walt Disney Company.
“Assistant AG Delrahim had positive things to say about how Disney’s approaching the deal, cordoning off things that might make the transaction more problematic for the regulators,” Cramer said.
“Maybe Comcast will try to do the same thing to avoid the Justice Department’s wrath, agreeing not to seek certain pieces of the quarry. Either way, it will be [a] momentous day in media land.”
Federal Reserve: With a potential interest rate hike on the horizon, Cramer stressed the importance of the Fed’s Wednesday meeting.
“I’ll say this: if the market takes this well-telegraphed rate hike poorly, that might be another chance to do some buying into weakness,” he said. “Remember there’s always someone who doesn’t know or doesn’t believe that the Fed is going to tighten, so [they] panic, and that’s where the opportunity comes in.”
The Michaels Companies: Arts-and-crafts retailer Michaels will report what Cramer expected will be strong earnings on Thursday.
Jabil: Cramer also expected contract manufacturer Jabil to give the market some veiled insight about Apple’s business in its Thursday report.
“Remember, Apple is like Fight Club: the first rule of Fight Club is no one talks about Fight Club,” Cramer joked in a reference to the 1999 film.
“Apple’s stock was down today because of ‘industry sources’ saying the company’s cutting back supply orders pretty heavily,” he continued. “Jabil won’t be able to refute that story straight up, but even an oblique mention of how well Apple is doing and how many orders they’re placing with Jabil could go a long way toward putting the stock of the world’s largest company back on track.”
An analyst meeting at Centene could garner some higher guidance from the health insurer, which recently acquired the privately held Fidelis, the “Mad Money” host said.
“That said, Centene’s had a monster move and I think it may be too late to buy it, at least for the moment,” Cramer said. “Nevertheless, I still expect the meeting to be positive.”
