Welcome to September, the most volatile month of the year for stocks, Jim Cramer told his Mad Money viewers Wednesday. There are several reasons why this month is shaping up to be another wild one for traders, Cramer said, as he listed off investors' top worries.
The biggest reason we're likely to see more volatility is earnings shortfalls. Sherwin-Williams (SHW) proved that today when the company told investors about continued supply chain disruptions and raw cost inflation. These issues are especially important given reason No. 2, the Federal Reserve is betting on transitory inflation, but it's beginning to seem like that inflation is here to stay and might require a boost to interest rates to quell.
Over on Real Money, Cramer writes: 'I don't want to waste your time. The reasons I want you to be ready for volatility -- a Wall Street code word for a selloff -- are myriad.' Read Cramer's full list, the stocks he's concerned about and SPACs.
If interest rates rise, that will bring us to worry No. 3, more competition for high-yielding stocks. Nothing makes dividend-paying stocks look less attractive than no-risk, high-yield bonds.
The fourth reason for the volatility is, believe it or not, too much government stimulus. Cramer said with so much stimulus still headed our way, the markets might be in for a shock further down the road.
Finally, Cramer said the market's volatility is being aided by the continued excess supply of IPOs and China's continuing ambitions to flex its muscle and go after its biggest companies.
The good news is that the market can easily deal with any one of these issues, Cramer concluded. Unfortunately, it can't deal with all of them at once without stock prices being lower than where they are today.
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: Cleveland-Cliffs
In his first "Executive Decision" segment, Cramer once again spoke with Lourenco Goncalves, CEO of Cleveland-Cliffs (CLF) , the steelmaker with shares up 800% over the past 18 months as our economy begins to recover.
Goncalves explained that the new economy is no different than the old economy and everything that surrounds us is still being built with steel. Cleveland-Cliffs is a fully integrated and self-sufficient still producer, he explained and has its hands in everything from digging the ore out of the ground to stamping out parts made from completed steel.
Goncalves added that Cleveland-Cliffs remains focused on their customers with an eye on running a profitable business that makes money for its shareholders. Together, they're envisioning the future.
Finally, when asked about their environmental initiatives, Goncalves said that Cleveland-Cliffs is the cleanest steel producer in the world and operates some of the most modern facilities.
Executive Decision: Signet Jewelers
For his second "Executive Decision" segment, Cramer also spoke with Gina Drosos, CEO of Signet Jewelers (SIG) , the retailer with shares that have risen 318% over the past year, despite falling 4% Wednesday after the company reported stellar earnings.
Drosos said the team at Signet really delivered and it's clear that their new strategies are working. Despite the pandemic, customers are loving Signet's initiatives like virtual jewelry consultants, she said, and there's more momentum and optimism than ever.
Drosos was also bullish on their new product lines, including one in partnership with tennis star Serena Williams, which debuted today at the U.S. Open. Drosos said the new line is selling very well so far.
When asked about the health of the consumer, Drosos noted that gift-giving is back and Signet is seeing more engagements and weddings as the economy slowly reopens.
Executive Decision: SentinelOne
For his final "Executive Decision" segment, Cramer checked in Tomer Weingarten, co-founder, chairman, and CEO of SentinelOne (S) , the newly-minted cybersecurity company.
Weingarten said that SentinelOne continues to expand its global footprint with a robust go-to-market strategy. The company's autonomous platform for the monitoring, detection, and response to cyber threats is more in demand than ever, he added. His company saw 225% growth in deals over $1 million this quarter alone.
When asked about their success, Weingarten noted that artificial intelligence has become a major differentiator for SentinelOne. AI removes a lot of the noise and prevents a lot of breaches before they occur, Weingarten said, and that's far better than responding to incidents after they occur.
Artificial intelligence is also well-suited for ransomware attacks, Weingarten added. After several high-profile attacks, companies are finally starting to realize that everyone is a target and ransomware is something they need to take seriously.
Another Perspective on COVID
In his "No Huddle Offense" segment, Cramer opined on his recent trip to Italy, which afforded him a fresh perspective on the impacts of COVID-19.
Last year, Italy was one of the hardest-hit countries in the EU, Cramer recalled. But this year, he's never felt safer. That's because it's extremely hard to get into the country, he said, and you can't go anywhere without your EU vaccine passport.
In Italy, everyone from restaurants to shops to venues are allowed to ask for your passport and refuse service if you're not vaccinated. The result? Rapidly rising vaccination rates and plummeting infection rates. Six months ago, hardly anyone was vaccinated in Italy. Today, hardly anyone isn't.
In Italy, government-mandated vaccines aren't a freedom issue, they're a public health issue, and citizens are more than happy to line up and do their part. This has not only saved lives, it's helped turn around Europe's long-dormant economy.
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:
23andMe (ME) : "I think this stock should be higher."
AppHarvest APPH: "This stock is the future, but the future is not now. We're too early.
Starwood Property Trust (STWD) : "I think they're geniuses. This is a growth company and they're welcome on the show any time."
Big Lots (BIG) : "I haven't liked them for a long time and I've been right."
Smith & Wesson Brands (SWBI) : "These stocks that trade on gun legislation but that hasn't been a focus in Washington."
Rio Tinto (RIO) : "This is a stock that people think is going to do bad, but I like it."
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At the time of publication, Cramer's Action Alerts PLUS had no position in the stocks mentioned.