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Ready for a Rebound?: Cramer's 'Mad Money' Recap (Monday 4/27/20)

Not so fast, says Jim Cramer. Investors need to remember things will never be the same. He looks for stocks with real potential.
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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 Kohl's Corporation Report, Gap Stores  (GPS) - Get Gap Inc. (The) Report, Nordstrom  (JWN) - Get Nordstrom Inc. Report, Tapestry  (TPR) - Get Tapestry Inc. Report and L Brands  (LB) - Get L Brands, Inc. Report, along with apparel makers PVH  (PVH) - Get PVH Corp. Report and Hanes Brands  (HBI) - Get Hanesbrands Inc. 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 Live Nation Entertainment Inc. Report and MGM Resorts  (MGM) - Get MGM Resorts International 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 Wynn Resorts Limited Report as an alternative.

Finally, there was Simon Property Group  (SPG) - Get Simon Property Group Inc. 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.

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: Nvidia

For his "Executive Decision" segment, Cramer spoke with Jensen Huang, CEO of Nvidia  (NVDA) - Get NVIDIA Corporation Report, which just closed on its acquisition of Mellanox Technologies for $6.9 billion.

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.

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.

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 PepsiCo Inc. Report and Boston Beer  (SAM) - Get Boston Beer Company Inc. (The) Report. Cloud computing included Zoom Video  (ZM) - Get Zoom Video Communications Inc. Report and Zscaler  (ZS) - Get Zscaler Inc. Report. And in packaged goods, Cramer chose Clorox  (CLX) - Get Clorox Company (The) Report and Kimberly-Clark  (KMB) - Get Kimberly-Clark Corporation Report.

Ecommerce was represented by Shopify  (SHOP) - Get Shopify Inc. Class A Subordinate Report and Chewy  (CHWY) - Get Chewy Inc. Class A Report, while fintech includes stocks like Square  (SQ) - Get Block Inc. Class A Report and MarketAxess  (MKTX) - Get MarketAxess Holdings Inc. Report. Cramer chose ActivisionBlizzard  (ATVI) - Get Activision Blizzard Inc Report and Take-Two Interactive  (TTWO) - Get Take-Two Interactive Software Inc. Report, among others, in the gaming group. 

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Home entertainment was in the index, represented by stocks like Netflix  (NFLX) - Get Netflix Inc. Report and Roku  (ROKU) - Get Roku Inc. Report, while healthcare made up the majority of the list with 20 stocks in all, including Abbott Labs  (ABT) - Get Abbott Laboratories Report, Centene  (CNC) - Get Centene Corporation Report and Johnson & Johnson  (JNJ) - Get Johnson & Johnson Report.

Cramer included a mega-cap tech group that included Apple  (AAPL) - Get Apple Inc. Report and Amazon  (AMZN) - Get Inc. Report, with smaller tech represented by Citrix Systems  (CTXS) - Get Citrix Systems Inc. Report and Logitech International  (LOGI) - Get Logitech International S.A. Report. Packaged food and specialty REITs also made the list with ConAgra Brands  (CAG) - Get ConAgra Brands Inc. Report and American Tower  (AMT) - Get American Tower Corporation (REIT) Report both making the cut. 

The index included restaurant survivors like Chipotle Mexican Grill  (CMG) - Get Chipotle Mexican Grill Inc. Report and Domino's Pizza  (DPZ) - Get Domino's Pizza Inc 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 Dominion Energy Inc. Report

Finally, in the exotics group, which contained 10 stocks overall, investors will find Inovio Pharmaceuticals  (INO) - Get Inovio Pharmaceuticals Inc. Report, Beyond Meat  (BYND) - Get Beyond Meat Inc. Report and of course, gold, with Barrick Gold  (GOLD) - Get Barrick Gold Corporation (BC) 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.

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 Monday evening: 

Archer-Daniels-Midland  (ADM) - Get Archer-Daniels-Midland Company Report: "This is a chronic underperformer. If you want yield, go with Verizon  (VZ) - Get Verizon Communications Inc. Report." 

Scorpio Tankers  (STNG) - Get Scorpio Tankers Inc. Report: "This one is good, like Nordic American Tanker  (NAT) - Get Nordic American Tankers Limited Report." 

BioCryst Pharmaceuticals  (BCRX) - Get BioCryst Pharmaceuticals Inc. Report: "I don't see any momentum." 

Slack  (WORK) - Get Slack Technologies, Inc. Class A Report: "I'd be a buyer of this stock." 

InMode  (INMD) - Get InMode Ltd. Report: "You have Abbott Laboratories and Medtronic  (MDT) - Get Medtronic plc. Report, why do you need this one?"

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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.