New Market: Cramer's 'Mad Money' Recap (Thursday 5/28/20)

Jim Cramer says there are good reasons for this reopening rally, and support from the Fed and Treasury. But job losses are a worry.
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It's a new market and a new economy, Jim Cramer told his Mad Money viewers Thursday, but once the government stimulus checks run out, Wall Street is likely to lose its momentum. That's because over the past 10 weeks, over 40 million people have lost their jobs. That's a quarter of our workforce.

Cramer said Wall Street has become completely disconnected from Main Street, primarily for four reasons. First, there's a new cohort of buyers now that bankruptcies have largely been taken off the table by the Federal Reserve. Investors have also been buoyed by stimulus checks which have been flowing into companies like AutoZone  (AZO) - Get Report, Burlington Stores  (BURL) - Get Report and Dollar General  (DG) - Get Report.

But mostly, investors have been responding to the reopening of our economy and the hopes for a vaccine that could be produced in record time. Even JPMorgan Chase's  (JPM) - Get Report Jamie Dimon has speculated on the possibility of a quick, V-shaped recovery.

Cramer said he's not completely convinced that a quick recovery is in the cards. Unemployment still rules the day, he said, and once those stimulus checks run out, small businesses and consumers alike will be filing for bankruptcy faster than they've been applying for emergency loans.

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Be Wary of 'Recovery Stocks'

Resist the urge to chase the cyclical stocks as they roar higher, Cramer cautioned viewers. Our real enemy is not COVID-19, it's rampant unemployment.

Cramer said he's more positive on our recovery than he was just a few weeks ago, but it would be a mistake to go all-in on the recovery stocks. Everyone is buying the banks, entertainment and retail, he said, but your portfolio needs to be balanced with some recession stocks as well. It's unlikely that 40 million people will be back to work overnight, which is why you cannot chase these hot momentum stocks higher. By the time you get in, the trade will already be over.

Executive Decision: Salesforce.com

For his second "Executive Decision" segment, Cramer also spoke with Marc Benioff, CEO of Salesforce.com  (CRM) - Get Report, which reported a weaker-than-expected quarter with disappointing guidance that sent shares lower by 3.9%.

Benioff said there were a lot of unknowns going into this quarter. He said any company that was able to successfully navigate these past 90 days will certainly do well over the next 90 days. Salesforce took on many new initiatives this quarter, including distributing 60 million pieces of personal protective equipment and providing commission guarantees for their sales staff.

Benioff said it's time to start reopening the economy, but only if we can do it safely. That's why Salesforce has partnered with many great companies to offer Work.com as a resource for companies to plan putting people back to work. He said information technology is a great tool in the fight against the coronavirus and can help with preparedness, testing and contact tracing.

When asked about their business, Benioff touted AT&T Wireless  (T) - Get Report as a big win for his company this quarter. He said AT&T will be using Salesforce to make sure that no matter how customers choose to interact with the company, whether it's on their phone, online or in store, AT&T representatives will have all of the information on who they are talking to. Salesforce continues to take market share, Benioff said, because they're the only ones who can offer the complete customer picture.

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Executive Decision: PayPal

In his first "Executive Decision" segment, Cramer spoke with Dan Schulman, president and CEO of PayPal  (PYPL) - Get Report, the payment processor which has seen their average daily usage surge 20% as consumers are forced to transact business online.

Schulman said PayPal's services could not be more important or relevant in this crisis. He said the transition from physical to digital has accelerated for everything from education and entertainment to medicine. Retail is also fundamentally changing. Finally, he said the rise of digital payments and contactless payments has accelerated by at least two to five years from its pre-COVID levels.

PayPal added 7.4 million new active customers last month alone and Schulman said they are on target for between 15 million and 20 million new customers for the quarter.

Schulman was also upbeat about their recent acquisition of Honey, a mobile app that helps consumers find coupons and earn rewards for everyday items and services. He said over 185 million adults struggle with money at the end of every month and finding the best price is important.

Finally, when asked about digital payments, Schulman said PayPal has a great relationship with Apple  (AAPL) - Get Report, even though they are competitors in the payments space. He said PayPal's QR code payments system is simple and ubiquitous and now available in 28 countries. He said the NFC technology used by Apple needs compatible hardware from the merchant.

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Executive Decision: Zebra Technologies

For his final "Executive Decision" segment, Cramer checked in Anders Gustafsson, CEO of Zebra Technologies  (ZBRA) - Get Report, the scanning and logistics technologies company.

Gustafsson said Zebra has been very active throughout the COVID-19 pandemic, helping pop-up hospitals and drive-up testing facilities keep track of essential supplies and specimens. Zebra helps dramatically reduce error rates with its superior scanning and tracking technologies.

In addition to a big win with the U.S. Postal Service, Zebra is also growing its retail business. Gustafsson said that as more retailers move towards omnichannel operations, they need better technologies to pick, pack, ship and deliver all of those new online and offline orders.

Finally, when asked about their supply chain, Gustafsson said Zebra has moved about half of its supply chain outside of China and continues to diversify its operations. Their sales in China are still fairly small, around 5% of revenues. Gustafsson did not expect any disruptions from continued trade tensions between the U.S. and China.

Lightning Round

Here's what Jim Cramer had to say about some of the stocks that callers offered up during the Mad Money Lightning Round Thursday evening:

Teva Pharmaceuticals  (TEVA) - Get Report: "No, that's a generic drug maker. You want Merck  (MRK) - Get Report or Bristol-Myers Squibb  (BMY) - Get Report."

Oxford Industries  (OXM) - Get Report: "If you like apparel, you need to buy PVH Corp  (PVH) - Get Report."

Amgen  (AMGN) - Get Report: "I like Amgen a lot. It has a great oncology program."

Intel  (INTC) - Get Report: "I'm a buyer of Advanced Micro Devices  (AMD) - Get Report."

General Electric  (GE) - Get Report: "I think they're doing a fantastic job, but it's going to take time."

Spartan Nash  (SPTN) - Get Report: "I like that a lot more than Aramark  (ARMK) - Get Report. I think you have a good one. "

Ingevity  (NGVT) - Get Report: "I want you to sell half tomorrow morning."

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At the time of publication, Cramer's Action Alerts PLUS had a position in AAPL, JPM.