While simultaneous upward moves in the markets might sound like good news, Jim Cramer saw one report on Wednesday preaching caution about the “everything rally.”
“This morning we wake up to a starkly negative headline — here we go — in the Wall Street Journal: ‘Markets Rise in Lockstep, Raising Worries of Reversal,'” the “Mad Money” host said. “The big concern? Stocks, bonds, gold and Bitcoin are all moving up in unison, which makes the market ‘vulnerable to sharp reversals.'”
Cramer is never one to say that the market is immune sharp downturns, especially with a president he finds to be “capable of some acts that, let’s just say, were a little unthinkable in previous administrations.”
Then, after a decently calm Wednesday that lifted the major averages, Cramer says Thursday’s James Comey testimony, U.K. snap elections, and European Central Bank meeting can seem downright perilous to Wall Street’s bears.
“The hand-wringers will be out in full force,” he warned. “I bet the same people who told you to sell the last time [Donald] Trump was in trouble — the ones who think this rally is predicated on total Trump policies — will tell you to sell again. I’m sure the same people who bolted when Brexit occurred already have one foot out the door. I can promise you there are people who will genuinely flip out if the ECB indeed does remove [its] stimulus.”
To make matters worse, anything bad that happens will undoubtedly be tied to next week’s Federal Reserve meeting as a reason for the Fed to not raise interest rates, Cramer said.
But the bulls have their own agenda. They want the noise, the stress and the worry because they are eager to see their must-buy stocks go lower so they can buy them at a bargain.
So, for those who did not receive a bullish bad-headline shopping list, Cramer laid out 15 stocks that the bulls want desperately to buy into weakness.
In light of the annual American Society of Clinical Oncology meeting, Cramer decided to sift through the stocks of companies that attended to find the best and worst performers.
The ASCO conference’s biggest gainer was Loxo Oncology. Shares of Loxo climbed from $49 to $70 in a massive 43 percent move on Monday after the company rolled out promising data for two of its major drugs.
“I think Loxo is a very exciting story, but it’s very difficult to come into a stock after a 43 percent move without feeling like your chasing it,” the “Mad Money” host said. “Maybe let’s just let this thing cool off.”
But Cramer also found one of ASCO’s hidden winners, bitoechnology giant Incyte, which saw its shares fall after the meeting.
“I think the expectations simply got ahead of themselves,” Cramer explained. “Personally, I’d view this weakness as a chance to do some buying as Incyte has a very deep pipeline with excellent prospects.”
In such a strong market, Cramer finds it fruitful to single out the big winners, the stocks that, rather than being lifted by the market’s strength, are actually driving it.
So the “Mad Money” host turned to Intuit, the parent company of TurboTax and QuickBooks, tax-filing and accounting software programs beloved by both individuals and small businesses.
Intuit’s stock has rallied almost 25 percent year to date, with TurboTax taking huge market share from competitors. Since Tax Day, shares of Intuit have climbed over 20 basis points.
“Look, I’m not complaining. I’ve been a big fan of Intuit and its terrific CEO, Brad Smith, for a long time,” Cramer said. “But if you believe that the Trump administration can pass some kind of major tax reform bill, something that could simplify the tax code dramatically, then Intuit’s one of the last stocks that should be roaring here. This is an anti-Trump stock. Yet it keeps going higher.”
To make sense of Intuit’s move, Cramer delved into its business to see what keeps the stock ticking higher.
Finally, Cramer turned to the stock of surgical robotics company Intuitive Surgical, which has performed relentlessly since Cramer started recommending it in 2005.
Though Canaccord Genuity analysts downgraded Intuitive’s stock last week, Cramer touted management’s know-how when it comes to buybacks and keeping the stock price afloat.
“These guys are pros who are buying stock right along with you on any big downturn. I like that,” the “Mad Money” host said.
And while he understood the reasons for the downgrade, Cramer said he would still be a buyer because of the smart way the company uses new products and buybacks to boost business.
“Historically, the earnings estimates for ISRG have been proven too low, sometimes way too low. Intuitive Surgical has a habit of blowing away the numbers, and I bet this time will be no different. And yes, it deserves to trade at a premium to its peers. It’s better,” Cramer said. “I defy you to find me another profitable medical device company with double-digit revenue growth and nearly 20 percent earnings growth.”
In Cramer’s lightning round, he sped through his take on some caller favorite stocks, including:
Xilinx: “I think Xilinx will be taken over. I think Xilinx is an inexpensive stock. [CEO] Moshe Gavrielov has really turned it around. I’m a buy, buy, buyer of Xilinx.”
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