The bulls are once again running free in the stock market, Jim Cramer told his Mad Money viewers Thursday. Even on a day when the averages should have been mauled by bad news, many sectors were able to stage a rally by the close. How did that happen? Simple: We're no longer fighting the Federal Reserve.
Cramer explained that he's a disciple of Marty Zweig, the late legendary fund manager who taught a whole generation of investors, "don't fight the Fed and don't fight the tape." That's because when the Federal Reserve is raising interest rates, and the economy is slowing, stocks typically decline.
That was the situation we were in from October through December, Cramer said, as Fed Chair Jay Powell told investors that the economy was red hot, and needed one rate hike in December and three more in 2019. Powell even went as far as to say he was willing to overshoot on interest rates in order to tamp down inflation.
But that all changed after Powell adopted a wait-and-see approach to give the economy some time to breathe. The statement proved the Fed has not lost touch with reality, Cramer said -- which is reassuring to Wall Street.
That's why Thursday, despite a 17.6% plunge in Macy's (M) - Get Report , after the retailer slashed its estimates, the bulls didn't get derailed. Cramer said there was a rash of bad news today, not only from Macy's, but also American Airlines (AAL) - Get Report , which also cut its forecast. Homebuilder KB Home (KBH) - Get Report followed Lennar (LEN) - Get Report in citing weakness in housing, adding to a growing list of contracting corporate revenues.
But none of that matters much when the markets aren't fighting the Fed and the economy is allowed to grow. Even with the lack of a trade deal, there are reasons to be buying stocks.
Cramer and the AAP take a closer look at Kohl's (KSS) - Get Report holiday season sales numbers. 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: Intel
For his "Executive Decision" segment, Cramer sat down with Bob Swan, interim CEO, and also the CFO, of Intel (INTC) - Get Report , the semiconductor maker with shares that were up 2% for 2018 and have a 2.5% dividend yield.
Swan said that this is an exciting time for Intel. The company is primarily still known as a PC chipmaker, but in reality, it's inside the data center, factories, autos, retail and more. The company's acquisition of MobileEye has made them a leader in autos, he said, and Intel's chips are powering safety, driver assist and autonomous driving systems.
When asked about the company's low multiple of just 10.6 times earnings, Swan said Intel is still seen as a company having a 90% market share in the slow-growing PC business. But when you add up all of their end markets, they're addressable market is $300 billion and their market share is less than 25%. Intel continues to build a great portfolio of products from CPUs to modems and more, he said.
Over on Real Money, Cramer says Bed Bath & Beyond (BBBY) - Get Report demonstrates our systemic deflation. Get more of his insights with a free trial subscription to Real Money.
The Race Back to $1 Trillion
In the race to get back to a $1 trillion valuation, there are still only four companies in the running, Cramer told viewers, but among the four, there's a new favorite to win.
Last year, all eyes were on Apple (AAPL) - Get Report , an Action Alerts PLUS holding, as the company beat out Amazon (AMZN) - Get Report , Microsoft (MSFT) - Get Report and Alphabet (GOOGL) - Get Report to become the first company to surpass the trillion-dollar milestone. But after a horrific fourth quarter for all four companies -- one that briefly gave Microsoft, and just this week Amazon, the lead -- it's time to reevaluate.
Amazon is the clear favorite to win in the current environment, Cramer said. Shares would need to rally 23% from current levels, but that's now crazy given its strength in cloud, advertising and retail.
Microsoft is the safest of the bunch, Cramer said, and shares held up the best during the fourth quarter. But despite reigniting growth in its cloud and Office365 offerings, it's not likely to win the trillion-dollar race.
Google remains a strong contender, Cramer said, but is still misunderstood by Wall Street. The company has a great advertising business and moonshot projects in autonomous driving and healthcare. At 23 times earnings, Cramer said he's a buyer.
Finally, there's Apple, which now trades at a ridiculous 11 times earnings. Cramer said there's still a lot to like at Apple, as he learned on Monday after interviewing Apple CEO Tim Cook.
Executive Decision: Salesforce
Block said it's a great time to be in the technology industry. As Salesforce celebrates its 20th anniversary, the amount of digital transformations and changes in business models has never been greater. We're now in a market of "disrupt or be disrupted," Block said, and companies must embrace the cloud to provide better customer experiences.
When asked about competition from Amazon, among others, Block said that in a high-growth market like theirs, companies use multiple technologies and are always looking for the best fit for the task at hand.
Finally, when asked about their values, Block said that Salesforce is a values-driven company and their No. 1 value is trust. The company's not just about Wall Street and earnings, he said, they're about listening to all stakeholders, including their customers who must trust that Salesforce will do right by them.
Not All Retailers Are Equal
In his "No-Huddle Offense" segment, Cramer said in the new economy, not all retailers are created equal, and that notion was on full display this quarter.
Shares of Macy's plunged 17.6% after the company slashed its guidance. Target (TGT) - Get Report and Kohl's (KKS) , while not nearly as bad, also saw their shares fall in sympathy. Meanwhile, sales were up at Amazon, Costco (COST) - Get Report and the dollar stores like Dollar Tree (DLTR) - Get Report .
What's the takeaway? Cramer said ever since the recession, shopping habits have changed. If you're a mall-based retailer selling at full price, you're going to struggle. Consumers are looking for value and bargains, and those come from places like Costco and DollarTree.
Cramer said at these levels, all of the negatives are already priced into Macy's, Kohl's and Target, and he'd be a buyer. But only for a trade, he added, as there are no catalysts to propel these stocks beyond a short-term bounce.
In the Lightning Round, Cramer was bullish on Public Service Enterprise (PEG) - Get Report , American Electric Power (AEP) - Get Report , DexCom (DXCM) - Get Report , Take-Two Interactive (TTWO) - Get Report and Starwood Property Trust (STWD) - Get Report .
Cramer was bearish on Cliffs Natural Resources (CLF) - Get Report , Sina (SINA) - Get Report , Annaly Capital (NLY) - Get Report , Neutral Tandem (TNDM) - Get Report and Ladder Capital (LADR) - Get Report .
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At the time of publication, Cramer's Action Alerts PLUS had a position in KSS, CRM, AAPL, AMZN, MSFT, GOOGL.