In the stock market, words are sometimes more important than actions, Jim Cramer told his Mad Money viewers Friday. That's how the Federal Reserve is able to tamp down inflation just by talking about raising interest rates. Between the Fed and the seasonal weakness between now and the July 4th holiday, Cramer said we're in for a rough week next week.
Cramer's game plan for next week starts off with more Fed-speak. On Monday, St. Louis Fed Chair James Bullard will speak, followed by Fed Chair Jay Powell on Tuesday. These dueling comments will likely continue putting pressure on oil, the industrials and the cyclicals, with tech the primary beneficiary. Cramer suggested buying some Amazon (AMZN) - Get Report, Nvidia (NVDA) - Get Report or Advanced Micro Devices (AMD) - Get Report on any weakness.
Earnings continue on Wednesday with Winnebago (WGO) - Get Report and KB Home (KBH) - Get Report. Winnebago will have strong results, but no one seems to care. If KB Home is strong, Cramer suggested buying Lennar (LEN.B) - Get Report.
On Thursday, we'll hear from Accenture (ACN) - Get Report, Nike (NKE) - Get Report and FedEx (FDX) - Get Report. Cramer said FedEx might not be able to hold its momentum and Nike hinges on growth in China. He was bullish on Accenture.
Finally, on Friday, we close the week with Paychex (PAYX) - Get Report, which could be a buy if it gets hit before it reports. Carmax (KMX) - Get Report will also provide an update on the red-hot used car market.
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When it comes to the Fed, Wall Street has always been afraid of its shadow. That's why stocks sold off at the mere mention of interest rate hikes that are still at least a year away. But while the impulse to react is strong when the selling starts, Cramer told viewers to sit back, relax and do nothing. That's because historically, the last week in June is horrible for stocks, and there will be still more fallout from the Fed early in the week.
But that doesn't mean there is nothing to buy. Cramer said he's still bullish on tech, and in particular, Amazon, which is getting ready for its annual shopping holiday, Prime Day. If the urge to buy is too great, and the market is down, Cramer blessed buying some Amazon into that weakness so you'll be ready for the post-July 4th stock market rally.
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The hyper-growth stocks are starting to show signs of life again, but Cramer warned viewers not to expect them to return to the speculative mania of 2020. That's because last year, many of these stocks were propelled by a virtuous circle created almost single-handedly by ARK Invest CEO Cathie Wood.
ARK Invest's ETFs were insanely popular last year, Cramer explained. As investors poured money into the ARK's funds, Wood bought more of her favorite stocks, which made them rise and in turn, lured investors to pour even more money into her funds.
But as the economy began to reopen, Wood lost her firepower, and ARK's Innovation ETF (ARKK) - Get Report is now down 5% for the year, compared to gains for the S&P 500 and the Nasdaq. In fact, ARK saw outflows in May, its first since 2019.
With Wood and ARK Invest no longer propping up the growth stocks, it will be a lot harder for them to rise. That makes their recent gains encouraging, but Cramer said it's still too early to tell if they have staying power.
Off the Tape
In his "Off The Tape" segment, Cramer spoke with Ryan Petersen, founder and CEO of the privately-held Flexport, a company trying to solve ocean freight backlogs through smart technology. Flexport came in at number 41 on this year's CNBC Disruptor 50 list.
Petersen explained that the problem with global shipping at the moment is that there simply isn't any space left on the boats that are sailing. However, Flexport's artificial intelligence software has scanned through the data of 400,000 shipping containers and has determined that most are only 70% full. That means by intelligently connecting shippers with containers, capacity can be increased.
Flexport is also giving its customers a better sense of when items are likely to arrive, so they can make more intelligent shipping decisions. He said it's not enough to get back to "normal," which such huge backlogs, we need to get to below normal until the backlogs are cleared.
When asked what "normal" means, Petersen admitted that between COVID and trade wars, normal will be hard to define for the foreseeable future.
Am I Diversified?
Closing out the week, Cramer played "Am I Diversified," speaking with callers and responding to tweets sent via Twitter to @JimCramer to see if investors' portfolios have what it takes for today's challenging markets. The first portfolio included Qorvo (QRVO) - Get Report, Costco (COST) - Get Report, John Deere (DE) - Get Report, Chevron (CVX) - Get Report and Amgen (AMGN) - Get Report. Cramer said this portfolio was perfectly diversified with great companies.
The second portfolio's top holdings included IBM (IBM) - Get Report, Fisker (FSR) - Get Report, Freeport-McMoRan (FCX) - Get Report, Apple (AAPL) - Get Report and Alibaba (BABA) - Get Report. Cramer said Apple and IBM no longer compete, so this portfolio is also diversified.
The third portfolio had Applied Materials (AMAT) - Get Report, RH (RH) - Get Report, Boot Barn (BOOT) - Get Report, Blackstone (BX) - Get Report and generator maker Generac (GNRC) - Get Report as its top five stocks. Cramer said there was no overlap in this portfolio either.
The final portfolio's top stocks were Alibaba (BABA) - Get Report, CSX (CSX) - Get Report, Roblox (RBLX) - Get Report, Maxar (MAXR) - Get Report and drug-maker Merck (MRK) - Get Report. Cramer suggested no changes to this portfolio either.
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