The stock market is set up pretty well for the foreseeable future, Jim Cramer told his Mad Money viewers Monday. He offered up seven factors that are helping to drive shares higher.
First is the absence of IPOs. The markets have absorbed a record 485 deals so far this year, and every one of them soaks up capital that can't go somewhere else. Likewise, the demise of SPACs, or special purpose acquisition companies, is also helping to lessen the supply of shares.
The third factor affecting the markets is consumer savings. The American consumer, on average, is in great financial shape, with most having more savings after the pandemic than they had going in.
Fourth, the frenzy over cryptocurrencies is waning, allowing investors to once again focus on stocks. Fears over capital gains taxes also appear to be subsiding, giving a boost to the overall markets.
Lastly, Cramer noted that as earnings season winds down, many companies are spinning up their newly announced share buybacks, helping to reduce their share counts and put a floor under their shares. We're also seeing a nice influx of cash flowing into index funds, helping to lift the major averages.
Cramer said unless something systemic happens, he thinks this rally is likely to continue.
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Executive Decision: Martin Marietta Materials
In his first "Executive Decision" segment, Cramer spoke with Ward Nye, chairman and CEO of Martin Marietta Materials (MLM) - Get Martin Marietta Materials Inc. Report, the aggregates maker with shares up 29% so far in 2021.
Nye stated that 70% of all aggregate usage stems from what they've identified as "mega regions" within the U.S. That's why their recently announced acquisition of Heidelberg Cement's assets in California for $2.3 billion is so valuable. California is one of those mega regions, he said, with Los Angeles alone accounting for 80 million tons a year of aggregates. The deal gives Martin Marietta a great long-term position in this dynamic region of the country.
Outside of California, Nye noted that demand remains strong for everything from warehouses to data centers along many of our nation's largest highways, including I-95 in the East.
When asked whether Martin Marietta needs an infrastructure bill out of Washington, Nye said that while he expects there to eventually be a bill passed, there is more than enough work at the state and local level to compensate if there isn't.
Executive Decision: Utz Brands
For his second "Executive Decision" segment, Cramer also spoke with Dylan Lissette, CEO of snack food maker Utz Brands (UTZ) - Get Utz Brands Inc Class A Report. Shares of Utz are up 7.4% for the year.
Lissette said Utz continues to expand with top-line growth this quarter of 18%. They continue their acquisition strategy to grow into new markets and consolidate into their core brands like Utz and On The Border.
When asked about life post-pandemic, Lissette noted that while sales continue to be strong at mass market retailers and grocery stores, dollar stores are also now becoming popular destinations for snack foods and in some rural markets are even replacing convenience stores. He said as our economy reopens, Utz expects new items, like snack mixes, to be very popular.
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Right on Roblox
While there might not be a lot of love for turbo-charged growth stocks left on Wall Street, some companies defy the trend, Cramer told viewers. Case in point, Roblox (RBLX) - Get Roblox Corporation Class A Report, the online gaming platform that's proven to be a lot more than just a COVID winner.
After a strong debut via direct listing, shares of Roblox had seemingly stalled as many investors assumed the game maker had little to offer as our economy reopened. But after another strong quarter, shares shot up another 8.1% Monday, prompting Cramer to reiterate his position.
Roblox has been growing like a weed, with active users up 37% year over year with no signs of slowing post-pandemic. The company now boasts 43.3 million daily active users on its platform, fueled by an ecosystem of developers creating new content on its platform.
Beyond its growth, Cramer said the company is in a strong position due to its free cash flow increasing 300% and by its expansion plans in China, which are running ahead of schedule. He remained confident that there is a lot more room to run in Roblox.
When Inflation News Is Good
In his No-Huddle Offense segment, Cramer reminded viewers that it's not the 1970s. The economy isn't going to collapse under rising inflation, he said, despite what the pundits may tell you.
Why is Cramer so confident? First, the consumer is in great shape, with lots of cash and high savings. Second, retail spending is strong and is exactly what we want consumers to do. Third, wages are inflated, but that's a good thing, as they haven't kept pace for decades.
Finally, Cramer admitted that while there is a lot of commodity inflation, much of it is being caused by tariffs or short-term supply chain disruptions, both of which can resolve themselves.
Here's what Jim Cramer had to say about some of the stocks that callers offered up during the Mad Money Lightning Round Monday evening:
Vale (VALE) - Get VALE S.A. American Depositary Shares Each Representing one Report: "I think this is a multi-year move, but I do like Cleveland-Cliffs (CLF) - Get Cleveland-Cliffs Inc. Report more."
Nio (NIO) - Get NIO Inc. American depositary shares each representing one Class A Report: "You should be in Tesla (TSLA) - Get Tesla Inc. Report."
Social Capital Hedosophia (IPOB) - Get Social Capital Hedosophia Holdings Corp. II Class A Report: "I think you're fine with that one. I'd buy some."
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At the time of publication, Cramer's Action Alerts PLUS had no position in the stocks mentioned.