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Cramer's Mad Money Recap: Chevron and a Rally Recipe

Cooking up a sustainable rally takes a long list of ingredients.
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If we want to see a sustainable rally, a lot of things need to go right, Jim Cramer told his Mad Money viewers Wednesday. The next few weeks are historically brutal for stocks, he said, but that doesn't mean we can't overcome the seasonal declines. What needs to go right? Cramer outlined 15 things investors will need to see. Unfortunately, they'll need to see all of them.

Cramer's ingredients for a sustainable rally included good news on employment, moderating inflation and some relief to the ongoing semiconductor shortage. The latter, he said, no one expects to go away anytime soon. Speaking of shortages, we also need to see supply chain problems getting fixed and our ports able to move goods more quickly.

Along those same lines, Cramer said earnings need to show us that supply and demand are starting to return to balance, especially ahead of the holiday season. Input costs also need to keep declining, as some already have.

Next, we need to see schools open and stay open. That will allow more parents to head back to work. We'd also need hospitalizations decrease and hotels and air travel increase.

Finally, Cramer said we need fewer IPOs, more stock buybacks and most importantly, we need Washington and Beijing to get off the front page and stop worrying investors about taxes and trade.

If we can get all of these things, Cramer concluded, the market would soar. But it is, admittedly, an awful lot to ask.

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Executive Decision: Chevron

In his first "Executive Decision" segment, Cramer sat down with Mike Wirth, chairman and CEO of Chevron  (CVX) , on the heels of the company's investor day where they laid out Chevron's sustainability mission and goals.

Wirth admitted that Chevron is a very different energy company today than when he joined 40 years ago. But Chevron is listening to shareholders that are demanding more environmental responsibility and increases in sustainability. That's why Chevron has tripled it's commitment to invest in faster-growing, lower-carbon energy sources.

You won't see Chevron investing in wind or solar, however, because those areas are maturing. Instead, Chevron is investing into green hydrogen and green natural gas from dairies and landfills. The company has already partnered in a utility-scale green hydrogen project in Utah that will supply electricity to California, for example.

Chevron now has a dual strategy. It aims to continue being a leader in a diverse energy environment while still creating value and returns for its shareholders. There are many markets where electrification doesn't make sense, Wirth explained, and those are places where Chevron can add real value.

As for creating shareholder value, Wirth said Chevron has always been disciplined with their capital allocation and these new investments will be no different.

Executive Decision 2: Weber

For his second "Executive Decision" segment, Cramer also spoke with Chris Scherzinger, CEO of Weber  (WEBR) , the grill maker with shares that popped 7.2% after the company reported its first earnings as public company.

Scherzinger said the macro trends towards backyard living continue to work in Weber's favor. The company delivered 19% top-line growth this quarter, after increasing top-line growth 41% in the same quarter last year.

Much of Webers renaissance stems from new product innovations, like their Traveler portable grill that opens up new possibilities for gatherings and tailgating. Scherzinger was also bullish on their new Weber Connect Hub, which connects your grill to the cloud for the perfect grilling experience.

When asked about their debt, Scherzinger said Weber is investing in a new plant in Poland which will change their supply chain and cost structure so they will be able to lower debt even quicker. 

Executive Decision 3: Cisco

For his final "Executive Decision" segment, Cramer checked in with Chuck Robbins, CEO of Cisco Systems  (CSCO) , which just completed their annual investors day. Shares of Cisco have risen 42% over the past year.

Robbins said Cisco has been transitioning from a hardware company into a software company for the past six years and in their briefing, they showed shareholders how Cisco was able to deliver on all of their promises. There are many technology transitions at play, he said, from 5G wireless, to Wifi 6, to hybrid working, and all of them work in Cisco's favor.

While some analysts called out Cisco for declining gross margins, Robbins said that they will continue to invest for growth and invest where they see the most opportunity. That's why the company's estimates for margins remained inline with their earlier forecasts.

When asked about their supply chain, Robbins said there are disruptions in many areas, not just semiconductors. He said Cisco has constraints in memory, power supplies and labor, just to name a few. He expected many of these issues won't be resolved until mid-2022 at the earliest.

Finally, Robbins noted that hybrid working has been a boon for Cisco, as every corporate meeting room must not be ready for video conferencing. The company's Webex meeting platform is just a small part of their overall meeting strategy.

 No Huddle Offense

In his "No Huddle Offense" segment, Cramer commented on his interview earlier Wednesday with Securities and Exchange Commission chairman Gary Gensler.

When it comes to financial engineering, it's not enough just to say "caveat emptor" or buyer beware, Cramer told viewers. For years, the SEC's stance was that as long as there was disclosure, investors knew what they were buying. But in the age of cryptocurrencies, SPACs, Chinese IPOs and commission-free trading, disclosures alone are not enough. The truth is that SPACs and Chinese entities aren't playing by traditional rules, and cryptos aren't being transparent enough, he added

Cramer said Gensler is committed to changing all of that, with new regulations and stronger enforcement. 

Lightning Round

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

Nio  (NIO) : "Pass, pass, hard pass. I'm not fooling around anymore. "

Canopy Growth  (CGC) : "Go buy Constellation Brands  (STZ) . I don't want that exposure."

Nisource  (NI) : "There's a stock I want to own. Great management and a good dividend."

Coupang  (CPNG) : "You can start a position here, but no more than that."

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At the time of publication, Cramer's Action Alerts PLUS had no position in the stocks mentioned.