In the horse race that is the stock market, there can be only one winner, Jim Cramer told his Mad Money viewers Wednesday.
Right now, the bulls are placing their bets on the wrong horses. The stock market is a forecasting machine, one that tries to predict what the world will look like six months into the future. But in today's world, the future isn't that simple.
There are many horses in the race, Cramer said, including the stay-at-home stocks, the recession-proof stocks, the industrials, travel and leisure, retail and restaurants and the drug makers. Those groups are joined by the tech stocks, home and home improvement plays, the financials and of course, FAANG. You can't win by betting on everything, however.
Right now, the industrials, banks and travel are in the lead, but Cramer said investors betting on these sectors are focused on the wrong problem. COVID-19 isn't our biggest threat, it's sky-high unemployment. Unless we can put millions of people to work, and soon, these sectors will quickly fall behind.
That's why Cramer said he's betting on FAANG: Facebook (FB) - Get Report, Amazon (AMZN) - Get Report, Apple (AAPL) - Get Report, Netflix (NFLX) - Get Report and Alphabet (GOOGL) - Get Report. These stocks are driven by secular trends, and win no matter what happens with our economy.
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.
Executive Decision: HP
In his first "Executive Decision" segment, Cramer spoke with Enrique Lores, president and CEO of HP (HPQ) - Get Report, the PC and printer maker that just posted a six-cents-a-share earnings beat that included an 11% revenue miss.
Lores said it was a challenging quarter for HP, but his team performed extremely well through the crisis. The company's factories in China have reopened and are almost operating at full capacity and demand for PCs and printers in China is rising.
Here in the U.S., HP saw strong demand for notebooks across the board, as people set up home offices and students moved to distance learning. Lores said the work-from-home trend is likely here to stay in many industries, which gives HP additional opportunities as they're the leader in home office equipment.
Lores was also bullish on HP's 3D printing business. He said this crisis created a need for items like face shields and respirator parts and HP printers made billions of parts to help fight this pandemic.
Don’t miss Cramer’s best, every day, with fast, actionable strategies: StreetLightning.
The Other Side of the Trade
When stocks make extreme moves, money managers love taking the other side of the trade. That's because what goes up big will often make a whipsaw move to the downside and vice versa.
Some recent examples of this phenomenon include video game maker Take-Two Interactive (TTWO) - Get Report, a company that's made a lucrative business turning hit game franchises into multi-year annuity streams. Shares of Take-Two surged as millions of people stuck at home played more video games, but even the company noted that as our economy reopens, not all of that gaming will continue. Thus the snapback move to the downside that Cramer said is an excellent buying opportunity.
The same applies to Southwest Airlines (LUV) - Get Report, one of the best-run airlines around. Cramer said being the best doesn't matter when your planes are grounded, but after a 70 million share offering at $28.50, shares plunged to $22 as money managers took the other side of the trade. Cramer said he'd also be a buyer of Southwest, which rose 3.5% today.
There are many stocks seeing similar patterns, Cramer concluded, including some of the best retailers, restaurants and cruise lines, all of which might be worth buying.
Executive Decision: Workday
Bhusri said everyone at Workday executed well in this environment and their products remain mission critical for their customers as they continue payroll, expense management -- and now workforce planning as the economy reopens. As for the latter, Bhusri said he's very pleased about their partnership with Salesforce.com (CRM) - Get Report which will bring Work.com and Workday together to help companies plan for their reopening. He said there are many things to consider in order to bring workers back safely and there are many people in Salesforce's initiatives working to that end.
When asked about their business, Bhusri said Workday is still winning new business, both in their human resource and financial products. In higher education, it has been hit or miss, he admitted, as there is still a lot of uncertainty and transition occurring.
As for Workday's own workforce, Bhusri said they were early in shutting down their offices to keep people safe and they also offered employees a two-week bonus in order to help them cope with the effects of COVID-19.
Cramer said Workday was able to deliver during a very difficult time.
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.
Executive Decision: Air Lease
For his final "Executive Decision" segment, Cramer checked in Steven Udvar-Hazy, executive chairman of Air Lease (AL) - Get Report, the airplane leasing company with its finger on the pulse of the airline industry.
Udvar-Hazy commented on the news that Boeing (BA) - Get Report is resuming manufacturing of their embattled 737 Max. He said recertification of the aircraft should be coming by the end of the third quarter and Boeing is anxious to have this important aircraft back in the air safely.
As for the health of the airline industry, Udvar-Hazy noted that nearly 4.5 billion passengers flew on major airlines in 2019. That's why he expects the industry to recover quickly, as airline travel is vital to the global economy.
Air Lease currently has 382 aircraft in their fleet with an additional 399 on order for the airlines. Udvar-Hazy said he's purchased over 3,000 aircraft in his career and his company has the experience the airlines need in times like these.
Here's what Jim Cramer had to say about some of the stocks that callers offered up during the Mad Money Lightning Round Wednesday 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 FB, AMZN, AAPL, GOOGL, CRM.