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Jim Cramer explained to his interlocutor that only one issue matters to the market. Crazy money viewers Tuesday. Is the impressive turnaround of the current market a legitimate, purchasable background? Cramer noted that the market had also progressed on Tuesday, but at that time, market technician Mark Sebastian felt that volatility had not been high enough and he was right. This week, Sebastian is more optimistic.
Cramer said another measure that he always referred to when calling a bottom is that when the volume decreases more than the volume increases by more than 9 to 1. Today, we have seen a ratio of 10 to 1.
But the real indicator of a possible hollow is profit. Today, McDonalds (MCD), which grew 6.3%, and Verizon (VZ), which recorded a 4% increase, posted exceptional results. Even Caterpillar (CAT) has produced excellent results, despite what you may have heard the opposite. Cramer said that he was buying Cat.
The only real negative point of the day was 3M (MMM). The benefits of 3M were simply unacceptable for this big company, said Cramer. His problems of execution must be solved quickly.
Where does all this leave the markets? Cramer confessed to being stuck between trade problems with China and a federal reserve that refuses to see the economy for what it really is. With housing and oil plummeting, the Fed will perhaps go to reality and end his speech rate hike.
On the subject of real money, Cramer talks about what to buy – but only when we observe a legitimate background. Get more of his ideas with a free trial subscription to real money.
Viewers have questions
After a hard day on Wall Street, Cramer took calls from viewers to find out what he thought of Cramerica.
The first caller asked where he should put his money when he wanted to buy a house in the next two to four years. Cramer said that given the short time frame, he would have put only 50% of the money into stock, while preserving the remaining 50% when needed.
Another called on savings for retirement in the current context. Cramer said the conventional wisdom was to be in the bonds approaching retirement, but given the low rates, Cramer advised to be 70% in stocks because stocks are the only way to get the yields you need.
Finally, a questioner asked about airlines, as the holiday season is imminent and oil prices are high. Cramer said the time had come to get into the airline's actions and that Southwest Airlines (LUV) remained his favorite.
Behind the great movement of Pulte Homes
What was the most spectacular event of the day? No, it was not the reversal of 500 points in the market, but a 7.2% jump in Pulte Homes (PHM). Does this mean that the housing sector could finally be at the bottom? Do not count on it.
The Fed's predetermined interest rate hikes have virtually halted the housing industry. A 5% mortgage rate is a limit in the sand for many buyers in terms of affordability. That's why Pulte recorded a 12% drop in the number of "starter houses" and was spared only a slight increase in the number of seniors, which rose 22%.
There are only two ways to boost housing, Cramer said. Either interest rates must be lowered, or house prices must be reduced, with additional incentives to attract buyers of their extremely low mortgages in recent years.
Cramer and the AAP team make funds available and buy some shares of Citigroup (C). Find out what they say to their investment club members and join the conversation with a free trial subscription at Action Alerts PLUS.
Executive decision: working day
For his "Executive Decision" segment, Cramer met Aneel Bhusri, CEO of Workday (WDAY), and Tom Bogan, CEO of Adaptive Insights, recently acquired by Workday.
Bhusri explained that Adaptive complements Workday's vision of a unified platform providing tools for planning, execution and analysis. Adaptive represents a $ 5 billion market opportunity for Workday.
Bogan added that Adaptive currently has more than 4,000 customers and that, combined with Workday, their growth will only be accelerated if it has access to the larger Workday business client base.
Bhusri said that to succeed, one must first and foremost solve the problems of the customers. Both companies share a happy customer base, which proves that they are doing their job well. Everyone needs planning, what Adaptive offers, and everyone needs to run and analyze what Workday provides.
Cramer said the combined company continues to go in the right direction.
Executive decision: Logitech International
In its second "Executive Decision" segment, Cramer again met with Bracken Darrell, President and CEO of Logitech International (LOGI), the maker of computer accessories that has just posted results mixed, which has caused confusion among many investors.
Darrell said the three areas to focus on were gaming, with 43 percent growth, videoconferencing with 25 percent growth, and Logitech's legacy device business, which had a modest gain of 8 percent. The Bluetooth speakers, which dropped during the quarter, accounted for only 1% of sales and were in transition while they were preparing to introduce the new generation of speakers.
Darrell added that they found no shortage of semiconductors or other components in China and could get all the parts they needed at any time.
Lightning Tower
In the Lightning Round, Cramer was optimistic about Ventas (VTR), Fifth Third Bancorp (FITB), Canopy Growth (CGC) and LKQ Corp (LKQ).
Cramer was bearish on Realty Income (O), KLX Energy Services (KLXE), STMicroelectronics (STM) and Heron Therapeutics (HRTX).
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