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Powering the Market: Cramer's 'Mad Money' Recap (Tuesday 6/16/20)

Jim Cramer says: Don't fight the Fed and don't fight the tape. Investors are eager for positive news, and it would be foolish to bet against them.
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There are powerful trends propelling the stock market higher, Jim Cramer told his Mad Money viewers Tuesday. This pandemic has been horrible for small businesses and our service economy, Cramer said, but many large enterprises remain relatively unscathed, and that's how stocks can still head higher.

Cramer said there were three things that helped the market rally Tuesday. First was the news that the Federal Reserve will begin buying individual corporate bonds, thereby ensuring that companies don't fail. The old saying, "Don't fight the Fed," holds true today and the Fed has unlimited money to keep companies afloat.

The second thing helping to send stocks higher was the news that anti-inflammatory steroid dexamethasone was approved in the U.K. as a promising treatment for the sickest of COVID-19 patients. The more we're able to manage this disease, the easier it will be to get back to normal.

The third positive in the markets today was the 17% surge in retail sales. Cramer said this data point helps propel the notion that the economy can recover quickly. It still may be too soon to tell, but investors should pay attention to the other trading saying, "Don't fight the tape." Investors are clearly lapping up positive news, and it would be foolish to bet against them.

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: McDonald's

In his first "Executive Decision" segment, Cramer spoke with Chris Kempczinski, president and CEO of McDonald's  (MCD) - Get Free Report, the fast food giant that posted strong sales and noted that 95% of their restaurants have now reopened around the globe.

Kempczinski said McDonald's continues to support their franchisees and will use the pandemic as an opportunity to increase efficiency and take market share in every market around the globe.

While 95% of their locations have reopened, only 1,000 in the U.S. currently have dine-in available. Kempczinski said the dine-in experience won't be the same as pre-COVID, given the new rules for social distancing and increased sanitation. That said, drive-thru has been McDonald's great asset. By limiting their menu, they've been able to serve more customers a full 23 seconds faster.

Turning to other topics, Kempczinski said McDonald's remains committed to bringing a loyalty program to the U.S. and expanding their trials of Beyond Meat  (BYND) - Get Free Report products.

Finally, Kempczinski noted that diversity remains critically important to McDonald's and their suppliers. It's something that touches every aspect of their business and they have many inclusion programs available. 

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Executive Decision: Canopy Growth

For his second "Executive Decision" segment, Cramer also spoke with David Klein, the new CEO of Canopy Growth  (CGC) - Get Free Report, the Canadian cannabis grower with shares off 15% for the year.

Klein said that Canopy has all of the pieces in place for years of profitability, including some of the best science in the industry. He said that most consumers don't want a smoking experience, but are open to food and beverage experiences. Canopy has the ability to produce drinks that can taste like anything they want and provide the right amount of buzz with zero calories. He said Canopy's drinks are better than hard seltzers.

When asked about legalization efforts, Klein said that 2022 is the year he predicts cannabis will be legalized in a big way.

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.

Off the Charts: Costco Wholesale

In the "Off The Charts" segment, Cramer checked in with colleague Tim Collins over the chart of one of Cramer's favorite retailers, Costco  (COST) - Get Free Report.

Collins looked at the daily chart of Costco, noting the stock's 10-day, 20-day and 50-day moving averages. He said that when the 10- and 20-day moving averages cross below the 50-day, that's a bearish sign which has signaled weakness in the past. The stock saw similar patterns in both December and March of this year. This bearish crossover was also apparent in the stock's weekly chart.

That makes this week a make-or-break moment for Costco. If shares end the week higher, it would be a bullish sign, but if the stock closes lower for the week on Friday, that would signal a bearish move ahead. Collins felt investors would be better served by picking other retailers for the remainder of the summer.

Infrastructure Boost?

In his No-Huddle Offense segment, Cramer pondered what the stock market would look like with a $1 trillion infrastructure package, like the one President Donald Trump is reportedly considering.

While it would be a long shot that such a bill would ever get passed just before an election, Cramer said it could be a boon for Vulcan Materials  (VMC) - Get Free Report and Martin Marietta Materials  (MLM) - Get Free Report. Of the two, Cramer preferred Martin Marietta. He said that U.S. Concrete  (USCR) - Get Free Report has been a serial disappointment and he would not be a buyer. The same with Caterpillar  (CAT) - Get Free Report, which continues to see weakness in its oil and gas business.

That leaves Nucor  (NUE) - Get Free Report, as Cramer's favorite infrastructure stock, even with shares up 6.3% Tuesday. The stock is still down 20% from its highs and yields 3.6%.

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 Tuesday evening:

Coty  (COTY) - Get Free Report: "This is a speculative stock. I'm an Estee Lauder  (EL) - Get Free Report guy. You'll make more money there."

Alamos Gold  (AGI) - Get Free Report: "No, you wand Barrick Gold  (GOLD) - Get Free Report or Newmont Goldcorp  (NEM) - Get Free Report."

Pinterest  (PINS) - Get Free Report: "Let's buy some Pinterest. "

Callaway Golf  (ELY) - Get Free Report: "I'm loving golf. That's one of the few sports you're allowed to do."

Nokia:  (NOK) - Get Free Report "I'm hearing good things after 20 years. I'm OK with it."

Energy Transfer  (ET) - Get Free Report: "I'm not a fan of pipelines right now. Take a pass."

Yeti Holdings  (YETI) - Get Free Report: "I've liked Yeti. The world hates it but I like it."

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