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What matters most for the stock market, a thaw in the trade war with China or a weakening of economic data? Jim Cramer told his Crazy money viewers Thursday that investors do not have to choose. Today, we had both and it was a one – to – two hit for bears.
Thursday's recovery was boosted by the ISM Manufacturing Index, which showed that our economy was actually starting to cool down. Cramer said the report could give the Federal Reserve the ammunition it needs to escape rising interest rates and wait to see what happens next. After all, the Fed is worried about inflation, but Cramer said that with falling prices for oil, wood, metal and other commodities, inflation could simply take over .
Then there is the presidential tweet announcing that China and the United States had their first "good" speech on trade in what appears to be months. This news was great news for Starbucks (SBUX), which said China remained its strong growth market, as well as many other companies and sectors doing business in China.
Even semiconductors have seen some recovery, although they were one of the most battered sectors recently.
Finally, there is the elephant in the room: Apple (AAPL), the holding Action Alerts PLUS which has recorded a remarkable quarter, but investors are worried about it anyway.
Cramer said that Apple's ecosystem remained solid and that the stock was up sharply since the quarter, which is why it is not a seller, even if there is a weakness in short term Friday.
Cramer and the AAP team are closely monitoring the results and volatility of the markets. Find out what they say to their investment club members and join the conversation with a free trial subscription at Action Alerts PLUS.
Large pharmaceutical companies become toxic
Cramer told viewers that great pharma values represented safety in times of weakness, but this is no longer the case. While many drug stocks have recovered today, this move could be short-lived.
Cramer said he was a big fan of Allergan (AGN), but even after a difficult quarter, analysts are still questioning whether CEO Brent Saunders is generating enough value. AbbVie's shares (ABBV) were crushed by investor anxiety over increased competition. Gilead Sciences (GILD) is trying to recover, but few people, including Cramer, see this shift happening anytime soon.
Cramer stated that he saw no resistance in stocks such as Bristol-Myers Squibb (BMY) and that, if Baxter International (BAX) shares could fall 10% in a single day, this would not be a problem. was not a place where he would put his money.
On the subject of real money, Cramer says that it's worth remembering why the FANG shares have been so great and how they will come back. Get more of his ideas with a free trial subscription to real money.
Executive decision: GW Pharmaceuticals
In an exclusive "Executive Decision" segment, Cramer has been keeping up with Justin Gover, CEO of GW Pharmaceuticals (GWPH), an action up 30% for the year, of which 7% Thursday, to news indicating that the FDA and the DEA will allow the company to sell its medicine against epilepsy in the United States
According to Gover, GW has been working on this drug for 20 years and today marks a milestone for his company. They hope that their medication will have a significant impact on the lives of their patients.
Gover explained that the FDA places a very high bar with regards to the safety and effectiveness of the drugs that they approve. GW has worked tirelessly to provide the true science that proves that his medication is worthy of this approval.
GW does not intend to slow down. Gover said they were working on additional indications for their current medications and on studies in place to treat autism, pain, and oncology. "There is still a lot of research to be done," he concluded.
Unlike many other cannabis producing companies, Cramer said GW was a true company with real science and real profits.
Decision of the executive: Proofpoint
In his second Executive Decision segment, Cramer spoke with Gary Steele, president and CEO of the Proofpoint Cybersecurity Company (FPTP), who saw his shares fall by 15% last week after announcing a profit beat by 12 cents a share. Shares were able to gain 2.8% in Thursday's session.
Steele said that cybersecurity remains a profitable business and that the threat landscape only worsens for most companies. He said that Proofpoint's activities are guided by the cloud as well as by international demand. Labor markets remain tense, he said, and they do not find talented people as quickly as they would like.
When asked about the Microsoft Competition (MSFT), Steele said that customers wanted a complete, world-class security solution. As customers migrate to Microsoft with their Office 365 products, it has been a catalyst for Proofpoint.
Even the Securities and Exchange Commission is starting to take cybersecurity seriously, he added, warning companies to take a critical look at their infrastructure and make safety a priority.
Executive Decision: Federal Real Estate Investment Trust
For his latest "executive decision," Cramer contacted Don Wood, President and CEO of Federal Realty (FRT), the REIT mall that recorded its best quarter ever.
Wood admitted that bond yields were increasing, making them more competitive compared to Federal Realty's 3.2% dividend yield. But, he added, federal bonds are not tied to bonds, capital appreciation and a long tradition of shareholder returns. Federal Realty is a very special REIT in this regard, he added.
When asked about his activity, Wood explained that consumers were fed up with driving and traffic. That's why Federal shopping centers, some of which now include office buildings, are great for living, working and playing without having to drive. The company has just added two office buildings for Splunk employees (SPLK) and Wood said the reactions so far were fantastic.
Finally, when asked about bankruptcies in the retail trade, Wood said every open space in their centers was an opportunity for growth.
Lightning Tower
In the Lightning Round, Cramer was bullish on Covanta (CVA), Cypress Semiconductor (CY), Colgate-Palmolive (CL), Estee Lauder (EL), The Blackstone Group (BX) and Match Group (MTCH).
Cramer was bearish on Biogen Idec (BIIB), Carrizo Oil & Gas (CRZO), Allstate (ALL) and Ubiquiti Networks (UBNT).
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