The true test of a first-rate market is its ability to hold two opposing rallies at the same time. That was Jim Cramer's take on the current state of the stock market, as he told his Mad Money viewers Thursday that this market is producing the most unlikely of rallies, and its animal spirits are roaring.
For example, everyone knows that oil and airlines don't mix. Fuel is the airlines' biggest expense, so when oil is rallying, the airlines are hurting. But that's not true in this market, where Delta Air Lines (DAL) - Get Report shot up 4.7%, sending the rest of the group along with it. At the same time, Chevron (CVX) - Get Report popped 3% on its strong earnings, sparking a rally in Apache (APA) - Get Report , Anadarko Petroleum (APC) - Get Report , Pioneer Natural Resources (PXD) - Get Report and many others.
The bears are still proclaiming that the next quarter-point interest-rate hike will destroy the economy, yet the homebuilders, one of the most interest rate sensitive groups, were soaring.
Finally, there's Netflix (NFLX) - Get Report , up 2.2%, at the same time as Discovery Communications (DISCA) - Get Report and Viacom (VIAB) - Get Report -- the two companies that Netflix is supposedly destroying.
Cramer and the AAP team say Activision's (ATVI) - Get Report Overwatch eSports League is off to an impressive start. 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
Executive Decision: Denny's
For his "Executive Decision" segment, Cramer sat down with John Miller, president and CEO of the value-oriented diner chain, Denny's (DENN) - Get Report , which has 1,700 locations nationwide. Denny's just posted strong results that included a 2.2% rise in same-store sales.
Miller said Denny's is loved by millennials, especially with their Denny's On-Demand service which allows for online ordering and delivery. Much to his surprise, the most delivered items were not Grand Slam breakfasts, but rather burgers and milkshakes.
Among Denny's growth initiatives is the re-imaging of their locations to include a warmer feel that's less like a cafeteria and more like a restaurant, Miller said. Currently 67% of their system has been converted to the new look with great success.
Denny's also remains committed their shareholders, with increased share repurchases, and their franchisees and employees, where the chain is known for taking good care of their people. Denny's has plans to keep expanding their footprint, including in college campuses and areas like New York City.
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Bank Earnings: What to Focus on
Earnings season officially begins when the bank stocks start reporting this week and investors should expect a ton of one-time charges, Cramer told viewers, but that won't be what's most important.
Cramer explained that the earnings of JPMorgan Chase (JPM) - Get Report , Wells Fargo (WFC) - Get Report and PNC Financial (PNC) - Get Report will be ugly this quarter, because banks typically carry unrecognized losses to offset their gains. With tax rates falling from 35% to 21% starting in 2018, banks will be encouraged to use their losses now.
Cramer said he also expects trading volumes to be down this quarter. But he's not worried, because retail sales were strong, indicating that the consumer is still alive and well.
Investors should be focused on three things, Cramer said, the net interest margins, loan growth and buybacks and dividends.
Bank of America (BAC) - Get Report and the regional banks have the most to gain from interest rates. Loan growth will have likely slowed for all banks this quarter, so be prepared. As for dividends and buybacks, Cramer said he expects lower taxes and loosening regulations to cause a big boost in both.
Off the Tape: Away
In his "Off The Tape" segment, Cramer sat down with Steph Korey, co-founder and CEO of the privately-held Away, the luggage maker with a direct-to-consumer model.
Korey explained that Away was born out of necessity, as all other luggage makers were simply making luggage, but Away wanted to make products that supported the way people travel. She said all of Away's items allow travelers to fit more inside, while remaining ultra-light, and offer features like the ability to charge up your devices at your next layover.
Away even offers specialty colors, like Millennial Pink, which sold out in record time and had a wait list of 20,000 before becoming a permanent offering.
Korey said Away advertises primarily on social media, and travel fits in perfectly with services like Instagram.
In the Lightning Round, Cramer was bullish on Floor & Decor (FND) - Get Report , Regeneron Pharmaceuticals (REGN) - Get Report , Universal Display (OLED) - Get Report , ZAGG (ZAGG) - Get Report , Chegg (CHGG) - Get Report , Core Labs (CLB) - Get Report , Schlumberger (SLB) - Get Report , Cedar Fair (FUN) - Get Report , First Solar (FSLR) - Get Report and Newmark Group (NMRK) - Get Report .
In his "No-Huddle Offense" segment, Cramer pondered the return of retail, given the 5% bump in same-store sales at Kohl's (KSS) - Get Report and the 5.8% rise at Children's Place (PLCE) - Get Report , just to name a few. Has something changed?
After talking to many retail execs this week, Cramer said there's a much more positive backdrop. Retailers are seeing millennials forming new households, online strategies are beginning to take hold and loyalty programs are working. The surviving retailers are enjoying these spoils and more, he said, which makes retail investable, but only on weakness given their recent monster run.
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At the time of publication, Cramer's Action Alerts PLUS had a position in ATVI, APA, JPM.