Healthcare stocks have wandered in the desert long enough, Jim Cramer told his Mad Money viewers Thursday. We saw a resurgence in this left-for-dead sector Thursday, as investors finally realized how much value had been created in the past few months.
All year long, we've seen investors swapping out of the stay-at-home stocks in favor of the great reopening stocks. Until now, that meant swapping into one thing -- the cyclicals. But today, that trade ended and investors took a pause on the cyclicals to give some love to technology and healthcare.
These are strange times, Cramer told viewers. The Dow Jones Industrial Average only hits new highs when the economy is booming. And when the economy is strong, so too are interest rates. But on Thursday, we saw interest rates fall, which make technology and healthcare also attractive.
The move in healthcare was pronounced, with UnitedHealth Group (UNH) - Get Report soaring 3.8%, GlaxoSmithKline (GSK) - Get Report up 4.3% and Eli Lilly (LLY) - Get Report gaining 1.6%. Even Johnson & Johnson (JNJ) - Get Report was able to eke out gains. The rise in healthcare was met with a similar move in tech, where Cramer favorites Twilio (TWLO) - Get Report and Okta (OKTA) - Get Report rallied 4.8% and 5.5% respectively.
Cramer said with inflation retreating, now's the time to grab one of these great healthcare and tech names before they all take off to the upside.
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Bank Earnings Off to a Good Start
This quarter's earnings season got off to a great start, with strong earnings from the likes of Goldman Sachs (GS) - Get Report, JPMorgan Chase (JPM) - Get Report and Wells Fargo (WFC) - Get Report. Cramer gave viewers his take on this red-hot sector.
Cramer said he was initially worried that these stocks had gotten ahead of themselves, but Goldman Sachs proved him wrong with record revenues and a 44% rise in revenues. He called the company's earnings of $18.60 a share "staggering."
JPMorgan had the second best quarter of the group, with a 14% gain in revenues. Cramer said this stock is a screaming buy and he wouldn't wait to start a position.
Then there's Well Fargo, which jumped 5% on a 35-cents-a-share earnings beat with a 2% uptick in sales. Cramer said no one was expecting perfection from Wells, just progress, and that's exactly what they delivered.
Today we got earnings from Bank of America (BAC) - Get Report and Citigroup (C) - Get Report, both of which saw shares fall on the news. Cramer said the market is wrong on Bank of America, which delivered a top- and bottom- line beat. He told viewers he also wouldn't sell Citigroup.
The State of Rapid Testing
Cramer welcomed Dr. Michael Mina back to the show to discuss the current state of rapid COVID testing in America. Dr. Mina is the assistant professor of epidemiology at the Harvard School of Public Health.
Mina said there are a number of ways to combat COVID, not just vaccines and it's not too late to roll out mass testing. Frequent, at-home COVID resting is being used around the globe, but it still has been slow to roll out in the U.S., despite our high infection rates.
Mina noted that the FDA has approved two at-home tests, one from Abbott Labs (ABT) - Get Report and the other from Quidel (QDEL) - Get Report. Both of these tests are simple to use and provide results in just a few minutes. Mina said employees can simply test themselves in the morning and if they're positive, stay home and stop the virus in its tracks.
When asked why these tests still aren't readily available, Mina said all it will take is the government to subsidize the cost so the tests can be made easy to obtain.
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Executive Decision: American Eagle Outfitters
In the "Executive Decision" segment, Cramer spoke with Jay Schottenstein, chairman and CEO of teen-apparel chain American Eagle Outfitters (AEO) - Get Report, which pre-announced strong earnings that sent shares soaring 4%.
Schottenstein said American Eagle's stores are open and safe to shop at. Strong same store sales, even at 50% capacity due to COVID, has helped propel their stock to new 52-week highs.
When asked about being in the mall, Schottenstein said the mall is not dead and they're very excited about their denim business, where they are the No. 1 brand for denim among 15- to 25-year olds.
Schottenstein was also bullish on their Aerie brand, which has been red hot. He said Aerie has been at the forefront of the body positivity movement and customers love it.
They Look Bigger Than They Are
In his "No Huddle Offense" segment, Cramer cautioned that it's a big mistake to worry over the prices of cryptocurrencies, NFTs and meme stocks. They're far too small and too concentrated to have any real impact on anything. What really matters, he said, is the real economy.
In the real economy, unemployment is still double what it was before the pandemic began and only 25% of all Americans have been vaccinated. That's what really matters.
So while it might be fun to speculate on bitcoin and NFTs get all of the headlines. Remember what's important.
Here's what Cramer had to say about some of the stocks that callers offered up during the "Mad Money Lightning Round" Thursday evening:
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At the time of publication, Cramer's Action Alerts PLUS had a position in LLY, WFC.