A divided government is nirvana for the stock market, Jim Cramer reminded his Mad Money viewers Wednesday. That's exactly what we got from Election Day, and it's great news for the growth stocks.
It was just last week that money managers rotated out of growth stocks like technology and into value names like the industrials. But Wednesday, that rotation reversed, with shares of Caterpillar (CAT) - Get Report falling 7.3% and big tech names like Amazon (AMZN) - Get Report and Microsoft (MSFT) - Get Report rising 6.3% and 4.8%. Semiconductor maker Qualcomm (QCOM) - Get Report rallied 12.6% by the close.
Why do investors love a divided government? Cramer said it's because we could have two more years of the status quo. It means it will be far less likely that Congress regulates big tech names like Facebook (FB) - Get Report. It means that drug makers can breathe easier. And it means the surge in housing and autos is likely to continue.
It doesn't matter who ultimately wins the White House, Cramer concluded. At the end of the day, it's a win for stocks. And now that the election is over, it's a win for anyone who bought into last week's selloff.
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Healthcare: Buy Low, Sell High
One of the most reliable trades in the business is selling healthcare right before an election, Cramer told viewers. Also a reliable trade? Buying into that selloff and making a fortune.
Cramer said inevitably, the drugmakers and health insurers become public enemy No. 1 during election season. But just like this year, those fears end up being overblown and buying into the healthcare slump is a winning trade.
That winning trade was on display today with shares of UnitedHealth Group (UNH) - Get Report surging 10.3% and rival Cigna (CI) - Get Report soaring 14.5%. That's a year's worth of gains in a single day. Cramer said these gains will continue as the analysts have yet to upgrade the group now that the fears have subsided.
Executive Decision: Akamai Technologies
In his first "Executive Decision" segment, Cramer welcomed back Dr. Tom Leighton, founder and CEO of Akamai Technologies (AKAM) - Get Report, the network services provider that saw its shares pop 3.8% Wednesday after the company reported strong earnings with revenues up 12%.
Leighton said that Akamai was paying very close attention to the election traffic Tuesday night. The major news sites saw a five-fold increase in traffic that peaked around midnight Eastern. The 2020 election beat out the 2016 election, which was itself a record for Akamai as well.
When asked about that growth, Leighton said news apps are becoming better than watching TV because consumers can customize their experience and see exactly the content that matters most to them. The coming 5G wireless revolution will only make that experience even better, he said.
Akamai was also active protecting the election. Leighton noted that his company stopped over 100 million attempts to access news and election websites throughout the evening.
Executive Decision: Canopy Growth
Klein explained that there was momentum for cannabis this election cycle, with several states legalizing cannabis. Those states included New Jersey, Arizona, Montana and South Dakota. Klein said that when one state allows cannabis, its neighbors feel the impact and become more likely to follow suit, which allows for the gradual acceptance.
When asked about their total addressable market, Klein placed the industry around $70 billion. But, he said, the beer category is $110 billion and it's reasonable to assume that cannabis-infused beverages will pull in some of that market. He said beverages and edibles are an exciting opportunity as legalization progresses.
Cramer said Klein has done a remarkable job turning around Canopy Growth and the company is now once again an "investable situation."
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Lots of Winners in This Race
In his No-Huddle Offense segment, Cramer said while we might not know who won the White House for a few more days, this election had lots of other winners. Tuesday night was a big win for cannabis, sports betting and ride sharing.
In all, five states had cannabis on the ballot last night. Cramer said that's great news for Grow Generation (GRWG) - Get Report and Innovative Industrial Properties (IIPR) - Get Report, the REIT with a 3.5% yield.
Sports betting was on the ballot in three states, Maryland, Louisiana and South Dakota. Cramer said the winners here are Penn National Gaming (PENN) - Get Report, MGM Resorts (MGM) - Get Report, which owns a casino in Maryland, and DraftKings (DKNG) - Get Report.
Riding sharing was also a big winner, after California voted that Lyft (LYFT) - Get Report and Uber (UBER) - Get Report can continue classifying their drivers as independent contractors, albeit with a few additional protections. Cramer said this was a big win for the gig economy and also a warning to other states not to interfere with progress.
Here's what Jim Cramer had to say about some of the stocks that callers offered up during the Mad Money Lightning Round Wednesday evening:
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At the time of publication, Cramer's Action Alerts PLUS had a position in FB, AMZN, MSFT, GOOGL.