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Recap of Jim Cramer’s comments on Wall Street Confidential, Thursday January 4. Click on a stock ticker for more analysis.

Caterpillar (CAT), Phelps Dodge (PD), Guess (GES), Costco (COST), Home Depot (HD), Lowes (LOW), WalMart (WMT), Alcoa (AA), Altria (MO), AIG (AIG), Honeywell (HON), IBM (IBM), Johnson & Johnson (JNJ), Pfizer (PFE), McDonald's (MCD), Microsoft (MSFT), Hewlett Packard (HPQ)

Cramer noted the volatility in the market on Wednesday and attributed it to the fact that the Bell South sale sparked a lot of futures selling, but since the deal is over, the money will flow back. He thinks that the lift in futures was due to a cessation of selling rather than buying. Cramer was disappointed to see that companies that were less consumer sensitive were left standing, and would have preferred to have seen Caterpillar and Phelps Dodge weather the storm. Cramer wanted to see manufacturing or offensive stocks do well and housing and retail get hit so at least the decline could be contained within those sectors.

Aaron Task noted that the holiday season was not a bright one for specialty retailers, and Cramer responded that there is a "secular change in retail" with the high-end "booming." He says the action is in the "aspirational retailers" such as Guess and Costco, but since retail performance was mixed, he doesn't want to focus on these companies too much. Cramer predicts that HD will perform well this year, although "the stock can't sustain a 2-point gain until the numbers turn." He likes HD because housing is bottoming, but prefers LOW.

Turning to other stocks, Cramer said Walmart was "awful," AA will be bought, and that MO will split up. "People don't understand that because Altria has held back its buyback, it has a tremendous amount of cash," Cramer said. The future of AIG, says Cramer, will depend on when Hank Greenberg stops selling shares. Cramer remarked that HON was undervalued, IBM was a cheap, low multiple tech stock, and that "king of marketing" JNJ would succeed with Pfizer's products. Microsoft will gradually rise because of Vista and HPQ should get some benefit, since Vista is "huge."

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Source: Jim Cramer's Picks on Wall Street Confidential, Jan. 4