The Federal Reserve may no longer be our friend, but that doesn't mean we can't still do some buying, Jim Cramer told his Mad Money viewers Wednesday. Some stocks actually do well with higher interest rates. Other stocks have special situations that make them attractive. And even those high-flying tech stocks have fallen far enough that it's worth picking amongst the rubble.
Cramer recommended investors look at companies that make tangible things, with real earnings and stock buybacks. Stocks like Nucor (NUE) - Get Free Report are attractive, although after today's 4.8%, the prudent move would be to take some profits and buy back at lower levels.
Despite the weight of Omicron and possibly weaker earnings, the Action Alerts PLUS team says things are looking better in light of solid gains in year-over-year semiconductor sales -- meaning a brighter outlook for stocks like Ford Motor (F) - Get Free Report, Apple (AAPL) - Get Free Report and Marvell (MRVL) - Get Free Report. Get more trading strategies and investing ideas with Action Alerts PLUS.
As for those high-growth tech names, Cramer said Salesforce.com (CRM) - Get Free Report has always been an expensive stock, but it's still made you a lot of money. So too have names like Palo Alto Networks (PANW) - Get Free Report and Nvidia (NVDA) - Get Free Report. Both of these stocks are now well off their highs, and that makes them attractive.
Smart investors buy low and sell into strength, Cramer reminded viewers, and with so many stocks selling off, the time to start buying will soon be upon us.
Continuing with his week-long year in review, Cramer took a look at last year's biggest winners in the Dow Jones Industrial Average to see which ones are still relevant in 2022.
Topping the list was Home Depot (HD) - Get Free Report, up 56%, followed by Microsoft (MSFT) - Get Free Report at 51% and Goldman Sachs (GS) - Get Free Report rising 45%. Cramer was bullish on both Home Depot and Microsoft, but said he prefers Morgan Stanley (MS) - Get Free Report over Goldman.
The stock most likely to repeat its stellar 2021 performance was UnitedHealth Group (UNH) - Get Free Report, which saw 43% gains last year and is the perfect defensive stock for rising interest rates.
Other stocks that Cramer recommended were Apple and Cisco Systems (CSCO) - Get Free Report. He advised avoiding Walgreen Boots Alliance (WBA) - Get Free Report and sticking with CVS Health (CVS) - Get Free Report instead. And finally, Cramer said he still loves McDonald's (MCD) - Get Free Report, which came in 10th on the list, but he added that Chipotle Mexican Grill (CMG) - Get Free Report remains his favorite.
Dogs of the Dow
No list of Dow winners would be complete without also looking into the "Dogs of the Dow" to see if any of the biggest losers are worth redeeming. Sadly, Cramer found little to like.
The biggest decliner in the Dow was Walt Disney (DIS) - Get Free Report, off 15% for the year. While Cramer loved the company, the stock has no momentum whatsoever. Next was Boeing (BA) - Get Free Report, a company that can't seem to get out of its own way, with plane after plane seeing problems and delays.
Cramer remained a believer in Honeywell (HON) - Get Free Report, but turned bearish on Walmart (WMT) - Get Free Report, saying there are more consistent retailers out there. He was bearish on Amgen (AMGN) - Get Free Report, which fell 2% last year, saying this company has the same market cap as it did seven years ago.
Off the Charts
In the "Off The Charts" segment, Cramer checked in with colleague Larry Williams to hear his view on inflation and what it means for the stock market.
According to Williams, investors are too worried about inflation. His chart mapping inflation expectations already indicates that sentiment on inflation has turned negative. The combination of minor rate hikes plus the removal of Covid bottlenecks in the supply chain should be all it takes to quickly cool inflation.
Williams confirmed his contrarian thesis with his forecast for the consumer price index, or CPI. According to his analysis, the CPI has already peaked and will soon begin to decline.
Williams added that stocks will likely get a boost once investors see that the Fed won't need to be super aggressive to get things under control.
We Blew it on Covid
In his "No Huddle Offense" segment, Cramer proclaimed "we blew it" when it comes to finally getting a handle on Covid. Our timid government doesn't seem to have the political will to fight, which is why America has the lowest vaccination rates in the developed world.
Our government favored vaccines over antiviral treatments, but then failed to mandate people get them. Now they advise testing, but don't have enough tests to get the job done. Even the CDC seems to have thrown in the towel, advising just a five-day isolation period for infectious people, despite the fact that days six and seven are also highly transmissible.
In the Lightning Round, Cramer was bullish on Illumina (ILMN) - Get Free Report, Atai Life Sciences (ATAI) - Get Free Report, NortonLifeLock (NLOK) - Get Free Report, Doximity (DOCS) - Get Free Report, Enterprise Products Partners (EPD) - Get Free Report, CNH Industrial (CNHI) - Get Free Report, AGCO (AGCO) - Get Free Report and Deere & Co. (DE) - Get Free Report.
To sign up for TheStreet's free Daily Booyah! newsletter with all of the latest articles and videos please click here.