Cramer's 'Mad Money' Recap: Jan. 6

Cramer said China's stimulus will have a big impact on the global economy.
Author:
Publish date:

Click here for an archive of Jim Cramer's Mad Money recaps.

"Global capitalism just might be saved by Chinese communism," Jim Cramer told viewers of his "Mad Money" TV Show Tuesdays.

He said that country's economic stimulus plans could lead the whole world out of its financial woes.

Cramer said the Chinese are pulling out all of the stops, doing everything in their power to create jobs and save their economy. The reason why, he said, is necessity.

He said the Chinese communists cannot afford the country's economy to get any worse without risking widespread protests and civil unrest. To stay in power, they have to get the economy back on track, and fast.

So far the Chinese have cut interest rates five times in efforts to stimulate growth. They've also announced over $600 billion in stimulus packages, including a $40 billion telecom package to upgrade the country's infrastructure. That plan, said Cramer, should be a win for

Qualcomm

(QCOM) - Get Report

.

Why do these moves in China matter? Cramer said because the trend is the only bullish thesis our markets can rally around.

He said this catalyst has resulted in a huge rotation out of names like

Merck

(MRK) - Get Report

and

McDonald's

(MCD) - Get Report

, and into names like

BHP Billiton

(BHP) - Get Report

,

Joy Global

(JOYG)

,

Eaton

(ETN) - Get Report

and

Freeport McMoran

(FCX) - Get Report

, a stock which he owns for his charitable trust

Action Alerts PLUS.

"The Chinese are giving us a reason to like the stocks that need a strong economy to work," said Cramer.

Cramer: Dow 30 in '09 Playbook, Part II

var config = new Array(); config<BRACKET>"videoId"</BRACKET> = 10456130; config<BRACKET>"playerTag"</BRACKET> = "TSCM Embedded Video Player"; config<BRACKET>"autoStart"</BRACKET> = false; config<BRACKET>"preloadBackColor"</BRACKET> = "#FFFFFF"; config<BRACKET>"useOverlayMenu"</BRACKET> = "false"; config<BRACKET>"width"</BRACKET> = 265; config<BRACKET>"height"</BRACKET> = 255; config<BRACKET>"playerId"</BRACKET> = 1243645856; createExperience(config, 8);

Eaton's New Look

Cramer checked in with

Eaton

(ETN) - Get Report

chairman, president and CEO, Sandy Culter, for an update on that company's outlook since his last appearance on Nov. 14, 2008.

Since then, shares have risen 27%, despite the company lowering2009 guidance last month.

Image placeholder title

Cutler confirmed that demand for Eaton's goods did decline dramatically in the fall, but said the decline was not unexpected given the global liquidity crisis. He said the damage is clearly evident in the markets and he doesn't expect manufacturing to pick up for another six to nine months.

Cutler said Eaton's strength, however, comes from the rebalancing of its businesses. Seventy percent of the company's sales are now derived from electrical, hydraulic and aerospace products, with 55% of sales coming from international sources. Likewise, the company now has an even mix between early, mid and late cycle businesses, he said.

Cutler also credited the company's aggressive cost-cutting measures for some of its success. Eaton now has a strong balance sheet, said Cutler, with $125 million in cost savings this year.

Cramer said "no more selling for Eaton," and re-recommended the stock.

Shortsighted Downgrade

Cramer recommended telco giant

Verizon

(VZ) - Get Report

as the second among his top five stocks in the

Dow Jones Industrial Average

.

Verizon shares took a 6.2% tumble after an analyst recently downgraded the company from neutral to underweight, lowering their expectations for the company by 12% and giving Verizon a target price between $27 to $32 a share.

But Cramer called the downgrade short cited and characterized the thesis behind it as flawed. He said the market is in love with the cyclical stocks and with competitor

Sprint

(S) - Get Report

imploding, Verizon is taking sizable market share.

Cramer said he's also a fan of Verizon for the Blackberry Storm, a new smartphone which sold out in just hours. Cramer said he's still a fan of Blackberry maker

Research In Motion

(RIMM)

as well.

