Monday's stock market rally was fueled by the approval of Pfizer's (PFE) - Get Pfizer Inc. Report COVID vaccine, even though that FDA approval was expected by pretty much everyone, Jim Cramer told his Mad Money viewers. The market is so hungry for good news, Cramer said, and that even the most obvious of news can send stocks higher.
But there's a lot more to Monday's rally than just a 2.4% gain in shares of Pfizer. More vaccines means less COVID, and less COVID means more travel and leisure, which is great news for a host of sectors. As people go out more, they'll want more products from Estee Lauder (EL) - Get Estee Lauder Companies Inc. Class A Report, for example, and they'll be eating out more at Chipotle Mexican Grill (CMG) - Get Chipotle Mexican Grill, Inc. Report.
From the obvious (Pfizer) to cross-border plays, to oil and even FAANG and what's happening in China, Cramer spells out what's happening in this market, why, and how investors can make the most of the opportunities. Read more of his stock ideas, insights and trading strategies on Real Money.
As travel picks up, that's good news for the airlines and cruise lines. Cramer recommended keeping it simple with Southwest Airlines (LUV) - Get Southwest Airlines Co. Report, which rose 2.8% today. He was also bullish on both Mastercard (MA) - Get Mastercard Inc. (MA) Report and Visa (V) - Get Visa Inc. Class A Report.
Beyond travel, investors can consider the cyclicals like Boeing (BA) - Get Boeing Company Report, Honeywell (HON) - Get Honeywell International Inc. (HON) Report, Caterpillar (CAT) - Get Caterpillar Inc. Report and Eaton (ETN) - Get Eaton Corp. Plc Report.
Finally, Cramer said investors can circle back to tech with FAANG, especially Amazon (AMZN) - Get Amazon.com, Inc. Report, all of which have been gaining steam after lagging the averages earlier in the year. FAANG is Cramer's acronym for Facebook (FB) - Get Facebook, Inc. Class A Report, Amazon, Apple (AAPL) - Get Apple Inc. (AAPL) Report, Netflix (NFLX) - Get Netflix, Inc. (NFLX) Report, and Alphabet (GOOGL) - Get Alphabet Inc. Class A Report.
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Executive Decision: Lyft
In his first "Executive Decision" segment, Cramer spoke with John Zimmer, president and vice chair of Lyft (LYFT) - Get Lyft Inc Class A Report, the ride-sharing platform shares of which rose 2.9% with the broader averages.
Zimmer said that Lyft had a strong quarter with solid fundamentals and he's as confident as ever about the business looking forward. He said demand is strong and is coming back as more people get vaccinated and travel returns. Lyft remains focused on consumer transportation, he added, which gives it an advantage over the competition.
Zimmer also commented on the recent court decision regarding Prop. 22 in California, which could force Lyft and others to treat their contractors as employees. He remained confident that Prop. 22 will be ultimately upheld. The appeals process should provide a final ruling in the next six months. Zimmer noted that the vast majority of Lyft drivers use the platform for supplemental income and work less than 20 hours per week. Only 2% of Lyft drivers rise to full-time employment thresholds of over 40 hours per week.
Finally, when asked about the state of the consumer, Zimmer confirmed that travel is picking up and Lyft is seeing more trips to and from airports, which is a promising sign.
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Breakups can Unlock Value
Breakups are a great way for companies to unlock a lot of value, Cramer reminded viewers. That's certainly been the case with XPO Logistics (XPO) - Get XPO Logistics, Inc. Report, which recently spun off GXO Logistics (GXO) - Get GXO Logistics Inc. Report, and with the former L Brands, which split itself into Victoria's Secret (VSCO) - Get VICTORIA'S SECRET & COMPANY Report and Bath & Body Works (BBWI) - Get BATH & BODY WORKS, INC. Report.
Cramer's long been a fan of XPO Logistics, which has risen more than 400% since 2014. He said the split of its transportation unit, XPO, and its warehousing operations, GXO, has made the company simpler to follow and has unlocked a ton of value. Shares of GXO are up 73% since the spinoff in early August. Cramer said he remains a buyer of both companies.
Cramer said that Victoria's Secret is a mall-based turnaround story with easy comparisons going forward. The stock is also cheap at just nine times earnings. He said the company doesn't need to hit it out of the park, it only needs to show modest improvements going forward. As for Bath & Body Works, this half of the company has difficult comparisons to last year, but it remains a high-quality retailer for the long term. Shares of Bath & Body trade for 15 times earnings and are worth every penny.
Executive Decision: Palo Alto Networks
For his second "Executive Decision" segment, Cramer spoke with Nikesh Arora, chairman and CEO of Palo Alto Networks (PANW) - Get Palo Alto Networks, Inc. Report, the No. 1 provider of cybersecurity software.
Arora said that Palo Alto has spent three years preparing for what they felt would be the future. That future included the cloud, artificial intelligence and a more security-aware corporate environment. Fortunately, all three of those things have come to be in a big way, which is how Palo Alto has been able to remain a leader in the space.
How does Palo Alto stay one step ahead of the cyber criminals? Arora said it's all about staying nimble, finding solutions quickly and deploying them even quicker. You'll never get it right all of the time, he said, but Palo Alto is perfecting the process every year.
When asked how the company is able to retain so many of their customers, Arora noted that Palo Alto is now consistently rated the best vendor in six different categories and "no one gets fired for buying the best."
Take Note, 'Inflationistas'
In his "No Huddle Offense" segment, Cramer had a note to the "inflationistias" who proclaim our economy is doomed due to hyperinflation. Here's what these bears are missing.
First, commodity prices are already breaking down. It started with lumber, but now includes copper, oil, iron ore and soon natural gas and plastics. Second, increased productivity due to digitization lowers many costs by allowing companies to do more with less.
Third, Cramer noted that the delta variant has delayed the return to the office, it hasn't eliminated it. That means eventually, office rents, auto and home prices will retreat.
Finally, Cramer said that once COVID is contained and the government benefits end, more people will return to the workforce, putting downward pressure on wages.
So the next time a pundit on the news proclaims inflation will kill us all, remember that inflation is already retreating and it's only going to retreat further as the pandemic winds down.
Here's what Cramer had to say about some of the stocks that callers offered up during the "Mad Money Lightning Round" Monday evening:
Futu Holdings (FUTU) : "The Chinese stocks are going to rally and when they do you need to sell."
Amyris (AMRS) - Get Amyris, Inc. Report: "That looks like a junior International Flavors and Fragrances (IFF) - Get International Flavors & Fragrances Inc. (IFF) Report so why not buy IFF?"
Ammo POWW: "There are too many hunting plays. How many guns and ammo stocks can you buy?"
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At the time of publication, Cramer's Action Alerts PLUS had a position in EL, MA, BA, HON, AMZN, AAPL, FB, GOOGL.