Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Friday, March 2.
The market reacted on Friday as well to Trump's tariffs on steel and aluminum. "This was not a reason to dump positions wholesale. If anything, it might even be a reason to do some buying on weakness. Panic is not a strategy, even when so many of the bears seemed determined to make you bolt from stocks at all costs. There's always a better time, even if you do want to sell, than right into the teeth of the fear and the chaos that causes a brutal decline," the Mad Money host said. With that, he discussed the game plan for the week.
Retaliation could be the theme for the day. If the US's trading partners retaliate with their own tariffs, the stock market will react.
Resignation could be the other theme for the day. Trump's chief economic advisor Gary Cohn is on resign watch, as he does not agree with Trump's tariffs plan. "Cohn is a steady hand. If he resigns, I fear some people will start worrying that there's too much chaos in this administration's economic team, and they'll figure it's time to do some selling. That could happen," said Cramer.
Ryerson Holding Corp. (RYI) will report earnings on Monday, and they could tell what retaliation would mean for the American industry.
Target has been a steady company, and its investments in e-commerce could start paying off. On the other hand, Cramer expects the strength in discount retail stores to trickle down to Ross Stores' earnings.
Dollar Tree's earnings can change the negative view of the market, as they can tell about the trade war, since goods made in China form a sizeable part of the company's business. "Nobody plays fair on trade, but nobody wants to start a real trade war either, and maybe by punishing some bad actors every now and then, we'll actually save some jobs in this country. If the world responds by slapping tariffs on a few iconic, but relatively unimportant, American brands, I say that's a small price to pay," said Cramer.
Costco stock is $10 off its highs, and it a potential buying opportunity. While Cramer is expecting strong earnings from the company, he feels that a weaker-than-expected quarter will just be an opportunity to buy.
Thor Industries, on the other hand, could be hurt from the tariffs, and the company might have a negative story to tell on the earnings.
Kroger (KR) will report on Thursday, but it faces competition from new rivals. "Last time Kroger beat the numbers handily, and you got a huge short squeeze. I think the stock's run too much since then. I would actually ring the register ahead of this quarter," Cramer noted.
The nonfarm report on Friday will be the most watched economic data in the week. "The whole February sell-off started when we got a hot payroll number. Interest rates spiked, which caused volatility to spike and led to the bizarre collapse of the averages as all those dopey traders who bet against the VIX got obliterated by the mother of all short squeezes and had to sell their stocks," he explained.
Don't get too emotional about trade. There could be a trade war which will impact stocks, but there is a greater good, and a bull market will be there somewhere else.
Cramer recollected views from CEOs of steel companies Nucor (NUE) and Alcoa (AA) about the effect of Chinese steel. Many companies in the US had to shut down due to the Chinese dumping steel at below the cost. China builds factories and sells the output of these below the cost to keep the workers employed. Same is the case with South Korea. They buy fewer American cars, while Americans buy a lot of their cars.
For many years, no one cared as steel mills kept shutting down in the US. The problem has gotten big enough that it has become a national security issue. Cramer also believes that the US cannot have a strong national defense without a robust steel industry.
Cramer dived into the numbers to test the effects of tariffs on the American consumer. He said that consumers will have to pay $100 extra per car or $0.03 more for a can of Coca-Cola. Trump won the election on his trade policies, and he is willing to take a small hit on earnings to avoid losses in the future.
Cramer continued to have a session of the sell-off strategy, where he takes viewers' calls and talks about ways to trade during a sell-off.
The first caller asked about Walmart (WMT). Cramer said he did not like the company's last quarter, and that he preferred Target instead.
The next caller wanted to know about the effect of tariffs. Cramer explained that companies that bought cheap steel for their products - say, pipeline companies - will prefer to buy it from American companies after the tariffs come into effect.
The last caller asked for Cronos Group (CRON) as an investment. Cramer said he's not a fan.
He continued the session and said that investors should watch the good stocks that go down during the sell-off but do not deserve to. Stay away from those stocks that are in the direct blast zone. Stick to the stocks that were working before the decline and buy them on weakness. This will keep investors well-positioned to take advantage of recoveries after the sell-off.
CEO interview - Randgold Resources (GOLD)
The stock of Cramer's favorite gold miner, Randgold Resources, is down 8.4% so far in 2018. Cramer interviewed CEO Mark Bristow to find out more about the last quarter's in-line earnings and what lies ahead.
Bristow said that he has seen such weakness in the industry previously, and it happens when one is mining gold for emerging markets. The company's assets still remain world-class, and it is searching for more opportunities in the sub-Saharan African region.
He also adds that cryptocurrencies are a fad and not an alternative to gold. This is the only currency that cannot be printed.
Viewer calls taken by Cramer
Triton International (TRTN): The high yields are not enough to protect the stock due to competition from bonds.
Brown & Brown Insurance (BRO): It's a good one, but the company splitting is not the reason to own the stock.
Baidu (BIDU): The tariffs could impact Chinese stocks due to the trade war. Cramer suggested keeping away from Chinese stocks until there is clarity on the trade war.
Sangamo Therapeutics (SGMO): There are better companies in the group to buy.
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