Cramer discounted the notion that Verizon's FiOS service affords the company lower margins. FiOS, he said, is also taking sizable market share in the areas where its available and is a boon for the company.

Verizon's dividend is safe, said Cramer, and he's a fan of its 5.8% yield. Verizon is not cyclical as many people think, said Cramer, and he's a buyer.

Image placeholder title

Losing Pounds

Cramer talked with Ken Powell, chairman and CEO of

General Mills

(GIS) - Get Report

, a stock which he owns for his charitable trust

Action Alerts PLUS, to find out more about the company's business and its renewed sponsorship of the NBC program "The Biggest Loser."

Powell said that January is weight loss month at General Mills and the company recently announced its "pound-for-pound" program which donates 10 cents for every pound lost at the Website to the nation's food banks. He called "The Biggest Loser" program a terrific partner to helping the company promote a healthier lifestyle.

On the business front, Powell said General Mills just announced a great second quarter and he's happy that the company grew its margins. He said he's happy with how the business plan is unfolding at General Mills.

Cramer said he's still a fan of General Mills, and its long 110-year tradition of paying its dividend.

Lightning Round

Cramer was bullish on

Wells Fargo

(WFC) - Get Report

,

American Ecology

(ECOL) - Get Report

,

Copart

(CPRT) - Get Report

,

Hartford Financial Services

(HIG) - Get Report

and

Travelers Companies

(TRV) - Get Report

.

Cramer was bearish on

Goodyear Tire & Rubber

(GT) - Get Report

and

ISIS Pharmaceuticals

(ISIS)

.

Check out the latest edition of

"Cramer's Take onTop-Searched Stocks" on Stockpickr.

Image placeholder title

P/>Want more Cramer? Check out Jim's rules and commandments for investing by

clicking here

.

Read more of Cramer's Mad Money Lightning Round insights

.

For "Mad Money" performance statistics and other links, check out Mad Money stats

At the time of publication, Cramer was long General Mills, Freeport McMoRan.

Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for TheStreet.com, Inc., and CNBC, and a director and co-founder of TheStreet.com. All opinions expressed by Mr. Cramer on "Mad Money" are his own and do not reflect the opinions of TheStreet.com or its affiliates, or CNBC, NBC UNIVERSAL or their parent company or affiliates. Mr. Cramer's opinions are based upon information he considers to be reliable, but neither TheStreet.com, nor CNBC, nor either of their affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. Mr. Cramer's statements are based on his opinions at the time statements are made, and are subject to change without notice. No part of Mr. Cramer's compensation from CNBC or TheStreet.com is related to the specific opinions expressed by him on "Mad Money."

None of the information contained in "Mad Money" constitutes a recommendation by Mr. Cramer, TheStreet.com or CNBC that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. You must make your own independent decisions regarding any security, portfolio of securities, transaction, or investment strategy mentioned on the program. Mr. Cramer's past results are not necessarily indicative of future performance. Neither Mr. Cramer, nor TheStreet.com, nor CNBC guarantees any specific outcome or profit, and you should be aware of the real risk of loss in following any strategy or investments discussed on the program. The strategy or investments discussed may fluctuate in price or value and you may get back less than you invested. Before acting on any information contained in the program, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment adviser.

Some of the stocks mentioned by Mr. Cramer on "Mad Money" are held in Mr. Cramer's Action Alerts PLUS Portfolio. When that is the case, appropriate disclosure is made on the program and in the "Mad Money" recap available on TheStreet.com. The Action Alerts PLUS Portfolio contains all of Mr. Cramer's personal investments in publicly-traded equity securities only, and does not include any mutual fund holdings or other institutionally managed assets, private equity investments, or his holdings in TheStreet.com, Inc. Since March 2005, the Action Alerts PLUS Portfolio has been held by a Trust, the realized profits from which have been pledged to charity. Mr. Cramer retains full investment discretion with respect to all securities contained in the Trust. Mr. Cramer is subject to certain trading restrictions, and must hold all securities in the Action Alerts PLUS Portfolio for at least one month, and is not permitted to buy or sell any security he has spoken about on television or on his radio program for five days following the broadcast.