Backing the Bulls: Cramer's 'Mad Money' Recap (Tuesday 1/19/21)

Jim Cramer says the factors pushing the stock market change every day, and investors need to understand the news to manage the volatility.
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Trading stocks isn't like placing a bet at the casino, Jim Cramer told his Mad Money viewers Tuesday. Investors aren't simply putting money on whether their favorite stocks will go up or down for the day, he explained. If you listen to which way the market winds are blowing, you can have a pretty good idea what the close might look like.

Cramer said that today, the market's focus was on Janet Yellen's comments at her confirmation hearing. But anyone who follows Yellen should already know that she favors low interest rates and generous government support. Yellen is focused on boosting employment and helping those disenfranchised by the pandemic, Cramer said, and that's great news for stocks.

Investors could also tell which way the market was likely to move by looking at the market leaders, like the FAANG stocks (Cramer's acronym for Facebook  (FB) - Get Report, Apple  (AAPL) - Get Report, Amazon  (AMZN) - Get Report Netflix  (NFLX) - Get Report and Alphabet  (GOOGL) - Get Report). Apple will certainly be a winner if tensions with China de-escalate under a new administration, Cramer said. Netflix hit it out of the park Tuesday with strong earnings that sent shares soaring 12.3%. Add to that, continued strong demand for semiconductors and that's the making of a market rally.

If you're new to trading, "don't ever go home long," Cramer cautioned, as every day is a new game and the markets continue to be in a volatile position.

Off the Charts

In the "Off The Charts" segment, Cramer checked in with colleague Carley Garner over the direction of the bond market, which often influences the direction of stocks. Bonds have been mostly out of the picture after years of historically low interest rates, but Cramer explained that hasn't stopped foreign investors from piling into U.S. treasuries because bond yields overseas are even lower than ours.

Garner first looked at the chart comparing the U.S. Dollar Index and the 10-year Treasury note. She said that after plunging all year along with the pandemic, bonds are now stabilizing and in fact have the lowest relative strength index, or RSI, in decades. That indicated to Garner that there may be no one left to sell.

Garner's theory was bolstered by a seasonal pattern of bonds, which noted that historically, the first quarter favors bonds.

Finally, Garner looked at a monthly chart of U.S. Treasury futures and noted expanding Bollinger bands, which told her that a short-term speed bump may be next in the cards, followed by a reversal.

Putting it all together, Cramer explained that long-term Treasury yields might finally be done going higher and might, in fact, collapse. That means it is a great time to invest in secular growth stocks, like FAANG, which don't need a strong economy to continue rallying.

Cramer and the AAP team are looking at everything from earnings and tariffs to the Federal Reserve. 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.

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Your 'Go List'

What should investors be buying now that vaccines are starting to be administered worldwide and our economy will soon be reopening? Back in August, Cramer provided a "Go List" of stocks he said would be at the heart of the recovery. Since then, these 11 stocks have rallied 36%, almost triple that of the Dow Jones Industrial Average.

Cramer noted that the only two laggards on his Go List were 3M  (MMM) - Get Report and Mastercard  (MA) - Get Report. He wouldn't be a buyer of either today. His industrial picks of Emerson Electric  (EMR) - Get Report, Union Pacific  (UNP) - Get Report and Nucor  (NUE) - Get Report were only up slightly, but Cramer remained bullish.

In the middle of the pack were PPG Industries  (PPG) - Get Report, Walt Disney Co.  (DIS) - Get Report and Nike  (NKE) - Get Report. Cramer said he'd still buy all three of these names, even with Disney up 35% since his recommendation and Nike up 38%.

Among the best performers in the Go List were DuPont  (DD) - Get Report, an Action Alerts PLUS holding that's rallied 50% since August. DuPont was followed by two apparel names, Ralph Lauren  (RL) - Get Report, up 60%, and PVH  (PVH) - Get Report, which soared over 90%. Cramer said he's still a fan of these three winners as well.

Executive Decision: Logitech International

In his first "Executive Decision" segment, Cramer spoke with Bracken Darrell, president and CEO of Logitech International  (LOGI) - Get Report, the computer peripherals maker which just posted sales up a staggering 85%. Shares responded by falling 3.1% as investors assumed that Logitech's sales will begin to cool as the world returns to normal.

Darrell said as the world returns to work, many employees will return to a hybrid model where they spend some days at the office and other days at home. That means multiple workspaces that need audio, video and accessories, Darrell said, all of which are good for Logitech.

Darrell added that Logitech continues to focus on innovation and creators. He touted his company's new Ultimate Ear EarPods, which mold themselves to your ear for a perfect fit every time. He said it's all about finding ways to make new technologies relevant to their customers.

Logitech is also advancing their sustainability efforts by putting the carbon impact of all their products right on the box. Darrell said the move, which is just like calories printed on food labels, will encourage other manufacturers to do the same with their products.

On Real Money, Cramer keys in on the companies and CEOs he knows best. Get more of his insights with a free trial subscription to Real Money.

Following the Money

In his No-Huddle Offense segment, Cramer said the important part of researching a stock isn't reading the Internet, it is listening to company conference calls, which can tell you everything you need to know about a company and our economy.

Cramer said he learned three things from listening to JP Morgan Chase  (JPM) - Get Report, Bank of America  (BAC) - Get Report and Goldman Sachs  (GS) - Get Report this quarter. First, Americans continue to pay down their debts as they spend less at home and take advantage of stimulus checks. Second, he said the major banks continue cutting costs by investing heavily in technology to replace physical branches and call centers. As a result, the banks have more money to return to shareholders, when the government will let them.

Lightning Round

Here's what Cramer had to say about some of the stocks that callers offered up during the Mad Money Lightning Round Tuesday evening:

fuboTV  (FUBO) - Get Report: "Fubo versus Penn National Gaming  (PENN) - Get Report or DraftKings  (DKNG) - Get Report, I'll go with the other two."

Nano Dimension  (NNDM) - Get Report: "I want to be careful. I don't want to be too aggressive."

Canopy Growth  (CGC) - Get Report: "I've got a feeling that Canopy is the way to play this group. "

CIIG Merger  (CIIC) : "I've looked at this one and I like it a lot."

Churchill Capital  (CCX) - Get Report: "I have to say I like it, although it's speculative."

Quanta Services  (PWR) - Get Report: "I've been urging people to take some profits."

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At the time of publication, Cramer's Action Alerts PLUS had a position in DD, AAPL, FB, AMZN, GOOGL, DIS, JPM, GS, MA.