There are two kinds of COVID-19 winners, Jim Cramer told his Mad Money viewers Tuesday: the companies you would expect, and others we never saw coming.
Everyone knows that when you're stuck at home, you'll be using more Internet on your mobile devices. So it's no surprise that Apple (AAPL) - Get Report and Facebook (FB) - Get Report would be winners. But Cramer chose to highlight the "stunners," those companies that reported blowout numbers that surprised even their own CEOs.
During most economic downturns, discretionary spending plunges. That's why it was shocking to see the numbers from names like Polaris Industries (PII) - Get Report, which makes ATVs and snowmobiles, Thor Industries (THO) - Get Report, the RV maker, and Brunswick Corp. (BC) - Get Report, a leading boat and camping equipment maker. The outdoors bull market was also alive and well with Camping World Holdings (CWH) - Get Report, as people choose the ultimate social distancing vacations.
The outdoor theme continued with names like Tractor Supply (TSCO) - Get Report, the place to go for gardening, and Scotts MiracleGro Co. (SMG) - Get Report, for the products you need when you realize you don't have a green thumb after all.
Beyond the outdoors, Wayfair (W) - Get Report surprised with shares up 84% over the past three months as consumers spruced up their home offices with new furniture. That trend also explains the action in paint maker Sherwin-Williams (SHW) - Get Report. Finally, Cramer mentioned toymaker Mattel (MAT) - Get Report, a guest on Monday night's Mad Money. The company reported strength in practically every segment, as Uno became our nation's new favorite, two-player board game.
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.
Don’t miss Cramer’s best, every day, with fast, actionable strategies: StreetLightning.
Off the Charts: Gold and Silver
In the "Off The Charts" segment, Cramer checked in with colleague Carley Garner over the price of gold and silver, both of which have been moving precariously higher as of late.
Garner noted that the action in gold has little to do with the pandemic itself but rather in the price of the dollar as the Federal Reserve prints money and interest rates plunge. Looking at a chart of gold versus the dollar index, Garner said that after trading in lock-step, investors have been buying into the contra-action as of late, as gold soars and the dollar sinks. She said that trend cannot continue long term, but it may still have one last rally short term.
Garner felt that silver was a safer bet, but there too, she noted the trend was not sustainable longer term.
With the end of the month approaching, Garner also noted that a big spike in both precious metals is likely, as speculators sell shorter-term positions in favor of longer ones. That quick move to the upside will likely be met with sharp downside pressure. Once the meltdown in gold and silver begins, things will be ugly, Cramer concluded.
If you think the pandemic has already impacted our economy, think again, Cramer cautioned viewers. August could hit us like a freight train.
Cramer explained that when the pandemic hit in March, our economy was protected by quick stimulus actions. The banks prepared for massive loan losses, but many of those losses have yet to materialize. That could all be coming to an end in August, however, as stimulus measures are set to expire and a compromise in Congress looks unlikely.
A lapse in stimulus will translate into a number of worries, Cramer said. Consumer spending will shrink as households are forced to tap into their savings to survive. Many families and businesses will not be able to make rent, leading to a wave of foreclosures and evictions. And countless small businesses are discovering that they simply can't make a profit with social distancing in place.
All of these worries could add up to significant headwinds for the economy. That's why Cramer advised lightening up on the recovery stocks and sticking with the COVID stocks, as we enter what could become a very difficult month for many Americans.
Executive Decision: Otis Worldwide
In his first "Executive Decision" segment, Cramer spoke with Judy Marks, president and CEO of Otis Worldwide OTIS, the elevator maker that came public in April and has seen its shares rocket 37%.
Marks said that China has fully recovered from the pandemic and many other areas in the world are following suit. She said while only 65% of all construction projects were open in April, over 90% are currently back in operation. The recovery coupled with innovation and process improvements are leading to increased sales and gross margin expansion, she said.
"Over two billion people a day touch our products," Marks noted, and once Otis installs an elevator or escalator, they offer service and support for their products for decades to come.
When asked about the effects of the pandemic and post-pandemic world, Marks said that nearly a half of Otis' products are residential, so they will do just fine if more people work from their homes. She also noted that two-thirds of their revenue is derived in U.S. dollars, euros and yuan, providing them some currency flexibility.
Finally, Marks touted Otis' innovation and commitment to new technology, such as apps, gesture controls and other traffic flow tech to help keep the world moving
Executive Decision: Centene
Neidorff said that he always reports on the facts as he sees them, and while they were expecting to have COVID-19 under control by now, that is not the case and that will be impacting their earnings. Centene expects revenues to be up $3.5 billion for the year.
When asked about the timeline for a COVID-19 vaccine, Neidorff said they still don't know yet how long the antibodies will stay in your system, which could make the vaccines under development very short-lived. He said it will take more time to fully understand whether any of the candidates are truly effective.
Finally, when asked about testing and how some sports leagues have access to rapid testing while most of America doesn't, Neidorff said that disparity is all about relationships and when it comes to healthcare, everyone should have access to the same treatments.
On Real Money, Cramer keys in on the companies and CEOs he knows best. Get more of his insights with a free trial subscription to Real Money.
Here's what Jim Cramer had to say about some of the stocks that callers offered up during the "Mad Money Lightning Round" Tuesday evening:
Search Jim Cramer's "Mad Money" trading recommendations using our exclusive "Mad Money" Stock Screener.
To watch replays of Cramer's video segments, visit the Mad Money page on CNBC.
To sign up for Jim Cramer's free Booyah! newsletter with all of his latest articles and videos please click here.
At the time of publication, Cramer's Action Alerts PLUS had a position in AAPL, FB.