The stock market is still upbeat on the economy, even though the economic data continues to worsen, Jim Cramer told his Mad Money viewers Thursday. That's because nearly $4 trillion was pulled out of the market earlier this year, and all of that money is slowly coming back now that things are starting to look a little brighter.
There are a number of positives helping to boost investor confidence. First is the potential for another COVID-19 relief bill from Congress. No one is sure yet what the bill might include, but just about everyone agrees we'll need more stimulus if the pandemic drags on. The second positive are the unprecedented actions by the Federal Reserve.
The third positive is the hope for an effective vaccine. Investors rallied behind Moderna (MRNA) - Get Moderna Inc. Report earlier this week, even though the clinical trial data was very preliminary. Lastly, there's a growing cohort in America that believes the virus is contained and the worry was blown out of proportion. This may be true in areas not significantly impacted by the virus, Cramer said, but for hard-hit areas, nothing could be further from the truth.
The stocks that sank Thursday were the global commerce stocks, those that fear increased trade tensions with China. Cramer said it's one thing to start a trade war with a strong economy, but it's entirely different when facing a recession with record unemployment.
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Executive Decision: Take-Two Interactive
In his first "Executive Decision" segment, Cramer spoke with Strauss Zelnick, chairman and CEO of Take-Two Interactive (TTWO) - Get Take-Two Interactive Software Inc. Report, the video game maker that just posted an 18-cents-a-share earnings beat with a 41% increase in revenues.
Zelnick said according to industry reports, interest in gaming has risen 40% as a result of a pandemic. Estimates are that gaming may rise 14% even after the pandemic passes. People have discovered and rediscovered gaming because of the stories and graphics and gameplay, but they stay for the social aspects, whether those are connections with family members or new friends around the globe.
Zelnick said that while 2020 is going to include the lightest movie schedule in years, Take-Two has a good catalog of games and titles that aren't levered to big movie releases. Even their sports franchises have been doing well without their live sports counterparts, although everyone is anxious for the return of sports.
Take-Two is donating 5% of the proceeds from their most popular titles to COVID-19 relief efforts, an amount in excess of $10 million.
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Executive Decision: Target
For his second "Executive Decision" segment, Cramer also spoke with Brian Cornell, chairman and CEO of Target (TGT) - Get Target Corporation Report, which just reported same-store sales up 10.8% for the quarter.
Cornell said he couldn't be prouder of his team. Target welcomed millions of new customers, both online and in-store, and they built a lot of momentum and trust with their customers. The quarter included a 140% rise in online sales and a 300% increase in pickup and delivery services.
Cornell credited Target's success to their multi-category strategy that includes food, medication, essential household supplies, electronics and everything people needed to shelter in place. He also credited their omni-channel strategy that allowed customers to purchase in the ways they are most comfortable with.
Cornell also commented on the $500 million Target invested in the health and safety of their people and customers. He said he will never apologize for spending to make a safe environment for people to buy their essential items. Their initiatives included premium pay for workers, four weeks paid leave for their most vulnerable employees, new safety and cleaning initiatives and social distancing efforts.
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Executive Decision: Palo Alto Networks
For his final "Executive Decision" segment, Cramer checked in Nikesh Arora, CEO of Palo Alto Networks (PANW) - Get Palo Alto Networks Inc. Report, the cybersecurity company that just posted a 23-cent-a-share earnings beat with billings up 24%. Shares of Palo Alto are up 23% in the last month.
Arora said that Palo Alto Networks saw the trends of digital transformation and the cloud coming a long time ago, and the pandemic is only accelerating those trends. Now, more than ever, companies need integrated solutions that cover the home and the office, which is what Palo Alto Networks provides.
When asked about our economy, Arora said he expects to see ebbs and flows as companies adjust to the new way of doing things. Companies will need choices and flexibility, he said, and Palo Alto Networks offers products to provide those choices.
The Future of Retail
In his "No-Huddle Offense" segment, Cramer said that as our economy reopens, investors need to realize that the new normal will not be the old normal.
As we just heard, gaming saw a big surge as people were stuck at home and starved for entertainment. But some of those new gamers will stay gamers, Cramer said, and that will have a lasting impact.
Then there's retail. The "mall is dying" thesis has been around forever, but the mall owners and retail REITs never saw major declines. That was until now. Shoppers may never return to crowded stores when everything they need can be bought online. Office REITs will suffer too, as companies shed space they don't need and can't afford.
Here's what Jim Cramer had to say about some of the stocks that callers offered up during the Mad Money Lightning Round Thursday evening:
Sony undefined: "I've liked this one for a long time."
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At the time of publication, Cramer's Action Alerts PLUS had a position in TTWO.