The market is betting that crude oil will keep heading higher, forcing the Federal Reserve to take action, Jim Cramer told his Mad Money viewers.
Despite last week's pullback, the front month contract for West Texas Intermediate is up more than 12% since the end of May.
"There's nothing wrong with the market being led by oil, as long as the rest of the industrials are following closely behind. In this case, oil stands alone and is moving higher not because of rising demand, but because of lower supply," Jim Cramer told his Mad Money viewers.
Many oil wells were shut in as the economy slowed during the pandemic and still have yet to return. As prices continue to rise, production will eventually return to normal levels, Cramer said, making the current rise in crude prices temporary.
Cramer said he's still a fan of oil, however, recommending stocks like Chevron (CVX) - Get Report, Pioneer Natural Resources (PXD) - Get Report and most recently, Exxon Mobil (XOM) - Get Report, after the company's recent board changes.
Cramer also says tech is back. From the FAANG stocks to Microsoft and Advanced Micro Devices, he says, "let me tell you what drives these insane moves out of industrials and banks in a way that you can understand them and even profit from them." Check out his insights and more over on Real Money.
Here are the top 5 videos this past week:
Twilio Will Do Well if Inflation Is Peaking
"I think Twilio is a stock that can do well," Cramer says. "The junior growth stocks tend to do well if you believe inflation is peaking and the cyclical stocks do well if you think inflation is going to rage. I am of the camp that inflation is transitory."
"Clean up in aisle seven!" Cramer wrote on Real Money. "When you hear that in a supermarket, you have to brace yourself for the mess if you need something in seven. Or, it means nothing at all to you, because you are not in that aisle and don't want to go there... And so it goes with the stock market, which has a series of aisles -- some of which need cleanup badly, namely the industrials and the financials, and some of which have high demand and it's tough to keep the merchandise on the shelves," he continued.
MicroStrategy Has Become a Binary Play on Bitcoin
MicroStrategy (MSTR) - Get Report is eyeing plans to sell up to $1 billion in stock to scoop up more of the digital currency. The company filed a "shelf" registration with the Securities and Exchange Commission to sell as much as $1 billion in common stock for general purposes, which includes -- per the company -- the purchase of more Bitcoin.
When asked about a company buying Bitcoin now, Cramer says that he thinks it's irresponsible."MicroStrategy has just become a play on Bitcoin so if you want to play it, go ahead. To me, I think they've become a binary play on Bitcoin... I believe Bitcoin should be 5% of your portfolio and I think gold should be 5%... I've replaced half of my gold with Bitcoin. That's the suggested allocation we've been making and I'm sticking by that," Cramer said.
Corsair: Buy, Sell or Hold?
Last month, Corsair posted first-quarter earnings of $80 million on revenue of $529 million thanks to surging growth in its gaming and peripherals business.
Cramer likes the company but does warn investors that--aside from GameStop and AMC--other stocks haven't been able to hit that momentum. "Corsair is a great company and I love it...what the memesters have not been able to demonstrate is any staying power away from Gamestop (GME) - Get Report and AMC (AMC) - Get Report," he said.
Cramer Says Chewy Stock Is a Buy Post-Earnings
Cramer thinks Chewy (CHWY) - Get Report is a buying opportunity. "They have a [subscription growth] number that was not what some people wanted, the company is also faced with about $40 million of supply shortages -- which is a high-quality problem...it's demand shortage that you don't want -- and it was not a perfect quarter. But, what I look at when it comes to Chewy is whether each year the Chewy subscriber uses more product, and the answer is: yes, dramatically. That's continuing and the lifetime value is extraordinary," he said.
For an "Executive Decision" segment on Mad Money recently, Cramer spoke with Sumit Singh, CEO of Chewy, the online pet emporium that's seen its shares fall 12% as investors flock to the economic reopening stocks instead. Singh said the increase in pet adoption is not just a pandemic event. Chewy works with over 6,000 pet shelters across the nation that report adoptions are still growing by double digits.
When asked about their continued success, Singh noted that 69% of Chewy's volume stems from their auto-ship subscription programs.
Cramer: Why Big Banks Struggle to Follow in Fintech's Footsteps
"In his "Cramer's Playbook" segment, Cramer said he's always been a big fan of fintech, but he recently got another big reason why. Jamie Dimon, CEO of JPMorgan Chase (JPM) - Get Report, was recently asked why his bank is struggling to compete with upstarts like Square (SQ) - Get Report. Dimon's answer was simply that JPMorgan "didn't have the imagination" to think up offering loans to small businesses based on their daily receipt volumes."
Dimon added that companies like Square also don't have the legacy systems that weigh down big banks like JPMorgan nor do they have to swim the sea of regulatory requirements. But Dimon's first answer, the failure of imagination, is what caught Cramer's attention. JPMorgan didn't see what their customers needed, but American Express (AXP) - Get Report did when it acquired Cabbage, which offers similar cashflow services.
"I think he [Dimon] has tremendous fintech envy... they're [JPMorgan] in a regulatory web, they have many different organizations that regulate them, and that's not what Square has. Square can do whatever it wants because it's a tech company...what the real issue is here is that he didn't listen to the customer." Cramer said.
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