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China Blinked - Cramer's Mad Money (7/12/18)

Jul. 13, 2018 7:30 AM ETNFLX, MA, V, APRN, APC, KSS, BYD, PENN, CHDN, VICI, MAR, ADP, SAGE8 Comments


  • Opportunity in domestic gaming stocks.
  • Many large-cap stocks are cheap, and hence the market cannot be expensive.
  • Buy Kohl's when it goes down to the low $60s.

Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Thursday, July 12.

Cramer gave his theory that the stock rally on Thursday was because China blinked when it comes to the trade war. Many stocks from airlines, fintech plays, defense stocks, chipmakers and health care names rallied one day after US escalated the trade war with China. "When that happens and the stocks of American companies that do business in China start to rally, it emboldens other investors. People don't want to be crosswise with this one," said Cramer.

"China blinking is a key prop to this rally and it allowed all of the usual suspects that got hammered yesterday to go right back up," he added. Netflix (NFLX) was the only negative after a downgrade. The stocks of Mastercard (MA) and Visa (V) went up on the promise that they can expand in China with a joint partnership. Can American Express (AXP) also get through?

Casino and gaming stocks

Due to the trade war fears, international casino stocks have been under pressure for their exposure to Macau in China. However, Cramer gave a list of domestic players in the casino and gaming industry that could be worth buying. "Don’t get me wrong, I’m one of the few people who believe we can win this trade war and perhaps even win it quickly, but the risk-reward with the Macau-oriented casino stocks is very much against you," said Cramer.

Boyd Gaming (BYD) and Penn National Gaming (PENN) are two such stocks with over two dozen properties. "We’ve got a roaring economy and a very strong consumer who can afford to burn a little money, which is why we’re seeing a major uptick in gambling revenue in the places where it’s legal," he added.

The Supreme Court has

This article was written by

Mohit is the former Managing Editor for the Breaking News (India team) at Seeking Alpha. Currently working with Benzinga, he was with Seeking Alpha from January 2010 until August 2020. Before joining Seeking Alpha in January 2010, he worked with a start-up equity research firm in the capacity of a Team Leader tracking US company events and results.Born in the U.A.E, he spent most of my growing up years in Dubai. Currently, he resides in Mumbai, India.

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Comments (8)

Blink, blink.

Has it actually started??

Think just one stock. Facing the real threat of being shut down in China, and the prospect that it will literally take 2-3 years to rebuild that supply chain, and still end up with much higher per unit production costs, Apple tried this week to forestall the crisis by announcing a US$300 million "China Clean Energy Fund" for building 1 GW of renewables in China. But that likely is too little too late.

The nature of the highly efficient supply chain is such that even just doing final assembly still requires highly skilled, motivated laborers. Apple alone uses about 250,000 in China. Where else in the world can you replace that on short order?

Imagine no more sales or even exports of Apple products in and from China for a year, and what that does to Apple share prices and the stock market per se.

Has China blinked, I do wonder.
Z Hu profile picture
could someone enlighten me on what it was that China did in regards to blinking on the trade war?
flockof4 profile picture
Was wondering the same thing.
Cramer, what do you think of Hok Tan Hok Tan? You constantly recommended AVGO and now not a word. You are an irresponsible pastiche
Michael Delaney profile picture

What do you think of AVGO at current valuations? What is your opinion of Hok Tan?
John Naccarelli profile picture
If there are 'some cheap large cap stocks, the market cannot be expensive'. I don't know about the rest of the investment community, but that was EXACTLY the case in 1999-2000. What started in April 2000 an continued for two years? … That's right … a HUGE correction. How can you possibly forget that event and the bifurcation of the market in the preceding years?
This is just completely wrong advice.
flockof4 profile picture
Not saying you don't raise valid concerns; unfortunately we can't know until viewed through the lens of history. But...don't you think there is one big difference between 99/00 and today? That time period was the dawn of the internet with pie in the sky dreams. Venture capital being shoveled into the wind to see what grew. As it turns out a lot of it just blew away as those dreams turned to reality. Contrasted with today where these companies are cash generating behemoths. AAPL, GOOGL, AMZN, FB et. al. are machines and what rose from the ashes of the late 90's. Idk, I get worried too because everything seems expensive but what does that mean? I also don't think we are entering the 10th year of a bull run. More and more analysts are now writing about how there already was a reset in 2015/16 with many sectors correcting down 20% and we are now actually in a new bull market. I tend to agree with this though again, hard to say until viewed historically.
John Naccarelli profile picture
you are absolutely correct ... we won't know until we look in the rear view mirror. Yes, there are differences but there are similarities as well. The cryptocurrency boom and blockchain theme is the replacement for the internet boom of the 90's.
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