China Deal Winners: Cramer's 'Mad Money' Recap (Thursday 12/12/19)

Jim Cramer looks at which stocks will win big from a solid trade deal with China, and which won't.
Author:
Updated:
Original:

We've seen this movie before, Jim Cramer told his Mad Money viewers Thursday. We get positive news on trade talks and the market soars. That means there are plenty of short-term trades to be made. But next week, Cramer said, we could be back to picking stocks that have nothing to do with China.

Read the latest: U.S. Stock Futures Rise on Reports Trump Has Agreed to Preliminary Trade Deal With China

In the meantime, however, Cramer said the opening of Chinese markets would be great news for the financials. Goldman Sachs  (GS) - Get Report and American Express  were his favorite trades, but JPMorgan Chase  (JPM) - Get Report, Visa  (V) - Get Report and MasterCard  (MA) - Get Report are also winners. 

A rollback of tariffs would also be welcome news for tech, Cramer said. He recommended Apple  (AAPL) - Get Report, along with any of the chipmakers and 5G wireless names like Nvidia  (NVDA) - Get Report, Marvell Technologies  (MRVL) - Get Report, Broadcom  (AVGO) - Get Report and Skyworks Solutions  (SWKS) - Get Report

Cramer was cautious about the industrials, saying that even with positive trade news, the estimates are still too high for Caterpillar  (CAT) - Get Report and Honeywell  (HON) - Get Report. Investors may want to consider energy for a trade, with Schlumberger  (SLB) - Get Report and Chevron  (CVX) - Get Report making Cramer's list. He also liked toymaker Mattel  (MAT) - Get Report and retailers like Dollar Tree  (DLTR) - Get Report

Finally, Cramer said that not all China stocks are created equal. Starbucks  (SBUX) - Get Report is an investment, while Las Vegas Sands  (LVS) - Get Report is a trade. FedEx  (FDX) - Get Report, he said, is a trade, but Union Pacific  (UNP) - Get Report remains an investment.

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.

Deal or No Deal?

What should investors make of today's trade news? Cramer said he still remains skeptical that the Chinese will honor their promises. He recalled how his father's gift-wrap business was decimated by Chinese imports, as America happily traded American jobs for cheaper, and in most cases, inferior, products. 

The free traders will argue that tariffs will destroy the American economy, costing $1,000 a year for most American households. But Cramer said this notion is a fantasy. Retailers are very adept at mitigating rising costs. Even if it were true, most Americans would likely be happy to pay a little more to keep those jobs and towns in America thriving. 

If we're going to trade jobs for cheap stuff, we should at least get a good exchange rate, Cramer concluded. 

You know Cramer's a passionate Eagles fan, right? Don't miss his amazing Bull Market Fantasy, with live shows Tuesday and Thursday a 10:45 a.m. E. It's free and it's fun.

Executive Decision: Adobe 

For his "Executive Decision" segment, Cramer spoke with Shantanu Narayen, chairman, president and CEO of Adobe Systems  (ADBE) - Get Report, a stock that's trading at new highs thanks in part to 24% revenue growth this past quarter. 

Narayen said that a company would be lucky to have just one fast-growing business, but Adobe has three, including creativity, documents and digital media. The latter, in particular, is seeing record average recurring revenue growth because so many new devices and services are emerging. 

Narayen said Adobe is helping the next generation of students to move beyond just STEM and into STEAM, because a world without arts would be a boring place. Whether you're posting to social media or YouTube or an application, everyone needs tools to help express themselves, he said. 

One of Adobe's next generation tools is Fresco, which rethinks drawing apps for the age of tablets and smart styluses. 

Cramer said Adobe continues to be buy. 

Executive Decision: New Relic

For his final "Executive Decision" segment, Cramer sat down with Lew Cirne, CEO of New Relic  (NEWR) - Get Report, the cloud application monitoring company that's well off its 2019 highs. 

Cirne said that now is crunch time for digital companies, with ecommerce and open enrollment usage at record highs. Companies cannot afford any hiccups or downtime and New Relic helps them monitor all of their mission-critical systems to keep them running smoothly. 

Cirne explained that New Relic has spent the past two years preparing to transition away from being just a digital dashboard and into a unified digital platform that allows customers to see all of their operations in one place, including applications, machine data and ecommerce transactions. That digital platform is now live and customers have great things to say, he added, and New Relic now has everything in place to become a $1 billion company. 

New Relic currently has more than 80 customers paying over $1 million a year, he said.

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.

Off the Tape: Robinhood

In his "Off The Tape" segment, Cramer again spoke with Vlad Tenev, cofounder and co-CEO of the privately-held Robinhood Markets, the commission-free online trading platform. 

Tenev said that Robinhood's mission is to remove the barriers to investing and today they are announcing the ability to buy fractional shares of stock. That means investors no longer need to wait to buy a $300 stock, they can instead buy a fractional share for as little as $1 to get started. Robinhood also announced that coming in early 2020, they will be rolling our recurring investments and DRIP plans for dividend reinvesting. 

Tenev added that Robinhood's technology, like its in-house clearing platform, is what makes features like this announced today possible. He said every time they make trading easier, more people get in involved and can benefit from investing.

Lightning Round

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

Occidental Petroleum  (OXY) - Get Report: "I think that dividend may not be sustainable. I'm not going to bless that trade." 

Ring Central  (RNG) - Get Report: "That's the gold standard but it is highly valued so only buy it on the dips."

Alteryx  (AYX) - Get Report: "This stock is up 55% so let's let it come in."

Canada Goose  (GOOS) - Get Report: "November was too warm so you don't want to buy extra warm coats."

Introducing TheStreet Courses: Financial titans Jim Cramer and Robert Powell are bringing their market savvy and investing strategies to you. Learn how to create tax-efficient income, avoid top mistakes, reduce risk and more. With our courses, you will have the tools and knowledge needed to achieve your financial goals. Learn more about TheStreet Courses on investing and personal finance here.

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 GS, JPM, MA, AAPL, NVDA, MRVL, HON, SLB, SBUX.