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Cramer's Mad Money Recap: Walmart, Amazon, Apple

As COVID re-emerges, Jim Cramer says it's time to look at companies that flourish in an economy that might get worse before it gets better.

As the COVID Delta variant continues to keep America on the run, Jim Cramer told his Mad Money viewers Tuesday it's time to dust off the Spring 2020 playbook and start investing in the pseudo-lockdown stocks. What's a pseudo-lockdown stock? It's the type of company that flourishes in a "worse before it gets better" economy.

In retail, that means investing in WATCH, Cramer's acronym for Walmart  (WMT) - Get Walmart Inc. Report, Amazon  (AMZN) - Get, Inc. Report, Target  (TGT) - Get Target Corporation Report, Costco  (COST) - Get Costco Wholesale Corporation Report and Home Depot  (HD) - Get Home Depot, Inc. (HD) Report. All of these retailers have navigated the pandemic with flying colors and are the ones consumers trust most. 

Cramer says these companies never get stuck in a rut. They are growing, innovating and, when necessary, buying. He thinks that's a smart thing for investors to do, too. Read more on Real Money about Cramer's investment ideas for PepsiCo, Kraft Heinz, McCormick and others.

Investors should also be looking at UPS  (UPS) - Get United Parcel Service, Inc. Class B Report and FedEx  (FDX) - Get FedEx Corporation Report, with the latter being Cramer's favorite of the pair.

When it comes to clothing and apparel, Lululemon Athletica  (LULU) - Get Lululemon Athletica Inc (LULU) Report, Ralph Lauren  (RL) - Get Ralph Lauren Corporation Class A Report and Nike  (NKE) - Get NIKE, Inc. (NKE) Report were among Cramer's favorites. Shares of Ralph Lauren rose 6.1% by the close Tuesday.

Other standouts included Domino's Pizza  (DPZ) - Get Domino's Pizza, Inc. Report, which just reported another blowout quarter, along with Apple  (AAPL) - Get Apple Inc. (AAPL) Report, an Action Alerts PLUS holding, and the newly-minted Robinhood  (HOOD) - Get Robinhood Report, which saw a bounce after its weaker-than-expected IPO.

Cramer and the AAP team are looking at everything from earnings and politics 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.

Executive Decision: Clorox

In the "Executive Decision" segment, Cramer welcomed back Linda Rendle, CEO of Clorox Co.  (CLX) - Get Clorox Company Report, the consumer products maker which plunged 9.4% after the company reported a massive top- and bottom-line miss amid rising costs and wavering demand as our economy struggles to contain the Delta variant.

Rendle said after record quarters last year, Clorox expected to see sales moderate. Looking at the year however, all four of the company's segments posted double-digit sales growth and even with recent declines are still significantly above pre-pandemic levels.

Clorox is emerging from the pandemic stronger than when it went in, Rendle added. The company has invested heavily into digital channels and has learned a lot about the new behaviors and desires of consumers. Clorox also remains committed to its dividend and to shareholders, Rendle added, even during these volatile times.

Cramer said the next quarter will be a pivotal one for Clorox, one where we will learn what post-pandemic sales will truly look like.

The IPO Issue

There are a lot of things to worry about in the market, but what worries Cramer most isn't the Delta variant, or China, or the looming debt ceiling crisis. What worries him most are IPOs.

When new shares hit the stock market, it puts pressure on everything. So far this year we've seen 304 IPOs totaling $105 billion. That puts 2021 on par for a record year... with five months still to go. And these IPO numbers don't even take into account over 300 deals that came public via SPAC.

IPO fatigue is rapidly approaching, Cramer warned, with some deals already being canceled or delayed. The high point was Didi Global  (DIDI) - Get DiDi Global Inc. Report, which found itself banned from Chinese app stores just a day after the company went public here in the U.S.

IPOs have always been tilted in favor of investors, Cramer explained, and are designed to always see a first-day surge. But lately, your first day of trading is a coin toss, Cramer said, and the days that follow are anyone's guess. Even the much-hyped Robinhood  (HOOD) - Get Robinhood Report couldn't break free of the downward IPO spiral. 

Fortunately, the deal flow appears to be finally slowing down a bit, Cramer concluded, and not a moment too soon.

Off the Charts

In his "Off The Charts" segment, Cramer checked in with colleague Tom DeMark for another take on where the markets are likely to head next. According to DeMark, things are not looking good.

DeMark first looked at a daily chart of the S&P 500, noting that this rally is rapidly running out of steam after making 12 new highs. According to DeMark's 13-day sell countdown, if the S&P closes above 4,430 Wednesday, the rally is over.

TheStreet Recommends

The same pattern can be seen in the Nasdaq 100 index, which is also on day 12 of the 13-day cycle. If both indices make another high tomorrow, completing the cycle, things could get very ugly.

Even the Dow Jones Industrial Average isn't immune, with DeMark picking up a widening fan pattern of higher highs and lower lows that is eerily similar to that seen ahead of the crash in 1929.

For those who think cryptocurrency might be immune, think again. DeMark also didn't like the chart of Bitcoin, noting that the recent bottom wasn't accompanied by any significant bad news to confirm the move.

Great Companies Shake Things Up

In his No-Huddle Offense segment, Cramer said that while good companies are typically risk averse and rarely change, great companies aren't afraid to shake things up. Case in point, today's news that PepsiCo   (PEP) - Get PepsiCo, Inc. Report is spinning off Tropicana and Naked Beverages for $3.3 billion.

Tropicana, while still an iconic brand, is beginning to fall out of favor with younger consumers who prefer drinks with less sugar. Cramer said spinning off these brands are what PepsiCo does, cutting loose slowing brands to double-down on its fastest-growing brands. That's how you grow earnings.

Other great companies, according to Cramer, include McCormick  (MKC) - Get McCormick & Company, Incorporated (MKC) Report, Hormel  (HRL) - Get Hormel Foods Corporation (HRL) Report and Constellation Brands  (STZ) - Get Constellation Brands, Inc. Class A Report, all of which are constantly reshuffling their product portfolio, often making difficult decisions to reinvigorate growth.

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 Tuesday evening:

MKS Instruments  (MKSI) - Get MKS Instruments, Inc. Report: "I don't understand why this stock is so cheap."

Aurinia Pharmaceuticals  (AUPH) - Get Aurinia Pharmaceuticals Inc. Report: "They should be doing better. I want to be careful with that stock."

Sorrento Therapeutics  (SRNE) - Get Sorrento Therapeutics, Inc. Report: "I think this stock is overvalued and I don't like the way they have handled themselves."

Palantir Technologies  (PLTR) - Get Palantir Technologies Report: "This is a cult stock. No one knows what they do but people still like it."

Gritstone Oncology  (GRTS) - Get Gritstone Oncology, Inc. Report: "You want to own NovoCure  (NVCR) - Get Novocure Ltd. Report. That's the way to go. Not this one."

SoFi Technologies  (SOFI) - Get SOFI TECHNOLOGIES INC Report: "I think they are doing a terrific job and you should buy the stock."

Spirit AeroSystems  (SPR) - Get Spirit AeroSystems Holdings, Inc. Class A Report: "I'd rather own Boeing. That's the one to buy, not the suppliers."

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At the time of publication, Cramer's Action Alerts PLUS had a position in AAPL, AMZN, COST.