The stock market is not a proxy for our economy, it's a proxy for big business, Jim Cramer told his Mad Money viewers Thursday, and in a world where small businesses are getting wiped out by COVID-19 restrictions, big businesses are roaring. Cramer said today's strong non-farm payroll numbers had a little something for everyone, and his game plan for next week does, too.
The week will begin on Monday with the markets digesting the latest COVID-19 numbers, but it won't matter to Wall Street as investors toggle at will between the stay-at-home stocks and the recovery stocks.
On Tuesday, we'll get earnings from small business payroll processor Paychex (PAYX) - Get Report and Cramer said it's possible the company is doing better than expected as the economy bounces back. We'll also hear from another Cramer fav, Levi's (LEVI) - Get Report, which is moving hard into direct-to-consumer sales.
Thursday will see earnings from Walgreens Boots Alliance (WBA) - Get Report, the drugstore chain that continues to struggle against Amazon (AMZN) - Get Report. Finally, on Friday, we'll get another read on the economy with the latest producer price index, which might also show a stronger-than-expected recovery.
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Executive Decision: Apeel Sciences
In his first "Executive Decision" segment, Cramer welcomed back James Rogers, founder and CEO of the privately held Apeel Sciences, the California-based company that uses food to preserve food, helping to make our nation's food supply fresher and last longer.
Rogers explained that food waste is an invisible tax on our food system, one that costs the U.S. over $2.6 trillion annually. Apeel's technology uses food waste to create food coatings for products like lemons, limes, oranges, apples and avocados that help these products last longer on store shelves. The company has offices around the globe supporting food suppliers and has partnered with grocers like Kroger (KR) - Get Report.
Rogers noted that COVID-19 has revealed the fragility of our food supply. He said it doesn't take much, just a few changing habits or labor shortages, to disrupt it. That's why technologies like Apeel are crucial for supporting people and our planet.
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When to Count Your Blessings and Sell
Don't turn big profits into big losses, Cramer told viewers. When you've got big gains in a speculative stock, count your blessings and sell. Cramer said it's time to ring the register on two early-stage biotechs, Novovax (NVAX) - Get Report and Inovio Pharmaceuticals (INO) - Get Report, two companies working on a COVID-19 vaccine.
The problem with vaccines is they don't make a lot of money, Cramer reminded viewers, and with just about every pharmaceutical company working on COVID-19, there are bound to be some big losers in this race for a cure. Shares of Novovax are up 1,951% for the year, with Inovio up 550% so far in 2020. Cramer said those are gains worth cashing in.
Novovax is not a young company and it hasn't had a successful new vaccine in years. Inovio is working on many different vaccines, but has been riddled with setbacks and delays. Cramer said while he liked both companies at lower levels, the boom-and-bust cycles of vaccines will soon come to an end and you don't want to be in a momentum stock when it loses its momentum.
Accelerating the Digital Transformation
The cloud, technology and cybersecurity stocks continue to surge and this week we learned why, Cramer told viewers, because Accenture (ACN) - Get Report gave us an update on exactly what's happening in the enterprise technology world.
When Accenture reported their earnings, they confirmed everything we had already suspected, that the pandemic has forced companies to accelerate their digital transformation plans and migrate to the cloud even faster than before. Cramer said we could be seeing three to five years of change happening in just a few months' time.
Accenture saw strength across the board, including in travel, retail, energy, aerospace and the industrials, all of which are adapting to our new stay-at-home economy. The company called the past few months the biggest change in human behavior they've ever seen, forever changing how companies engage with their customers and employees.
Invest for the Long Term
In his "No-Huddle Offense" segment, Cramer pleaded with viewers to cash in on those gains they've made with speculative penny stocks and start doing some real investing for the long term. Speculative stocks don't rise forever, he said, and now's the time to sell.
What should investors do with their gains? Cramer suggested the first $10,000 be put into a low-cost S&P 500 index fund which will serve as the core of your new portfolio. After that, he advises investing in high-quality companies like Amazon, Tesla (TSLA) - Get Report and Shopify (SHOP) - Get Report using the fractional shares that are now offered at many online brokers. Fractional shares let you invest any amount you can and you can do it regularly, every week even, to maximize your gains.
Investing in big stocks may not be as exciting as penny stocks, Cramer concluded, but over the long run, it will be a lot more profitable.
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:
Starbucks SBUX: "Everyone hates Starbucks but the drive-thrus are good."
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At the time of publication, Cramer's Action Alerts PLUS had a position in AMZN, SBUX.