It may seem hard to believe, but all it takes for the stock market to sell off is four little words. Those four words came from Federal Reserve Chair Jay Powell, Jim Cramer told his Mad Money viewers Tuesday, and they were "a few months earlier."
Powell was referring to the Fed's bond buying program, a program which it had already indicated would be winding down as the pandemic subsides. But Tuesday, Powell said bond buying would be ending sooner than expected, and that was all it took to send investors into a panic.
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The news itself was obvious, Cramer explained, but the timing couldn't have been worse given investors' worries over the Omicron variant.
What does all of this mean for the average index fund investor? Not much, Cramer said. Individuals are buying stocks for the long term, which makes today's short-term weakness nothing more than a buying opportunity.
He remained cautious however, telling viewers to wait until the first confirmed case of Omicron here in the U.S. That event will likely spur even more selling and hopefully mark a short-term bottom.
In the meantime, investors can still buy technology stocks like Amazon (AMZN) - Get Amazon.com, Inc. Report, ServiceNow (NOW) - Get ServiceNow, Inc. Report, Microsoft (MSFT) - Get Microsoft Corporation Report and Tesla (TSLA) - Get Tesla Inc Report. They can also buy the dividend stocks, which will continue to do well in this environment.
At the end of the day, it's better that the Fed announced its plans. Now that the damage is done, the markets can begin to move forward.
Executive Decision: Salesforce.com
In his first "Executive Decision" segment, Cramer spoke with Marc Benioff and Bret Taylor, CEO and COO of Salesforce (CRM) - Get salesforce.com, inc. Report. Today, Salesforce announced that Taylor would be joining Benioff as co-CEO. Shares closed down 6% on the day along with the broader markets.
Taylor has been with Salesforce in the COO role for over five years and he said he's excited to now be able to partner with Benioff on the next chapter. Benioff said he has no plans to leave the company he founded and he still enjoys speaking with all of the company's customers and stakeholders.
Demand is strong at Salesforce, Taylor said, despite the company's cautious guidance. He said the core CRM and service clouds continue to grow and Slack exceeded expectations by over $30 million.
Benioff added that after delivering $26.4 billion in revenues this year, the company is forecasting $31.8 billion next year. Salesforce continues to grow faster than expected.
Executive Decision: PayPal
For his second "Executive Decision" segment, Cramer also spoke with Dan Schulman, president and CEO of PayPal (PYPL) - Get PayPal Holdings, Inc. Report, the payments processor that's seen its shares plunge from highs near $310 a share to just $185 Tuesday as fintech has fallen out of favor on Wall Street.
Schulman first gave an update on the start of the holiday shopping season. He said digital sales were flat this year, after rising by 50% last year. Retail sales, however, have fallen 26% from their pre-pandemic levels in 2019. These trends indicate that online shopping is here to stay.
PayPal forecast 55 million net-new active users this year and Schulman said it remains on target to deliver that number. The company also is expected to meet the target of 750 million total users by 2025.
When asked about involvement in the popular buy-now, pay-later space, Schulman said that while PayPal doesn't get a lot of the hype, it is one of the top four players in the world. Buy-now, pay-later sales were up 400% year-over-year on Black Friday.
Schulman also commented on the rumors that PayPal was in talks to acquire Pinterest (PINS) - Get Pinterest, Inc. Class A Report. He said that PayPal looks at hundreds of potential acquisitions every year and has spoken to many many companies. PayPal doesn't need an acquisition to meet guidance, he added.
Finally, when asked about competition like Shopify (SHOP) - Get Shopify, Inc. Class A Report and Square (SQ) - Get Square, Inc. Class A Report, Schulman noted that one out of every four transactions on Shopify is powered by PayPal, so as e-commerce grows, so too does PayPal.
Omicron and Your Portfolio
In a special interview, Cramer checked in with Dr. Eric Topol, the founder and director of the Scripps Research Translational Institute, for the latest on Omicron and what it means for your portfolio.
Dr. Topol said that all travelers from Africa to the U.S. are being tested and traced, but so far, Omicron hasn't been detected. It is almost inevitable, however, that the fast-spreading variant will eventually make its way to the U.S.
There is still a lot we don't know about Omicron, including whether or not the virus looks different enough to our immune system that our current vaccines won't be effective. However, we know that after receiving booster shots of our current vaccines, the immune response is strong and wide, so it's likely that it will be detected.
The main takeaway from Omicron is that everyone should get a booster. Topol said we've always known this was a three-shot vaccine, we just didn't know how long the first two doses would last before the third shot was needed. We now know that timeline is now.
We Can't All Be Right
In his No-Huddle Offense segment, Cramer offered some context for today's selloff. He said there were four types of sellers today. The first group is scared of inflation and will use every opportunity to scare you out of stocks. The second group knew that the Fed would tighten, but didn't expect it this fast. The third group is just trying to lock in their gains so they can buy back in at lower levels. And the fourth group is worried about an Omicron slowdown.
The problem is that all of these groups can't be right. If there is a slowdown, then the Fed won't tighten as fast. And if the Fed does tighten, then things must not be as bad as we thought. That means there will be buyers returning to the market soon, which is why it makes sense to use the weakness and do some buying.
Here's what Cramer had to say about some of the stocks that callers offered up during the Mad Money Lightning Round Tuesday evening:
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