Why is it getting so hard to make money in the stock market? Jim Cramer told his Mad Money viewers Tuesday it's because fewer and fewer stocks are working with every passing day. Today's announcement by the Commerce Department that an additional 28 Chinese companies will be added to their blacklist shrinks the list of investable stocks even further.
Shares on Nvidia (NVDA) - Get Report fell 3.8% today, and is the most recent collateral damage in the growing trade war, Cramer said. Today's news also dashed any hopes for a quick resolution to the trade dispute, which will cause the market to recalibrate its expectations yet again.
There aren't many places to hide, Cramer admitted. Only Walmart (WMT) - Get Report , Target (TGT) - Get Report and Costco (COST) - Get Report have the scale to offset the additional tariffs that are likely coming next week. The rest of retail won't fare as well.
Investors may be tempted by the railroads, but Cramer cautioned that continuing labor strikes at General Motors (GM) - Get Report will dampen earnings. The banks are inexpensive, he said, but they're suffering from the yield curve. Meanwhile, aerospace remains hostage to Boeing (BA) - Get Report and the 737Max.
He likened the situation to being a quarterback with fewer and fewer options. So, if you are the quarterback what do you do? He said, "I think you keep just try to protect the football."
Cramer urged viewers to be patient and be careful in the coming days, as the market will need time to finish resetting its expectations.
Cramer and the AAP team view this pullback as an opportunity to add to a visible, technology driven secular growth story at a cheaper price. Find out what they're telling their investment club members about Marvell (MRVL) - Get Report and get in on the conversation with a free trial subscription to Action Alerts Plus.
Executive Decision: Domino's Pizza
For his "Executive Decision" segment, Cramer spoke with Rich Allison, CEO of Domino's Pizza (DPZ) - Get Report , a stock that closed higher by 4.6%, even though the company reported mixed earnings that included a cut in their full-year outlook.
Allison said Domino's continues to have a terrific business model, one that generates over $1 million a day in free cash flow. He also said the days of venture-funded delivery services losing tons of money in order to gain market share may soon be ending. But even with increased competition, Domino's continues to grow faster than its category.
When asked about China, Allison explained that Domino's has been refining its business model for the past 10 years and is now accelerating their store openings to bring Domino's to millions more people in China.
Here in the U.S., Domino's is also adding locations, Allison said, as they work to get even closer to their customers. He said not only does being closer to customers make carryout easier, but it also allows customers to get their deliveries faster, lowers costs and allows drivers to make more money with more deliveries per hour.
Finally, when asked about innovations, Allison said Domino's has a lot of great new products coming to the menu in 2020.
Executive Decision: Emerson Electric
In his second "Executive Decision" segment, Cramer sat down with David Farr, chairman and CEO of Emerson Electric (EMR) - Get Report , the industrial conglomerate that just received the attention of an activist investor.
Farr started off by saying that the Emerson's business continues to perform well, with 5.5% sales growth for 2019. That said, Emerson operates in a difficult macro environment with challenging global dynamics. That's why Farr is speaking to all shareholders, including the activists, and they've spoken loud and clear that they want the company to continue to generate high returns, even in a slowing or no-growth economy. Farr said those plans are already underway as Emerson is cutting costs and firming up its balance sheet so it will be positioned to grow when the global economy rebounds.
Turning to China, Farr said that China remains Emerson's second largest market and continues to grow. The company has 25 facilities and a few research centers inside of China and Emerson is taking markets share with innovative products their Chinese customers love.
Cramer said investors looking for an industrial stock to add to their portfolio need to consider Emerson, which is doing all of the right things to strengthen its business.
Off the Charts
In the "Off The Charts" segment, Cramer checked in with colleague Rob Moreno over the direction of the markets.
Moreno first looked at a monthly logarithmic chart of the Nasdaq, noting that the 15-month consolidation period we've been seeing is almost complete. This pattern, similar to ones in 2011 and 2015, will likely end in a sizable market decline.
Moreno's theory was confirmed by the weekly chart of the S&P 500, where the Bollinger bands showed tightening volatility, which signaled a sharp decline is likely. The index's daily chart was also bearish, displaying a double-top formation with a floor at 2,825. Moreno felt that even the floor at 2,725 wasn't likely to hold, indicating the markets could bottom as low at 2,600.
Cramer said even if investors don't believe in technical analysis, it's always helpful to know what the bears are thinking.
Market's Gotten Picky About Dividends
In his "No Huddle Offense" segment, Cramer reminded viewers that all dividends are not created equal. He said the market's gotten picky about dividends as of late, trusting very few companies while panning lots of others.
Cramer said the markets love the non-retail REITs and also the utilities, but that's about it. If you're Macy's (M) - Get Report , with a struggling business, a lot of debt and a 10.2% yield, the market doesn't care. Likewise, with BP (BP) - Get Report , the oil giant with a 6.7% yield. Neither of these outsized yields seem to matter.
The markets are looking for steady companies they can trust, Cramer concluded, and that means REITs and utilities and little else.
On Real Money, Cramer says yield is fickle. See what else he has to say about utilities and REITs, and get more of his insights with a free trial subscription to Real Money.
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At the time of publication, Cramer's Action Alerts PLUS had a position in MRVL, NVDA, BP.