General comment: Goldilocks and the Federal Reserve
Cramer likened the Federal Reserve to Goldilocks, since the Fed wants an economy that is "not too hot and not to cold." Although many analysts have doubted that the Fed will raise rates on June 29, Central Bank chairman, Ben Bernanke, has indicated that another rise may be on the way. Cramer is not surprised, and cited cases when the Fed has unwisely raised interest rates at the expense of economic growth. On the other hand, Cramer considered the possibility that the Fed might merely be trying to cool off speculation with threats of raising rates. In either case, he says that there is no point trying to predict what the Fed will do this month, but to buy moderate amounts of stock in good sectors, such as oil, gold, and aerospace, that have fallen down, and to develop a well-diversified portfolio. Although many people are worried that an interest rate hike would strike yet another blow to tech stocks, Cramer suggests that Motorola (MOT) and Nokia (NYSE:NOK) will weather the storm, since many of their sales are overseas.
Gridlock is Good
Cramer dismisses fears that a House of Representatives controlled by Democrats will hurt the economy, and suggests that it can't be worse than the current situation of overspending and excessive borrowing, which has hurt the dollar. Cramer says that the best gains he has seen have occured when there was a Democrat in the White House and a Republican-controlled Congress, and believes that gridlock is good, because it keeps government too occupied to regulate the market.
Ameritrade (NYSE:AMTD): This stock is on a downward slide, but Cramer still likes it. He suggest picking up just bits and pieces now, because he is not sure where it will bottom.
Palm (PALM): Looking at Palm's activity for 2006 so far, Cramer notes that its chart resembles that of every winning stock on the Nasdaq.
Rackable (RACK): Cramer believes that RACK is a good company which is declining simply because it is a tech stock.
Motorola (MOT): Cramer believes that Motorola "has been in the penalty box for too long" and will redeem itself with a new line of products.
Goldman Sachs (NYSE:GS): Cramer prefers GS over Lehman Brothers (LEH), because he is not sure when LEH will bottom, GS is currently cheaper, and he prefers the management at GS.
Schering-Plough (SGP): Cramer says that this is the drug stock worth owning now, and although SGP may not equal the reward potential as Wyeth (WYE), it is definitely a safer play.
Mitsubishi (NYSE:MTU): Cramer owns this stock, and although he says that he is in "the house of pain" Japan will bounce back.
Boeing (NYSE:BA): Cramer likes this stock, but believes that it could fall further. He suggests hanging on to it, and not buying it until it bottoms out.
DR Horton (NYSE:DHI): Cramer believes that Fed chairman, Bernanke, has it in for copper and wood stocks. "He's killing the homebuilders, so I can't recommend them," Cramer said. "It's too soon, and a rally that starts too soon, fails."
More: Cramer's latest stock picks, including: Mad Money Recap, Lightening Round, Stop Trading and his Radio Show.