Cramer continues to tell his Mad Money viewers that the market has been primed to go down. That was the case on Wednesday as well.
He said he knew it was time to start raising cash when the proprietary S&P Short-Range Oscillator, a tool to which he subscribes, signaled an overbought condition. Cramer said he didn't know why the market would pull back, he didn't know about the ISM PMI number, or that the impeachment news that hit stocks was looming.
He simply raised some cash as the market appeared overbought. So, does it now say it's oversold and time to bounce yet?
Unfortunately, no. But that doesn't mean investors can't start nibbling some of their favorite stocks. He likes names like Walmart (WMT - Get Report) and Target (TGT - Get Report) , or high-yield stocks with secure dividends, like Ventas (VTR - Get Report) and Consolidated Edison (ED - Get Report) .
However, investors shouldn't buy stocks that were already hated going into the selloff, Cramer said, citing energy stocks as one example.
Hold tight, he reasoned, as the market will improve eventually. It's just not right now.
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Executive Decision: Paychex
The company just beat on earnings and revenue expectations and raised its guidance. Paychex also has a solid dividend yield of roughly 3%, Cramer noted.
It was a "solid first quarter," Mucci said, with revenue growing 15% year-over-year and operating income jumping 9%.
While many investors are worried about the economy, Mucci was upbeat. Job growth is picking up, and while it's down slightly year-over-year, he said that's due to the U.S. having a tight labor market.
Further, wages are up and so are working hours. That's good for the consumer. As for the trade war, the company's surveys suggest roughly 75% of respondents -- mostly from small- and medium-sized business with less than 50 employees -- don't expect to be impacted.
Finally, the company continues to leverage technology to improve various services with its clients and with its clients' employees. That's helping to fuel Paychex's growth, Mucci said.
IPO Day of Reckoning
Is the IPO market hitting a tipping point?
The stock market mostly comprises three different parties: Large investors/funds, small institutions and retail investors.
Large investors have practically traded themselves into oblivion, with many hedge funds underperforming the S&P 500 for quite some time. Small institutions continue to sell out of stocks and rotate into bonds, while retail investors largely believe in a buy-and-hold strategy, Cramer said.
In short, no one's left to buy in on new IPOs -- no one seems to want them, particularly when they don't make any money.
It would be fine if we only got a few IPOs once in a while, but we're getting a stream of high-profile IPOs looking to raise a huge amount of cash. The end result? There's not enough money to go around, sinking stocks like Uber (UBER) , Lyft (LYFT) and Peloton (PTON) and others.
There may be a day of reckoning coming, where private companies realize that maybe their best alternative is to avoid the public market, Cramer reasoned, and that day may be approaching faster than many investors realize.
Straightforward Staples Like Spices
Cramer took a closer look at McCormick (MKC - Get Report) , noting how well it did on Tuesday while the rest of the market tumbled. The stock didn't rally despite market weakness, he said, it rallied because of the market weakness.
McCormick, which fell 1.3% on Wednesday, reported a big earnings beat, but missed on revenue expectations. Further, the company provided better-than-expected earnings guidance, but below-consensus revenue estimates.
It's fair to say this was a mixed quarter, particularly when the yield is just OK at 1.37% and with a valuation that is somewhat high.
But after a slow start, shares really took off after a positive conference call from management and after a PMI report that had investors worrying about a recession, Cramer noted.
It helps that margins continue to improve, the company is successfully marketing to its customers and management is confident it can hit its estimates even if there's an economic slowdown.
As long as the market remains choppy, McCormick remains a buy. He reasoned that in uncertain times, a straight-forward staple stock like McCormick is one that investors can bank on to do well. And that's exactly why it did well when the market fell on economic worries.
On Real Money, Cramer says investors are culling the stocks that are worth owning and shedding those that aren't. Get more of Cramer's insights with a free trial subscription to Real Money.
On Tuesday, Charles Schwab (SCHW - Get Report) announced it will eliminate commissions on stocks, options and ETFs. TD Ameritrade (AMTD - Get Report) and E-Trade Financial (ETFC - Get Report) were forced to follow suit, otherwise they risked losing customers to a competitor.
This comes as other startups, like Acorns and Robinhood, are already offering free trades, disrupting the entire industry, Cramer said.
While some investors may be tempted to go bottom-fishing here, that may not be a good idea. When an entire industry is facing disruption, it usually takes a toll for a while, he reasoned, pointing out that many of these stocks peaked more than a year ago.
For those that feel compelled, look at Schwab. Shares were hit 10% on Tuesday after its announcement and another 3.3% on Wednesday.
However, just 6% of its total revenue comes from commissions vs. 16% for E-Trade and 24% for TD Ameritrade. Plus, Schwab made the move first, so it's likely the best prepared in the short term.
But buyer beware: Buying Charles Schwab now may be equivalent to buying the best house in a bad neighborhood, Cramer concluded.
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