The world has changed and your investments should change too, Jim Cramer told his Mad Money viewers Monday. We all want the world to go back to normal, Cramer said, but the new normal will be very different than the old one and, unfortunately, a lot less investable.
What was driving the markets higher Monday was hope, but Cramer reminded viewers that hope is not an investment strategy. Looking at the day's biggest gainers, Cramer saw a lot of hope and very little that's worth investing in.
The biggest-gainers group had a lot of retailers, including Kohl's Stores (KSS) - Get Report, Gap Stores (GPS) - Get Report, Nordstrom (JWN) - Get Report, Tapestry (TPR) - Get Report and L Brands (LB) - Get Report, along with apparel makers PVH (PVH) - Get Report and Hanes Brands (HBI) - Get Report. Cramer said all of these retailers are fighting for reasons to exist and he wouldn't own any of them. He liked both PVH and Hanes longer-term, but in the short-term, even these well-run companies are hard to own.
Also on the list of the day's top gainers was LiveNation (LYV) - Get Report and MGM Resorts (MGM) - Get Report. Cramer said he can think of no better way to spread COVID-19 than at a concert or casino, so the chance of these stocks being investable before a vaccine is available is slim. He recommended possibly owning Wynn Resorts (WYNN) - Get Report as an alternative.
Finally, there was Simon Property Group (SPG) - Get Report. Cramer said this was the only investable name on the day's list of winners. He's betting the company can replace struggling tenants with new ones and maintain their dividend.
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Executive Decision: Nvidia
Huang said that they're very excited about the acquisition because it helps them expand into the two biggest fastest growing areas of the data center: big data analytics and machine learning.
When asked about Nvidia's involvement fighting COVID-19, Huang explained that Nvidia technology has been involved in almost every facet of the pandemic. He said Nvidia-powered supercomputers are determining how the virus works and which molecules might be effective in combating it. Nvidia technology is also sequencing the Covid-19 genome and assisting in analyzing patient CT scans to help doctors treat the disease.
Huang added that it's important to invest in science because viruses will be around forever. We need a strong research machine to detect, mitigate and contain threats faster and we should be celebrating those on the front lines helping to make that happen. Everything we learn from this virus can be applied to the next virus, he said.
Nvidia is a collection of great minds solving the world's biggest challenges, Huang added. That's why the company has pledged not to layoff any workers and has instead accelerated raises to help put money in employees' pockets so they can support their families.
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Mad Money COVID-19 Index
Is this the end of index funds? For years, financial advisers have told investors it's easier to just own the whole market than individual stocks. But in a COVID-19 world, where vast swaths of the economy aren't working, Cramer said he's got a better way to invest.
Cramer unveiled his Mad Money COVID-19 Index, a collection of stocks in 17 sectors, all of which are worthy of being in your portfolio. Here are some of the highlights.
In the beverage group was PepsiCo (PEP) - Get Report and Boston Beer (SAM) - Get Report. Cloud computing included Zoom Video (ZM) - Get Report and Zscaler (ZS) - Get Report. And in packaged goods, Cramer chose Clorox (CLX) - Get Report and Kimberly-Clark (KMB) - Get Report.
Ecommerce was represented by Shopify (SHOP) - Get Report and Chewy (CHWY) - Get Report, while fintech includes stocks like Square (SQ) - Get Report and MarketAxess (MKTX) - Get Report. Cramer chose ActivisionBlizzard (ATVI) - Get Report and Take-Two Interactive (TTWO) - Get Report, among others, in the gaming group.
Home entertainment was in the index, represented by stocks like Netflix (NFLX) - Get Report and Roku (ROKU) - Get Report, while healthcare made up the majority of the list with 20 stocks in all, including Abbott Labs (ABT) - Get Report, Centene (CNC) - Get Report and Johnson & Johnson (JNJ) - Get Report.
Cramer included a mega-cap tech group that included Apple (AAPL) - Get Report and Amazon (AMZN) - Get Report, with smaller tech represented by Citrix Systems (CTXS) - Get Report and Logitech International (LOGI) - Get Report. Packaged food and specialty REITs also made the list with ConAgra Brands (CAG) - Get Report and American Tower (AMT) - Get Report both making the cut.
The index included restaurant survivors like Chipotle Mexican Grill (CMG) - Get Report and Domino's Pizza (DPZ) - Get Report and retail survivors like Costco COST and Home Depot HD. There were also semiconductors like Nvidia and high-yielders like Dominion Energy (D) - Get Report.
Finally, in the exotics group, which contained 10 stocks overall, investors will find Inovio Pharmaceuticals (INO) - Get Report, Beyond Meat (BYND) - Get Report and of course, gold, with Barrick Gold (GOLD) - Get Report.
Off the Charts: Crude Oil
In his "Off The Charts" segment, Cramer checked in with colleague Carley Garner for a read on crude oil and where this volatile commodity might be headed next.
Garner looked at a daily chart of West Texas Intermediate WTI crude futures, comparing the May deliveries against August deliveries. She noted that while May fell to negative $35 a barrel, August held up above $20 a barrel. Looking more closely at last week's action, she saw that only 10,000 contracts traded below zero, a small percentage in a market that sees one million contracts a month.
While it's clear that oil producers waited too long to cut production, Garner said the cure for low commodity prices has always been low commodity prices. Indeed, the Baker Hughes Rig Count plunged to 378, with 60 oil rigs being taken offline in just the past week. The U.S. operates less than half of what it did just a few months ago.
With the RSI momentum indicator dipping below $30 for only the second time since the 1990s, Garner was bullish on the short-term outlook for oil.
Earnings and Expectations
In his "No-Huddle Offense" segment, Cramer said the best thing for stocks right now is to temper expectations. That's why he was glad to see a negative article on Amazon hit the news Monday. The article reported that the e-commerce giant wasn't prepared for the COVID-19 pandemic, forcing it to curtail shipments for non-essential items. That's led to business leaving for competitors and frustrated, overworked warehouse workers, according to the story.
Cramer said this article has done shareholders a favor ahead of when the company reports on Thursday. Shares of Amazon had been rallying hard in recent weeks, but Monday's 1.4% decline allowed shareholders to digest what likely will be some bad news on Thursday, along with a lot of good news as well.
Earnings is all about expectations, Cramer concluded, and on this day, expectations for Amazon were tempered.
Here's what Jim Cramer had to say about some of the stocks that callers offered up during the Mad Money Lightning Round Monday evening:
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At the time of publication, Cramer's Action Alerts PLUS had a position in APPL, PEP, CLX, TTWO, ABT, JNJ, AMZN, COST, HD, NVDA.