The stock market is behaving anything but random right now, Jim Cramer told his Mad Money viewers Thursday. The buyers are swooping in and buying the dips, and they're right to be doing so. We've seen a remarkable bounce since last Friday's coronavirus-related selloff, Cramer said, and there are plenty of reasons for this rally.
First, we need to remember that most investors invest using index funds, putting their money in the S&P 500 and leaving it there. That means there's a steady stream of new money helping to create a floor in the market.
Second, public health scares like the coronavirus are a poor reason to sell. Outside of a handful of companies, like hotels and travel, and a few which are seeing real disruption, like Apple (AAPL) - Get Apple Inc. Report, Nike (NKE) - Get NIKE, Inc. Class B Report and Starbucks (SBUX) - Get Starbucks Corporation Report, most companies simply won't be affected by this outbreak. Those that are affected, like the ones just mentioned, have strong balance sheets that can weather this storm.
Third, where else are people going to put their money? Bonds and Treasuries still pay next to nothing, leaving stocks as the only game in town.
Finally, Cramer said the markets are rallying because President Trump is paying attention to the stock market. As he mentioned on Wednesday's show, love him or hate him, Trump has helped create an environment of growth, low interest rates and strong employment.
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Executive Decision: Cigna
For his "Executive Decision" segment, Cramer welcomed back David Cordani, president and CEO of Cigna (CI) - Get Cigna Corporation Report, to the show to talk about his company's business and outlook. Shares of Cigna rose 2.6% Thursday on the company's strong quarterly results, but still trade for just 10 times earnings.
Cordani said Cigna is privileged to have over 170 million customer relationships around the globe. Their mission is to help each and every customer with their health, wellbeing and peace of mind. Cigna finished the year strong, Cordani said, and is forecasting 10% revenue growth in 2020 with 13% to 16% growth in their Medicare business.
When asked how Cigna approaches covering new drugs and treatments, Cordani explained they have an independent panel of physicians that evaluates new drugs and makes recommendations for inclusion or exclusion in coverage.
Turning to the topic of the coronavirus, Cordani said that Cigna's first goal is the health and safety of their people and patients. They work closely with global health organizations and provide whatever services they can to help patients an contain the outbreak.
Finally, when asked about the possibility of a single-payer healthcare system in America, Cordani said what Americans want is access to affordable, high-quality care and they want choices like Medicare and individual exchanges.
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Executive Decision: McCormick
Kurzuis started off by saying that it's been two and a half years since they acquired Frank's hot sauce and French's mustard and in that time, they've delivered an 80% return to shareholders. He said younger consumers like spicy products and Frank's was just the beginning. McCormick recently introduced Old Bay hot sauce online and the product sold out in just 30 minutes.
Kurzuis added that McCormick is committed to be the No. 1 hot sauce maker in the world. With the addition of Frank's, they are currently No. 2, but they still have plans.
When asked about the company's increased spending on technology, Kurzuis explained that McCormick runs on a system that was built in 2002 when the company was much smaller. They need modern technology to deal with their larger scale and the modern world, so it's the right investment to make.
What We Don't Know
Take everything you hear about the coronavirus with a grain of salt, Cramer cautioned viewers. The simple truth is when it comes to this outbreak, we simply don't know.
Cramer said investors need to stop speculating on miracle cures and just-in-time vaccines. They also shouldn't trust any updates on how many cases are being reported. Are we really to believe there are only 12 confirmed cases in the U.S., when there were 20 on a single cruise ship in Japan? Can we really trust the numbers the Chinese are providing?
Perhaps the most honest outlook on the coronavirus came from Yum China (YUMC) - Get Yum China Holdings, Inc. Report, which described serious disruptions in their business and the Chinese economy overall. The company said it is seeing strains on their entire system, not just the stores that are shuttered.
It's Not Easy Being Green
In his "No Huddle Offense" segment, Cramer said there's a sea change underway when it comes to the environment. Money managers are increasingly pressuring companies to go green.
Case in point: Elliott Management taking a stake in Evergy (EVRG) - Get Evergy, Inc. Report and telling the company they should stop buying back shares and instead invest in more renewable energy. Activist investors love stock buybacks, Cramer said, so for Elliott to propose the opposite is telling.
But Elliott's stance isn't altogether altruistic. Since 2018, Evergy has returned 21.6% versus the industry at 30.5%. The truth is, renewable energy saves money, bolsters the bottom line and makes Evergy more attractive to potential acquirers.
Investing in the environment isn't only just the right thing to do, it's also the profitable thing to do, Cramer concluded, and money managers are starting to take notice.
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:
Nucor NUE: "I don't prefer steel companies, but if you like them, that's the one to own."
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At the time of publication, Cramer's Action Alerts PLUS had a position in AAPL, SBUX, CLX.