What happens next week could cast a shadow on this entire earnings season, Jim Cramer told his Mad Money viewers Friday, as he unveiled his game plan for next week's action.
On Monday, Cramer will be watching for updates on the COVID delta variant and the latest tensions with China, either of which could send the markets lower.
Next, on Tuesday, we'll be met with the latest Consumer Price Index, which Cramer expects will reignite those worried about inflation. We'll also get earnings from PepsiCo (PEP) , JPMorgan Chase (JPM) and Goldman Sachs (GS) . All of these could be problematic depending on the commentary the companies provide.
Wednesday brings comments from Federal Reserve chair Jay Powell, which should throw cold water on the inflation thesis, as many commodity prices have begun to decline. On the earnings front, we'll hear from Well Fargo (WFC) , Bank of America (BAC) , Citigroup (C) and BlackRock (BLK) , along with Delta Air Lines (DAL) . Cramer said Delta in particular is hard to read given recent COVID surges.
Then on Thursday, we'll learn whether chip prices have peaked with Taiwan Semiconductor undefined. Cramer was bullish on UnitedHealth Group (UNH) , which also reports.
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: Synaptics
In his first "Executive Decision" segment, Cramer spoke with Michael Hurlston, president and CEO of Synaptics (SYNA) , the touch interface maker with shares up 419% over the past two years.
When asked about their recent success, Hurlston said one of the biggest improvements the company has made is diversifying its product portfolio to improve gross margins. Margins had historically been pegged at 38%, he said, but now are hovering near 55%.
Those improved margins have been driven by diversifying away from mobile products and into PCs and IoT devices. Mobile accounted for 63% of sales two years ago, but only accounts for 25% today. Meanwhile, IoT devices now make up 25% of sales.
Hurlston was also bullish on two recent acquisitions, which have added biometrics and fingerprint recognition to the product portfolio. Synaptics is now well positioned for the "hoteling" trend where employees share office space. Now one docking station can securely serve multiple employees.
Executive Decision: Lightspeed
For his second "Executive Decision" segment, Cramer also spoke with Dax DaSilva, founder and CEO of Lightspeed POS LSPD, the small business commerce platform. Shares of Lightspeed closed up 4% Friday.
DaSilva admitted that commerce technology is a crowded space, but said Lightspeed competes by moving beyond just point-of-sale systems to become a one-stop shop for all of a businesses commerce needs. Over the past two years, commerce has changed rapidly, he explained, and businesses need delivery, e-commerce, appointment setting and even supply chain management functionality.
That's why Lightspeed has been making acquisitions to bring all of the best-of-breed players together under one roof and into one unified platform that their customers love.
Lightspeed's customers are mostly well established businesses, DaSilva added, which means they are less likely to churn. They are also forward looking, he said, and appreciate Lightspeed's full suite of features.
It's a Check Mark Economy
In his "No Huddle Offense" segment, Cramer urged viewers to stop trying to describe our economic recovery with letters of the alphabet. We're not seeing a flatlined L recovery, nor are we getting a U-shaped recovery or a quick V-shaped bounce. It's time to retire the alphabet, Cramer said, and think of our recovery as a check mark, where 2021 is shaping up to be a whole lot better than 2019 before the pandemic began.
Just one example of this post-pandemic phenomenon is Levi Strauss (LEVI) , which finds itself in a powerful denim cycle because no one seems to fit in their pre-pandemic jeans. Mall operator Simon Property Group (SPG) is also a big post-pandemic winner, re-leasing failed storefronts to growing retailers at big premiums.
Everything from warehouses to data centers are booming, as is housing, oil exports, and lots more. And that's not even counting what is shaping up to be a huge back-to-school shopping season.
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How Stable is Tether Stablecoin?
Lots of people talk about the potential rewards of owning cryptocurrencies, but just about no one talks of the risks. That's why Cramer once again raised the red flag on Tether, a crypto asset known as a stablecoin.
Stablecoins are digital currencies that are, in theory, pegged to stable assets, like the U.S. dollar or gold. Stablecoins are supposed to be stable in value, thus making business transactions possible without the volatility of most other cryptocurrencies.
But as Cramer pointed out a few weeks ago, Tether could be a ticking time bomb. The company behind Tether supposedly has $60 billion in reserves, with about half of that value held in commercial paper. The problem? None of the largest traders in commercial paper have ever heard of Tether and the company provides no transparency into what, exactly, it owns.
Tether claims to be buying their commercial paper through intermediaries, but they're not saying which banks they're buying from. This is vitally important, Cramer explained, because commercial paper from China is very different than commercial paper from the U.S. or Canada.
Adding to the worries, another stable coin, TITAN, collapsed to zero in a matter of minutes. Cramer said TITAN is not the same as Tether, but it shows that if there's a run on Tether, it could have considerable risks to a number of asset classes.
Here's what Cramer had to say about some of the stocks that callers offered up during the Mad Money Lightning Round Friday evening:
Atkore International Group (ATKR) : "This is the kind of stock that works here."
Cerus (CERS) : "This is a niche, speculative business. I'm going to say no."
Cemex (CX) : "I like these guys. This is a great play on infrastructure."
Zynga (ZNGA) : "Zynga is a great stock."
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At the time of publication, Cramer's Action Alerts PLUS had a position in WFC.