Has the bull finally met its match in a toxic mix of inflation and rising interest rates? It sure seemed like it Thursday, Jim Cramer told his Mad Money viewers, as the markets were met with a flood of selling in several key areas.
First, the semiconductors were rattled by the news that China will block the merger between Qualcomm (QCOM) - Get QUALCOMM Incorporated Report and NXP Semiconductor (NXPI) - Get NXP Semiconductors N.V. Report , a move that's in direct response to the U.S. blocking technology sales to the Chinese cell phone maker ZTE.
Next, the consumer packaged goods stocks were hit with paltry 1% growth at Procter & Gamble (PG) - Get Procter & Gamble Company (The) Report , news which sent shares lower by 3.2% by the close. Procter is dealing with rising inflation, particularly in transportation.
Inflation was also a theme of its own today, Cramer noted, as both oil and lumber saw additional gains.
Cramer said he still thinks the positives in the market outweigh any negatives, as a little inflation in a red-hot economy is to be expected. He remains cautious however, as inflation is only one of the issues the market is digesting on a daily basis.
Cramer and the AAP team say today's weakness is the opportunity they have been patiently waiting for. Their target? Nordstrom (JWN) - Get Nordstrom Inc. Report . Find out what they're telling their investment club members and get in on the conversation with a free trial subscription to Action Alerts PLUS.
The Race to $1 Trillion
In the race to become the first trillion-dollar company, there are four strong contenders, Cramer told viewers, and it's getting a lot closer than you might think.
Just a few months ago, Apple (AAPL) - Get Apple Inc. Report , an Action Alerts PLUS holding, was the early favorite and it looked like the company had no challengers. But amid reports of slowing iPhone sales, Apple's momentum is slowing, leaving an opening for Alphabet (GOOGL) - Get Alphabet Inc. Report , Microsoft (MSFT) - Get Microsoft Corporation Report and Amazon (AMZN) - Get Amazon.com Inc. Report .
Apple's current valuation is $877 billion, with Google, Microsoft and Amazon in a close race for second at $757 million, $740 million and $754 million respectively. Amazon announced today that it has 100 million paid Prime members, something the market is sure to love. Meanwhile, Microsoft is benefiting from strong guidance and a renewed focus on cloud services.
Finally, there's Google, which may now benefit from reduced expectations. Some analysts now feel that even an in-line quarter could be enough to get shares moving again.
Companies Vulnerable to Trade Troubles
Just because the daily rhetoric about trade wars with China is dwindling, it doesn't mean there aren't still a lot of companies that could be caught in the crossfire. Cramer said this week's collapse of Acacia Communications (ACIA) - Get Acacia Communications, Inc. Report could be the first of many volleys in the escalating trade battle.
In addition to the Commerce Department banning sales of telco equipment to Chinese cellphone maker ZTE, which led to the Acacia collapse, today we learned that Chinese regulators have antitrust concerns about the merger between Qualcomm and NXP Semiconductor. Cramer said this action is purely retaliatory, as this deal was announced in 2016 and up until now, no one has had any antitrust concerns. Shares of Qualcomm lost 4.8% while NXP fell 5.1% on the news.
How else might the Chinese retaliate? Cramer said additional merger "reviews" could hurt any merger with exposure to China. Also, any company dealing with the transition to 5G wireless, like Cisco Systems (CSCO) - Get Cisco Systems Inc. Report and Juniper Networks (JNPR) - Get Juniper Networks Inc. Report , could be in crossfire. Likewise, any semiconductor company is also at risk. Intel (INTC) - Get Intel Corporation Report has hopes to build a plant in China. That plant could now be in jeopardy.
Finally, China's ultimate weapon is boycotts, a tactic they've used effectively in the past. Unlike the U.S., where a president's call for boycotts can easily be ignored, in China, they are quite effective.
Over on Real Money, Cramer explains how Qualcomm's deal for NXP Semi went from a sure winner to disaster. Get more of his insights with a free trial subscription to Real Money.
