The late September faint is here and it’s time to take some evasive action, Jim Cramer warned his Mad Money viewers on Friday. This means investors need to lock in their earnings, raise funds, and even sell short to protect their positions from a historically tough time for stocks.
The good news is that the important averages have already been reached, which eases the pressure. A negative market is also easily impressed.
On Real Money, Cramer explains why oil continues to soar. “Let’s see why the rally can continue for oil and natural gas and look at this striking Diamondback Energy takeover.” Get the full story and more information about Cramer’s investments.
Cramer’s game plan for next week began with his eyes on China, where Evergrande, a huge conglomerate with $ 350 billion in debt, could default and impact U.S. markets. We’ll also hear from home builder Lennar (LEN) – Get the Class A report from Lennar Corporation, which will provide an update on the housing market.
Then on Tuesday we’ll see if there’s any good news at FedEx. (FDX) – Get the FedEx Corporation report. Cramer will also look at Adobe (ADBE) – Get the Adobe Inc. and working day (DAY) – Get the Workday, Inc. (WDAY) report, two of his favorite cloud stocks.
The Federal Reserve will make a decision on interest rates on Wednesday, and Cramer expects the market to react negatively to anything they say, especially when it comes to the federal debt ceiling.
Thursday brings income from Costco (COST) – Get the Costco Wholesale Corporation report, Nike (NKE) – Get the NIKE, Inc. (NKE) report and Darden Restaurants (DRI) – Get the report from Darden Restaurants, Inc. with a Dell analyst meeting (DELL) – Get Dell Technologies Inc Class C report. Cramer told viewers to be careful with Nike, but said he would buy Costco after their reporting and Dell after the meeting.
Finally on Friday, Fed Chairman Jay Powell will speak, but like Wednesday, nothing he says will likely be viewed in a negative light.
Executive decision: Builders FirstSource
In his first segment “Executive Decision”, Cramer spoke with Dave Flitman, President and CEO of Builders FirstSource (BLDR) – Get the Builders FirstSource, Inc. report, the building materials supplier with 550 sites in 39 states.
Flitman said Builders FirstSource operates in 84 of the top 100 markets in the United States, with the majority of its revenue coming from single-family home construction. About 12% of sales come from multi-family units, he said, and a further 12% from professional repair and home improvement markets.
Asked about the state of the housing market, Flitman explained that the United States had been under construction for years, but in 2020 home builders started to pick up the pace. Then, as the pandemic struck and homes warmed even more, providers just weren’t ready to cope, especially once the COVID closures started. This has led to shortages and cost inflation in many categories, from lumber to doors and windows and beyond.
However, there are still opportunities to be seized. Flitman said Builders FirstSource is going digital, moving its 700 designers and engineers to fully digital workflows that could represent a billion dollar opportunity for the company.
The stock market faces many challenges, from inflation and negative earnings to supply chain issues and the looming debt ceiling debate, Cramer told viewers. But one industry that is more sustainable than most are real estate investment trusts, or REITs. Cramer offered his 10 favorites in the group.
The 5G wireless revolution is advancing, and that means cell tower FPIs are still in high demand, with American Tower (AMT) – Get the report from the American Tower Corporation and Crown Castle (CCI) – Get the Crown Castle International Corp report being the two best in this industry. When it comes to retail, look for Simon Property Group (SPG) – Get the report from Simon Property Group, Inc. for shopping centers and Tanger Outlets (SKT) – Get the Tanger Factory Outlet Centers, Inc. with a dividend yield of 4.2%.
Cramer suggested Prologis (PLD) – Get the report from Prologis, Inc. and Equinix (EQIX) – Get the report from Equinix, Inc. when it comes to data centers and technology, Ventas (video recorder) – Get the report from Ventas, Inc. for retirement homes and innovative industrial properties (IIPR) – Get the Innovative Industrial Properties Inc report for specialized industrial properties. All of these names have stability and good returns.
Get more trading strategies and investment information from Cramer and other contributors on Real Money.
Finally, Cramer recommended Iron Mountain (MRI) – Get the report from Iron Mountain, Inc. (IRM), which converts for storage of physical to digital records and has a yield of 5.5%, with Starwood Property Trust (STWD) – Get the report from Starwood Property Trust, Inc., which has an even higher yield of 7.7% which is rock solid.
Update on vaccine boosters
For an update on the state of the pandemic, Cramer checked again with Dr Eric Topol, founder and director of the Scripps Translational Science Institute.
Topol explained that while Pfizer (PFE) – Get the Pfizer Inc. asked everyone for permission to get booster shots, the data just didn’t support them, at least not yet. So the compromise was to allow them for high risk people and those over 65.
Topol added that all the “happy words” about the virus are not helping anyone. He said we are seeing more asymptomatic cases causing a lot of complications. Vaccines have always been scheduled for three injections, so boosters will be inevitable. But we’re not there yet for most people.
When asked about European “Green Pass” vaccination passports, Topol said they would be of great help in increasing vaccination rates in the United States, if only we allowed them here.
Oil barrels along
In its “No Huddle Offense” segment, Cramer looked at the price of crude oil, which once again exceeded $ 70 a barrel. He said that recently $ 70 was the tipping point where OPEC stepped in and increased supply to ease pricing pressures. But this time it’s different.
Cramer said U.S. shale producers have changed their playbook and are no longer drilling like crazy, allowing the Saudis to rake in higher profits. Even the most unruly growers, like Diamondback Energy (CROC) – Get the Diamondback Energy, Inc. suddenly acquired religion and does not turn on the oil tap.
This means that oil prices could increase dramatically in the near future.
Here’s what Jim Cramer had to say about some of the actions the callers offered during the “Mad Money Lightning Round” on Friday night:
Palantir Technologies (PLTR) – Get the Palantir Technologies report: “It’s a buy. I wish we knew more about them, but it’s a good business.”
Sands of Las Vegas (LVS) – Get the report from Las Vegas Sands Corp. (LVS): “The only casino you should buy is Wynn Resorts (WYNN) – Get the Wynn Resorts, Limited (WYNN) report. Las Vegas Sands is too exposed in Macau. “
Clearway Energy (CWEN) – Get the Class C report from Clearway Energy, Inc.: “You have a good stock there.”
Energy transfer (HEY) – Obtain energy transfer, LP report: “It’s a recklessly run business and that’s a shame.”
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At the time of publication, Action Alerts PLUS had a position in COST.