Don't be fooled by today's record-setting rally, Jim Cramer cautioned his Mad Money viewers Monday. Until we see a peak in unemployment, the stock market will be held hostage by the whims of exchange-traded funds, Cramer said, and even strong rallies like today aren't likely to translate into earnings per share.
Traders will continue to buy and sell based on the headlines of the day, Cramer said, but investors need to stay focused on what matters -- the state of our economy. He said it would be a mistake to buy stocks after Monday's strong move, even with your 401(k) or retirement money. Today's gains are likely to vaporize on the next wave of bad news -- and that might be the time to pounce.
The rally in the cloud kings, a Cramer favorite, must be considered suspect and be evaluated on a case-by-case basis. Cramer preferred the data center hardware stocks, like Western Digital (WDC) - Get Report, as an alternate investment. He also blessed owning Amazon (AMZN) - Get Report, which doesn't have the advertising risk of Google (GOOGL) - Get Report. Even Apple (AAPL) - Get Report must be bought opportunistically, on a pullback.
As for sectors outside of tech, Cramer said there's little to like in retail, even with home improvement stores like Home Depot (HD) - Get Report and Lowe's (LOW) - Get Report, which may miss the entire spring gardening season. He was bearish on the banks, the homebuilders and the industrials as well, given the level of uncertainty we still see in the economy. That uncertainty especially extends to oil and gas stocks, given that we're almost out of places to store our excess oil.
Cramer said he'll be more bullish when we have more Covid-19 testing and less fear of getting sick, but it will be a peak in unemployment that will truly signal when the bull is back.
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Executive Decision: Zoom
For his first "Executive Decision" segment, Cramer spoke with Eric Yuan, founder and CEO of Zoom Video Communications (ZM) - Get Report, the online meetings provider that's come under scrutiny for its security practices.
Yuan said over the past few weeks, Zoom has experienced a surge in new users and new use cases. The company is working hard to educate these new users about their security settings so that everyone can use their service securely. They are working particularly hard with school systems around the nation so that they can continue to use Zoom for online education.
When asked about end-to-end encryption, something security researchers have called out as missing from the Zoom platform, Yuan noted with end-to-end encryption enabled, many popular features, like calling into meetings via phone and cloud recording, would not be available.
Yuan responded to criticisms that Zoom meetings are routed through Chinese servers by saying that only in rare cases should meeting traffic route through China. He also said that the "Zoom bombing" trend of uninvited guests logging into meetings can be thwarted by applying best practices.
Yuan will be holding a webinar later this week to discuss best practices and all of the issues raised by security professionals.
The stay-at-home economy may seem temporary, Cramer told viewers, but working from home has so many advantages that it could be here to stay. That means a whole new crop of stay-at-home stocks could be poised to rally for years to come.
Cramer said investors already know about Zoom Video and Amazon's Web Services, but they might not know about all of the food stocks that are also working. Cramer reiterated his buy on Constellation Brands (STZ) - Get Report, the beer and wine giant with shares up 19% over the past two weeks, and on ConAgra Foods (CAG) - Get Report, which continues to see its products flying off grocery store shelves.
But there are others in the stay-at-home food space. Cramer added General Mills (GIS) - Get Report to the list, along with Hormel Foods (HRL) - Get Report. He said Chewy (CHWY) - Get Report is the logical choice in the pet food space and no one does snack foods better than PepsiCo (PEP) - Get Report, which owns Frito-Lay.
When it comes to delivery, Domino's Pizza (DPZ) - Get Report has a lot to gain, Cramer noted, and for take-out, no one beats Chipotle Mexican Grill (CMG) - Get Report, which has been beefing up its online prowess for years.
REITs Worth a Look
Investors looking for relatively safe stocks that can work even in this difficult environment can selectively consider a REIT, Cramer told viewers. While the REITs have become one of the most hated sectors and are largely untouchable, Cramer identified a handful that are worth considering.
Office REITs remain untouchable, Cramer said, but Alexandria Real Estate Equities (ARE) - Get Report is different. This company focused exclusively on campuses for science and technology. When pharma and biotech need a campus, Alexandria is where they look. Shares are down 22% from their high.
Next, Cramer recommended Crown Castle (CCI) - Get Report, the cell tower REIT with a 3.2% yield. Cramer said he also still likes T-Mobile (TMUS) - Get Report and Verizon (VZ) - Get Report ahead of the 5G Wireless buildout.
Finally, Cramer said data centers are a secular growth trend and here he likes Digital Realty Trust (DLR) - Get Report with its 3.2% yield, Equinox (EQIX) - Get Report and CoreSite Realty (COR) - Get Report with its 4.2% yield.
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We can do More
In his "No-Huddle Offense" segment, Cramer said when it comes to the coronavirus, our government needs to be more open-minded. It's not enough to just tell Americans to stay at home, he said -- there is a lot more we could be doing.
Cramer reminded viewers that when our nation was battling polio, millions of Americans mailed in their dimes, creating the March of Dimes, and ultimately funding a cure. Our Treasury could offer $1 trillion in "Safe and Sound" bonds to help America rebuild our medical supply industry and keep us safe during crises like these.
We could also task OSHA, the Occupational Safety and Health Administration, to help mandate workers wear masks at work and get their temperatures regularly checked to make sure they're not sick.
Cramer also suggested trying a moratorium on rents and mortgages to help put money into the pockets of Americans who need it most.
Here's what Jim Cramer had to say about some of the stocks that callers offered up during the Mad Money Lightning Round Monday evening:
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At the time of publication, Cramer's Action Alerts PLUS had a position in AMZN, AAPL, GOOGL, PEP.