Executive Decision: Nucor
For his "Executive Decision" segment, Cramer checked back in with John Ferriola, chairman, president and CEO of Nucor (NUE) - Get Nucor Corporation Report , the steelmaker that today posted a penny-a-share earnings beat on a 16% increase in year-over-year revenues. The company also issued strong guidance for the upcoming quarter now that new imported steel tariffs are beginning to take hold. Shares of Nucor were down 0.4% by the close.
Ferriola said that President Trump's credibility is on the line and he must honor the May 1 deadline for new tariffs to begin. Only then will America have a level playing field for steel and aluminum.
But even without tariffs, Ferriola noted that Nucor saw strong results this quarter, even though imported steel made up 25% of the market. Their plants are running at 92% of capacity to meet demand.
When asked if there will be a shortage of steel once tariffs are enacted, Ferriola quipped that there will only be shortages of dumping and illegal prices. Those who want to buy American can choose Nucor, he said, while those who want to import can still do so, only now they'll be paying fair market prices.
Finally, Ferriola noted that all of their end markets continue to be strong, with flat sheet products among the strongest.
Executive Decision: United Rentals
In his second "Executive Decision" segment, Cramer sat down with Michael Kneeland, CEO of United Rentals (URI) - Get United Rentals Inc. Report , which today posted a 41-cents-a-share earnings beat on a monster 28% rise in revenues. The company also announced a $1.25 billion share buyback. Shares fell 6.5% on the day.
Kneeland said that United Rentals saw three key things this quarter: improving rates, improving prices on the used equipment they sell and strong rental durations. All of the leading indicators are pointing to a strong year, he said, and all in the industry are saying the same thing.
So why then did the company not raise estimates, as some analysts would have liked? Kneeland explained that due to the seasonal nature of their business, they never raise estimates in the first quarter. Over the next 45 days however, they'll have a better handle on how things are shaping up for the year.
Turning to the issues of tariffs and technology, Kneeland said that United Rentals has a great relationship with their vendors and all their purchases are in for the year, so there will be no effect from tariffs. As for technology, his company is investing in telematics for many pieces of their equipment, which provides services such as geo-location, low fuel warnings and maintenance notices.
Cramer said the market got this one wrong and he's sticking with his recommendation of United Rentals.
In the Lightning Round, Cramer was bullish on T-Mobile US (TMUS) - Get T-Mobile US Inc. Report , Lennar (LEN) - Get Lennar Corporation Class A Report , Toll Brothers (TOL) - Get Toll Brothers Inc. Report , Tyson Foods (TSN) - Get Tyson Foods Inc. Report , JB Hunt Transport Services (JBHT) - Get J.B. Hunt Transport Services Inc. Report and International Paper (IP) - Get International Paper Company Report .
Cramer was bearish on Grubhub (GRUB) - Get Grubhub, Inc. Report , Sprint (S) - Get SentinelOne Inc. Class A Report , LG Homes (LGIH) - Get LGI Homes Inc. Report , Acadia Pharmaceuticals (ACAD) - Get ACADIA Pharmaceuticals Inc. Report , Pilgrim's Pride (PPC) - Get Pilgrim's Pride Corporation Report , Opko Health (OPK) - Get Opko Health Inc. Report , Alaska Air Group (ALK) - Get Alaska Air Group Inc. Report and Winnebago Industries (WGO) - Get Winnebago Industries Inc. Report .
Search Jim Cramer's "Mad Money" trading recommendations using our exclusive "Mad Money" Stock Screener.
To watch replays of Cramer's video segments, visit the Mad Money page on CNBC.
To sign up for Jim Cramer's free Booyah! newsletter with all of his latest articles and videos please click here.
At the time of publication, Cramer's Action Alerts PLUS had a position in JWN, NUE, AAPL, GOOGL, MSFT, AMZN.