We're seeing in the markets now a collapse of epic proportions, Jim Cramer told his Mad Money viewers Thursday. Between the coronavirus outbreak and a price war for crude oil, these are indeed scary times. People are worried about their health, their families, their jobs and their nest eggs.
"I know we can beat this thing," Cramer reassured viewers, but we need to turn to the crisis playbook and stick with stocks that have accidentally high dividend yields. Don't buy all at once, he said, always leave room for prices to go lower.
As for what to buy, Cramer said he likes UPS now that long-time Home Depot (HD) - Get Report executive Carol Tome is taking the steering wheel at UPS. UPS currently yields 4.7%. Cramer was also a fan of AbbVie (ABBV) - Get Report, which is merging with Allergan (AGN) - Get Report and has a 6% yield.
Cramer reiterated his buy on Verizon (VZ) - Get Report, saying that he likes the telco more than AT&T (T) - Get Report, which has a more complicated story. In the banking sector, Wells Fargo (WFC) - Get Report is a great value with a new CEO and a 7.5% yield.
Cramer and the AAP team are looking at everything from earnings and tariffs to the Federal Reserve. 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.
Sen. Elizabeth Warren on What the U.S. Needs
In a special interview, Cramer welcomed back Sen. Elizabeth Warren (D-Mass.) to discuss her proposals for dealing with the coronavirus and keeping the economy on track.
Warren said her proposals start with what matters most, the health of the American people. She said the government needs to make testing readily available, and free, for everyone. Next, we need to make a vaccine free to everyone as soon as one becomes available. Finally, she said, money needs to be available for anyone who cannot work because they have the virus or are caring for someone who does.
Turning to the economy, Warren said that we need a big stimulus package, one that shows the government understands the problem at hand. Money must be available for small businesses to keep making their payroll. Student debt payments should be canceled for the duration of the outbreak and Social Security payments should be boosted for a year.
Warren concluded by saying that she hoped all in Congress and the White House come together for the good of the nation. Schools are closing, events are being canceled and the markets are dropping, we need to take action today, she said, before the foundations of our economy are shaken.
Mourning the Bull
"The bull market died yesterday. He was 11 years old," Cramer told viewers. It wasn't froth that killed him, nor hedge funds gone wild, it was an illness that toppled his remarkable run.
In retrospect, Cramer said the death of the bull market shouldn't come as a surprise. The market spent a month ignoring the coronavirus and surging to new highs. That led to many investors being caught completely off guard when the pandemic landed on our shores. Why are investors not picking at the rubble? Don't they see the value that's being created and will be created a year from now?
Cramer had a list of why investors aren't jumping back in just yet.
First, he said there's still too much we don't know. Investors fear that tomorrow the virus will be orders of magnitude worse than it is today. Second, most investors just invest in ETFs and index funds, and they're the first ones to head for the exits. The third reason is politics, Cramer said, which has become a complete sideshow that isn't helping anyone. Lastly, he said investors fear taking losses, which is why they liquidate and keep their money in cash.
But if you take a step back and think about the world a year from now, Cramer said commerce will have restarted. Value will be created and things will be better. The problem is always the wait, he concluded, the wait always makes people too pessimistic.
Executive Decision: Yext
For his "Executive Decision" segment, Cramer spoke with Howard Lerman, founder and CEO of Yext (YEXT) - Get Report, a company that's helping to contain the spread of misinformation about the coronavirus.
Lerman announced that for the next 90 days, any business can add Yext to their website, absolutely free, and help ensure that customers are getting quick and accurate answers to the questions they have. He said by adding Yext search tools, customers can ask any question, from "Are you still open?" to "Does your product kill the coronavirus?", and get the right information.
Lerman said Yext's tools are being used from healthcare and travel to restaurants and more, and the company is committed to helping stop inaccurate information from disseminating. Now companies can see what people are asking and react quickly to this rapidly changing situation.
Prescription for What Ails the U.S.
In his "No-Huddle Offense" segment, Cramer said now that a new crisis is upon us, it's important not to repeat the mistakes of the last one. Back in 2008, the government sat paralyzed, taking no action, instead of making common sense moves to head off the collapse. Today, we have the opportunity to get in front of this crisis, Cramer said.
Here's what he recommends:
First, Cramer said, we should postpone all federal tax payments and keep more money in the pockets of businesses. Second, we need to offer businesses interest-free loans to help make payroll. Third, the government needs to guarantee the revolving loans businesses are taking out en masse to ensure that the banks remain on solid footing.
Next, Cramer said, the government should take advantage of low oil prices to add to the strategic reserve. Then, the Federal Reserve should start buying mortgage-backed bonds, because mortgage rates haven't fallen with the rest of the bond market. Finally, Cramer agreed with Sen. Warren that student loan debt payments should be suspended.
All of these are quick actions that will add liquidity and confidence to the market, Cramer said. We just need the leadership to get them done.
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:
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At the time of publication, Cramer's Action Alerts PLUS had a position in HD, ABBV.