After intense selling this week, next week might usher in some buying, Jim Cramer told his Mad Money viewers Friday, as he laid out his game plan for next week's action.
It all starts on Monday with earnings from Bank of America (BAC - Get Report) and trucking company, J.B. Hunt (JBHT - Get Report) . Cramer said Bank of America is cheap, but could go lower, while J.B. Hunt should shed some light on the shortage of truck drivers.
Tuesday is a huge day for earnings, starting with UnitedHealth Group (UNH - Get Report) and Johnson & Johnson (JNJ - Get Report) . Cramer endorsed buying these two best-of-breed names. He was also bullish on United Continental (UAL - Get Report) and Netflix (NFLX - Get Report) . He was less bullish on Lam Research (LRCX - Get Report) and said to be careful with CSX (CSX - Get Report) .
Finally on Friday, we end the week with Honeywell (HON - Get Report) and Schlumberger (SLB - Get Report) , two Action Alerts PLUS stocks that represent the best and worst of that portfolio respectively. Cramer was also a fan of Procter & Gamble (PG - Get Report) now that activist Nelson Peltz is on board, and apparel maker VF Corp (VFC - Get Report) .
Cramer and the AAP team take a close look at Citigroup's (C - Get Report) third-quarter earnings. 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.
It's the Forecasts
As we kickoff another earnings season, don't forget that it's the forecasts, not the earnings, that control stock prices, Cramer told viewers. That's why the Federal Reserve's comments have been so damaging to the markets.
Cramer said he's fine with the Fed raising rates again in December by a quarter point, but after that, he'd like to see the Fed take a data-driven approach and not automatically commit to three additional hikes in 2019 before the year even begins. With the economy already starting to soften, three more rate hikes will spell trouble for earnings and will hurt a lot of stocks.
Let's not forget that short-term rates increase what businesses have to spend to borrow money to grow. Increasing rates from 2.25% to 3.25% in a year will have an impact. Once earnings estimates start coming down, stocks will follow.
Cramer said the big mistake the Fed made in 2011 was not doing their homework, something they unfortunately look likely to repeat again.
Over on Real Money, Cramer says there's hardly a company on earth that can raise its forecast, given what the Fed is doing. Get more of his insights with a free trial subscription to Real Money.
Scorecard: Bank Earnings
The first round of bank earnings are in and Cramer's got the scorecard for how Citigroup (C - Get Report) , JPMorgan Chase (JPM - Get Report) , Wells Fargo (WFC - Get Report) and PNC Financial (PNC - Get Report) fared this quarter.
Overall, Cramer said, they were not as good as we'd hoped, but not as bad as we'd feared, either. Citigroup saw 4% loan growth with strength in its investment banking division. The company also bought back 75 million shares of stock and trades at just 1.1 times its book value.
JPMorgan has a great quarter and was hugely profitable, but comments from CEO Jamie Dimon, citing a number of challenges in the global economy, gave investors pause.
Cramer was bullish on Wells Fargo as well, as this company is simply too cheap to ignore.
The same could not be said for PNC however, as this bank struggled with competition from non-bank lenders. Cramer said all of the regional banks are struggling, which is why he's less optimistic on the U.S. economy than he was just a week ago.
Executive Decision: Okta
McKinnon said Okta is seeing three secular tailwinds pushing in their favor. He said more companies are digitizing their operations, embracing the cloud and paying more attention to security issues. Okta now works with over 5,000 customers, helping them know who's logging into their systems, and from where, to help ensure that networks are as rock-solid as possible.
Okta counts Major League Baseball as one of their customers, and helps to provide an easy-to-use login experience that's also secure on any device.
When asked about their negative operating margins, McKinnon explained that Okta is still in growth mode, investing heavily for the future.
Executive Decision: Canopy Growth Corp.
For his second "Executive Decision" segment, Cramer checked in with Bruce Linton, chairman and co-CEO of Canopy Growth Corp. (CGC - Get Report) , the Canadian Cannabis provider, a week before Canada is set to legalize recreational marijuana. Shares of Canopy are up 68% over the past three months.
Linton said that while Oct. 17 will be an important day for their industry, what's more important is what happens after that day. Other countries will be watching Canada, he said, and we'll see what that means for legalization and medical use in other countries.
Linton added that the cannabis industry has the ability to disrupt alcohol, cigarettes and several pain pharmaceuticals, which could total a $500 billion market opportunity.
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