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Cramer's Mad Money Recap: Powell Got it Right

Jim Cramer says Fed Chair Jay Powell knows it's better to get people back to work sooner, and worry about inflation later.
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Jay Powell not only has a heart, he's got a brain too! That was Jim Cramer's takeaway from the Federal Reserve's comments earlier on Wednesday. Cramer told his Mad Money viewers that the only thing that surprised him was that so many people were surprised.

The Fed acknowledged the obvious, Cramer continued. Yes, there's inflation. Yes, inflation is bad and eventually the Fed will have to act to combat it. But for the moment, it's more important to put people to work than to fret over gradually rising prices.

Cramer said Powell knows what he's doing and six more months of the stars quo makes perfect sense. It gives the economy time to grow and bring back more of the jobs it lost, while at the same time, giving supply chains a chance to recalibrate.

In this environment, investors need to use any weakness to buy companies with better-than-expected earnings that can flourish in a low interest rate environment. That means the industrials and the tech stocks make great investments, at least for the time being.

In the meantime, Cramer gave a tip of the hat to Powell, who he said should be commended for having a zero-tolerance policy against unemployment.

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: Albertsons 

In his first "Executive Decision" segment, Cramer welcomed back Vivek Sankaran, president and CEO of Albertsons  (ACI) - Get Report, the grocery chain with shares at new all-time highs, up 11.3% for the year.

Sankaran said that the pandemic only accelerated the many changes Albertsons was already making at their stores, including offering better varieties of products and more private label items. They then accelerated their pickup and delivery options, which increased 200% over the year, and they were able to engage their shoppers with their loyalty program.

When asked about the state of the consumer, Sankaran noted that the consumer is really strong. Throughout the pandemic people stayed home and cooked more, he said, which led to an increase in fresh produce, a step up to quality meats, and increased spending on discretionary items like flowers.

Turning to the topic of inflation, Sankaran said they are seeing 3% to 4% price inflation, but so far, they've been able to offset those increases with productivity gains. There are still some shortages in some locations, he added, but for the most part, supply chains have adjusted to the new levels of demand.

Executive Decision: LyondellBasell

For his second "Executive Decision" segment, Cramer also spoke with Bob Patel, CEO of LyondellBasell Industries  (LYB) - Get Report, the chemical maker with shares up 55% over the past year. LyondellBasell also offers a 4.2% dividend yield.

Patel said the pandemic recovery is only just getting started, and while demand is increasing here in the U.S., Europe and Asia's reopenings are still ahead. Plus, the shortage in semiconductors has hampered multiple industries, from autos to appliances, and it may take another two years for those industries to catch up to demand.

LyondellBasell expects to be in a higher-price, higher-margin environment for at least another year.

When asked about this winter's storm and power outage in Texas, Patel explained that normally, they have six days of advance notice when severe weather is coming. That is more than enough time to slow their factories down and perform a clean, safe shutdown.

In the case of winter storm Uri, there was a sudden shutdown and power failure that damaged furnaces. The sudden freeze also burst many, many pipes, he said, leaving the entire Gulf Coast scrambling to repair with outages that lasted 30 to 45 days for most facilities.

Finally, Patel said that the pandemic showed the best and worst of the plastic industry. He said so many products, like personal protective equipment and syringes, depend on plastic, but more must be done to close the loop on plastic waste to ensure that every item can find its way back to a recycling facility.

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Executive Decision: Centene

For his final "Executive Decision" segment, Cramer checked in Michael Neidorff, chairman and CEO of health plan provider Centene  (CNC) - Get Report. Shares of Centene have risen 15% over the past three months.

Neidorff said that Centene's current focus is on expanding the company's gross margins, unlocking value and retiring debt to help bolster the balance sheet. He said Centene has always been very transparent with financials and what future plans will include.

When asked about the recent settlement in a case regarding their pharmacy benefit services, Neidorff offered his usual direct and candid response. He explained that while Centene would have prevailed in the case, the time, distraction and cost of fighting it in 22 jurisdictions made settlement the better offer. He said the settlement acknowledges no fault by Centene.

On Real Money, Cramer keys in on the companies and CEOs he knows best. Get more of his insights with a free trial subscription to Real Money.

The Great Reopening

In his "No Huddle Offense" segment, Cramer celebrated the reopening of California and New York with a look back at what the bears got wrong over the past 13 months.

Back at the beginning of the pandemic, Cramer was largely panned for his optimism that America's drug companies could beat COVID faster than any other virus. But his views weren't based on fantasy, they were based on homework. He spoke with the CEOs at Pfizer  (PFE) - Get Report, Moderna  (MRNA) - Get Report, Johnson & Johnson  (JNJ) - Get Report and Regeneron  (REGN) - Get Report, all of whom told him that the virus had been sequenced in record time and new technologies, along with government assistance could indeed make the impossible, possible.

Betting on science, it turns out, was indeed the right call, and those who were absurdly bearish a year ago have now faded into the background. That's why Cramer ends every show with the phrase, "There's always a bull market somewhere," because even in the middle of a pandemic, if you do the work, you can find one.

Lightning Round

Here's what Cramer had to say about some of the stocks that callers offered up during the "Mad Money Lightning Round" Wednesday evening:

Martin Marietta Materials  (MLM) - Get Report: "It might be a little rocky here, but I like this stock."

Bank of America  (BAC) - Get Report: "There's going to be some weakness over the next few days, but I'm in favor of buying a few days from now."

CRISPR Therapeutics  (CRSP) - Get Report: "People are drawn this stock, but I'd prefer Vertex Pharmaceuticals  (VRTX) - Get Report or Regeneron Pharmaceuticals  (REGN) - Get Report."

Advanced Micro Devices  (AMD) - Get Report: "When the Xilinx deal closes, AMD will soar."

AT&T  (T) - Get Report: "Nope."

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