A Tale Of 2 Markets - Cramer's Mad Money (12/1/16)

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Includes: BCS, BLUE, CAT, CBG, CRM, DIA, F, HSIC, JUNO, NVDA, QQQ, WMT
by: SA Editor Eric McCaffrey

Summary

Cramer noted a rotation out of technology and elsewhere into oil, industrials and financials.

Bulls wanted an easy rotation, though with money running out of the rally, they are taking profits.

Interviews with CEOs of CBRE and Henry Schein.

Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Thursday, December 1.

It's a tale of two markets.

That's the message from Mad Money's Jim Cramer. In his Thursday show, Cramer outlined how Wall Street is divided on picking winners and losers. The winners? Industrials, energy and banks. The losers? Tech and healthcare.

The result of this ongoing rotation is that the Dow (NYSEARCA:DIA) (think industrials) set a record high during trading on Thursday, while Nasdaq (NASDAQ:QQQ) (think tech) slumped.

Wall Street continues to look at how Donald Trump's administration will help investors. Cramer emphasized that no doubt Trump will continue to be pro-business, but cautioned investors not to read too deeply into what's happening with the transition of power.

"Maybe the market has become too enthusiastic about Trump's agenda," he observed.

What's Cramer worried about? Not a lot of new money is moving into the market. Oil stocks may have run too high. And while Trump will be good for business generally, "we really don't know what Trump will be like once in office," Cramer said.

The Mad Money host warned there "will be pitfalls, there will be sell-offs, there will be buying opportunities, and selling opportunities for stocks flying too close to the sun."

His suggestion: Go against the grain and buy stocks getting hammered and sell shares that are climbing too high. And "strap yourself in for the next rotation."

CBRE Shows Strength

Cramer hosted Bob Sulentic, CEO of real estate services and investment company CBRE Group (NYSE:CBG). While the stock is down, Sulentic emphasized that the company's earnings are up 10%.

Sulentic also talked about overseas markets. He said Europe is doing well for the company despite concerns many have regarding that economy. "The fundamentals are better," the CEO said.

And the U.S. is showing increasing strength. Sulentic said rental rates and occupancy are both going up. And the new Trump administration could be another positive, especially if regulations are cut back and taxes are lowered, he noted.

Go Slow

A lot of post-election excitement has flowed into the market. What should investors worry about as markets move?

Cramer offered some examples of market moves investors should watch carefully.

Caterpillar (NYSE:CAT) has seen its stock rise on the promise of increased infrastructure spending. But the company warned that current 2017 consensus earnings estimates may be too optimistic. Nonetheless, the stock still climbs.

And then there's Nvidia (NASDAQ:NVDA), which is up 165% for the year. But the stock is selling off as part of the bigger sell-off in tech. Fund managers may be taking money out of Nvidia and putting it into industrials.

Cramer warned there will be speed bumps as the markets move ahead. He suggested investors moving into the market do so with small purchases here and there. Pullbacks in stocks could present opportunity, he said.

Henry Schein Continues To Shine

Dental and healthcare products company Henry Schein (NASDAQ:HSIC) has seen its stock impacted by the recent rotation. While shares are down, CEO Stanley Bergman told Cramer that Henry Schein is a "consistent earner" with strong sales, EPS growth and profits. He also emphasized the company's effort to buy back shares.

In addition to its dental business, Henry Schein also has animal health and vaccine businesses. The animal health business is doing especially well in Eastern Europe, Bergman said.

In addition to maintaining internal growth, the company also will focus on key acquisitions, he added.

Beware Biotech

Cramer offered his take on the inherent risks associated with biotech.

Case in point Juno Therapeutics (NASDAQ:JUNO), which announced it was putting its leukemia drug trial on hold after some patient issues were reported. In response to that news, the stock was hammered, as were other companies operating in the same group.

On the other hand, Bluebird (NASDAQ:BLUE) reported positive clinical data for its drug, and shares popped on the news. In this case, however, the positive development didn't help the rest of the sector.

Both Bluebird and Juno operate in the cancer immunotherapy group. Cramer said while good news doesn't really impact the rest of the sector, bad news almost always delivers a negative impact.

His message: Although biotech companies each work on a different drug, they are still in the same category, and you haven't spread your risk around adequately if you're invested in stocks within the same sector.

Calls Taken By Cramer

Wal-Mart (NYSE:WMT): Cramer doesn't think there will be a stock split.

Ford (NYSE:F): Not the most exciting stock, but Cramer said he wouldn't sell.

Barclays (NYSE:BCS): The Mad Money host said investors were too negative on Brexit, but the U.K. economy is rebounding. He likes the stock.

Salesforce (NYSE:CRM): The company reported one of its best quarters. But it's impacted by the rotation out of tech stocks. "Let it rain a little more" and buy on a drop, said Cramer.

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