Too Much Risk?: Cramer's 'Mad Money' Recap (Friday 1/10/20)

As we leap into earnings season, Jim Cramer look at profits, trade, employment, inflation and whether this rally is worth the risk. Here's your game plan for next week.
Author:
Updated:
Original:

Next week is make or break for the stock market, Jim Cramer told his Mad Money viewers Friday. That's because next week we'll learn whether this earnings season's reports justify the rally we've seen or whether stock prices are indeed too lofty to last.

Cramer's game plan for next week starts on Monday with the annual JP Morgan Chase Healthcare Conference. Every year, this conference gives investors tons of great information on coming drugs and advancements and this year should be no different. 

Next, on Tuesday, we hear from JPMorgan Chase  (JPM) - Get Report itself, along with Wells Fargo  (WFC) - Get Report and Citigroup  (C) - Get Report as well as Goldman Sachs  (GS) - Get Report and Bank of America  (BAC) - Get Report on Wednesday. Cramer said he expects to hear good things from all of these banks, but worries about profit-taking after big runs in their stocks. 

Also on Wednesday, we'll hear from UnitedHealth Group  (UNH) - Get Report, a stock that's been rallying ever since the topic of universal healthcare died down as a campaign promise by the leading Democratic candidates. We may also get Phase 1 of a trade deal with China signed, an event which could boost the markets all on its on. 

Thursday brings earnings from Morgan Stanley  (MS) - Get Report, PPG Industries  (PPG) - Get Report and railroad CSX  (CSX) - Get Report. Cramer said Morgan Stanley is cheap at 10 times earnings and PPG should have positive things to say. CSX is a bellwether for our economy growth and should also be strong. 

Finally on Friday we hear from oil service giant Schlumberger  (SLB) - Get Report and Cramer is not expecting good news following the cautious comments from Core Labs  (CLB) - Get Report this quarter. 

Cramer and the AAP team are looking at everything from earnings and tariffs 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: Parsley Energy

For his "Executive Decision" segment, Cramer spoke with Matt Gallagher, president and CEO of Parsley Energy  (PE) - Get Report, the oil producer in the heart of the Permian Basin with shares that are up 10% over the past three months. 

Parsley began in 2009 as an unconventional shale provider, Gallagher explained, and now with their acquisition of Jagged Peak, they're able to expand into the neighboring Delaware Basin. 

While the company was built to recover resources, they're now focusing on delivering high and consistent margins that will translate into great returns for shareholders. 

Parsley is also focused on their social impact, recently delivering their first annual report on the topic. Gallagher explained that while some oil companies flare up to 30% of their excess natural gas into the environment, Parsley flared just over 2%, making them a leader in the space.

On Real Money, Cramer keys in on the companies and CEOs he knows best. Get more of his insights with a free trial subscription to Real Money.

Tech Rally

What's fueling the rally in tech? Cramer told viewers it's the same thing that fueled the rally in the healthcare providers -- the Democratic presidential candidates turning their attention elsewhere. 

Last year, stocks like UnitedHealth Group and Humana  (HUM) - Get Report were under a lot of pressure as Democratic Sen. Elizabeth Warren and others took aim at healthcare, indicating they wanted to replace the industry with a single-payer system. But as Warren changed her stance and began dipping in the polls, the healthcare stocks recovered. 

We're now seeing a similar pattern in tech. As the calls for investigations and breakups of Facebook  (FB) - Get Report, Alphabet  (GOOGL) - Get Report and others begin to wane, the tech giants are beginning to rally. These tech stocks are also paying a lot more attention to their public image, Cramer noted, which helps to sooth investors' fears.

Executive Decision: Mobileye

In his second "Executive Decision" segment, Cramer sat down with Amnon Shashua, president CEO of Mobileye, to talk about the state of autonomous cars. Mobileye was acquired by Intel  (INTC) - Get Report in 2017. 

Shashua said autonomous driving is a revolution on many fronts, the first of which is safety. It takes a lot of technology to teach a machine to drive, he said, but once it learns, machines can be safer than humans. 

The second revolution is that of transportation itself. Shashua said right now, the cheapest cost per mile is to own your own car and drive it yourself. But soon, autonomous cars will be cheaper than even public transportation. 

When asked about the timeline for autonomous vehicles, Shashua said he expects robo-taxis to be on the road by 2022. Taxi operators, he said, will be the first place self-driving cars start because the costs and regulatory requirements will be high. Over time however, the technology will funnel down into personal vehicles as well.

Healthcare Industry

In a special interview, Cramer sat down with Lisa Gill, Healthcare Tech & Distribution Analyst at JP Morgan Chase, to talk about what to expect from the 450 companies that will be presenting at next week's 38th Annual J.P. Morgan Healthcare Conference. 

Gill said the consumer is becoming increasingly important in healthcare, especially as out-of-pocket costs rise. She said companies like Teledoc  (TDOC) - Get Report and CVS Health  (CVS) - Get Report are reinventing primary healthcare. Walgreens Boots Alliance  (WBA) - Get Report has proven that partnerships aren't enough, companies must own the services they provide. 

Gill is expecting to hear good things from bigger companies like Bristol-Myers Squibb  (BMY) - Get Report at next week's conference, and as always, the focus will be on wellness, because staying well is always less expensive than being sick. 

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 Friday evening:

REGENXBIO  (RGNX) - Get Report: "This is totally speculative. It's an unproven company." 

Laredo Petroleum  (LPI) - Get Report: "I'm not a fan of the industry right now." 

MKS Instruments  (MKSI) - Get Report: "This is a high-tech instrument company. I think it's good." 

Invitae  (NVTA) - Get Report: "We need these companies and I support it. " 

TG Therapeutics  (TGTX) - Get Report: "This one is real." 

Vertex Pharmaceuticals  (VRTX) - Get Report: "I think the stock is undervalued." 

Kinder Morgan  (KMI) - Get Report: "It's got a 4% yield. It's fine, but I don't care for the industry." 

Ventas  (VTR) - Get Report: "I struggle with this one. The last quarter wasn't good."

Search Jim Cramer's "Mad Money" trading recommendations using our exclusive "Mad Money" Stock Screener.

To watch replays of Cramer's video segments, visit the Mad Money page on CNBC.

To sign up for Jim Cramer's free Booyah! newsletter with all of his latest articles and videos please click here.

At the time of publication, Cramer's Action Alerts PLUS had a position in JPM, GS, UNH, SLB, C, CVS, BMY.