Monday's selloff was all about the end of euphoria, Jim Cramer told his Mad Money viewers. Too much speculation, too little stability and a raging COVID variant all contributed to the most speculative parts of the market getting hit the hardest.
Cramer had a long list of factors that continue to weigh on stocks, not the least of which was the continued flood of new IPOs and SPACs that require money managers to sell old stocks in order to make room for new ones. There are no less than 19 deals slated for this week alone, and with 638 so far this year, 19 more is the last thing we need.
Another factor sending stocks lower is the stream of "meme-a-day" stocks that are pumping up small-cap names, only to send them sharply lower the following day. Even cryptocurrency is shaky as speculators realize that Bitcoin can fall just as fast as it rises.
Other items on the decline include oil prices, where increased OPEC supply aims to put a cap on future gains. Investors are also shunning stocks with high price-to-sales ratios, preferring those with actual earnings instead.
These declines won't stop until all of the speculators get blown out, Cramer concluded. Unfortunately, there's a lot of speculation that still remains.
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Executive Decision: The Original Bark Company
In his "Executive Decision" segment, Cramer spoke with Matt Meeker, co-founder and executive chairman of The Original Bark Company BARK, as well as Manish Joneja, the company's CEO.
Meeker said he founded the Bark Company because his own large dog was underserved in New York City, which caters to smaller dogs. That experience made him realize that every dog is unique and deserves to be treated individually. Joneja added that the Bark Company uses the data they know about you and your pet and, with the assistance of artificial intelligence, customizes and adapts their recommendations to your pet's needs.
When asked about their presence in retail stores, Joneja said that subscriptions will always be at the core of their business, but at the retail level, they can also provide value to pet owners who may not have experienced their full offerings, including fun, food, home and health items.
Despite Monday's selloff, shares of The Original Bark Company closed up 4.4%.
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Executive Decision: First Horizon National
For his second "Executive Decision" segment, Cramer also spoke with Bryan Jordan, president and CEO of First Horizon National (FHN) , the regional bank that saw its shares dip 3.5% on the day amidst the overall market weakness.
Jordan explained that there are two forces working against the banks at the moment. The first is low interest rates, and the second is an absence of loan growth. He said the industry is essentially "moving sideways" at the moment, as strengthening loan growth is being offset by increased liquidity, which is allowing companies to pay off their loans quicker.
Lower interest rates aren't all bad however, as Jordan noted that with the recent downtick in interest rates, home refinance activity has once again picked up throughout the company's territory. COVID-related relocations are also helping to drive new business, as areas like Tennessee have become popular with those looking to leave big cities.
Finally, Jordan talked about the recent merger with Iberia Bank, noting that the company has already seen $20 million in revenue synergies and will continue to see even more over the next six to eight quarters.
Banking on Earnings
Now that the major banks have reported earnings, Cramer circled back to see which ones stood out the most.
Wells Fargo (WFC) remains the underdog in the group, but that means it's graded on a curve. The company delivered a sales and earnings beat and boosted its buyback, which made it Cramer's one to buy.
Morgan Stanley (MS) also reported excellent earnings and is also transforming itself into a solid fee-generating business that should provide stable returns for shareholders.
Goldman Sachs (GS) delivered jaw-dropping earnings that are becoming routine with this terrific bank. Cramer said investors can't go wrong with Goldman.
Citigroup (C) was one of the few banks that seems to be moving in the wrong direction, with earnings that weren't all that impressive and expenses that are on the rise.
Cramer said that JPMorgan Chase (JPM) continues to be a student that once again produced straight As. That makes it a great company, but a lackluster stock.
Finally, there's Bank of America (BAC) , the most interest rate sensitive of all the banks. Cramer said if you believe interest rates are on the rise, this is the bank to own.
Nowhere to go but Down
In his "No Huddle Offense" segment, Cramer warned investors about "peaks." When something has peaked, that's it, it's over. Things can only get worse from here.
The market is dealing with several peaks right now. The first is China. After the Chinese government crushed shareholders of Didi (DIDI) a day after its U.S. debut, all Chinese stocks became toxic.
There's also a peak in the semiconductors, as some analysts proclaim the chip shortage is over. Cramer said it's not over, there's simply a pause in demand, which is why this is the only group that should be bought on weakness.
Still other peaks include oil, which Cramer foretold in last week's "Off The Charts" segment, and the peak in leisure and entertainment, which is being brought on by COVID's resurgence.
Here's what Cramer had to say about some of the stocks that callers offered up during the Mad Money Lightning Round Monday evening:
Academy Sports and Outdoors (ASO) : "I still like it. I'm a buyer."
Sherwin-Williams (SHW) : "Raw costs are too high. I don't think you can buy this one until costs start to come down."
SoFi Technologies (SOFI) : "This one has been a nightmare, but I'm a buyer at the $14 level."
General Electric (GE) : "I don't think it's great, I don't think it's bad. It's just OK."
Sysco (SYY) : "This is a reopening stock. I'm going to say no right now."
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At the time of publication, Cramer's Action Alerts PLUS had a position in MS, WFC.