The recession talk hasn't vanished, but it sure is getting buried under a mountain of positive data points, Jim Cramer told his Mad Money viewers Monday. It seems last week's talk of an inverted yield curve causing a recession might have been misguided after all.
Cramer once again cautioned investors against following those to take a top-down macro approach to our economy. It's far better, he said, to listen to the conference calls of individual companies for a real read on how the economy is doing. Monday, Walmart (WMT) - Get Report delivered a 2.8% jump in same-store sales -- a clear indication that the consumer is alive and well.
We also received strong earnings from chipmaker Nvidia (NVDA) - Get Report , earnings that ran afoul of pundits who "knew" just 10 days ago that the semiconductor industry was headed for recession. Nvidia followed Broadcom (AVGO) - Get Report , Texas Instruments (TXN) - Get Report and others who all confirmed things are fine.
Still need more convincing? Cramer noted Apple's (AAPL) - Get Report talk with President Donald Trump regarding tariffs seems to be bearing fruit. That stock was also headed for a downturn according to the pundits. Finally, there was Estee Lauder (EL) - Get Report , another great consumer company that proved that when buying makeup, consumers don't first consult the most recent bond prices.
Not All Retailers Are Equal
When it comes to retail, if it isn't digital or off-price, it's likely in decline and slowly fading away, Cramer warned viewers. That was clearly apparent when Macy's (M) - Get Report reported disappointing earnings this quarter, but that doesn't mean all retailers are created equal.
Cramer said WATCH -- his acronym for Walmart (WMT) - Get Report , Amazon (AMZN) - Get Report , Target (TGT) - Get Report , Costco (COST) - Get Report and Home Depot (HD) - Get Report -- all have strong enough balance sheets that allow them to innovate and compete. But even beyond WATCH, there are winners.
Cramer noted that off-price retailers like TJX Cos. (TJX) - Get Report and Burlington Stores (BURL) - Get Report but distressed merchandise from full-price retailers like Macy's, and they're in good shape. The dollar stores are another group that represents value and consumers continue to flock to them.
Finally, Cramer was bullish on a few specialty brands, like Columbia Sportswear (COLM) - Get Report , Lululemon Athletica (LULU) - Get Report and Boot Barn (BOOT) - Get Report . If your retailer isn't among of these groups, then chances are they're not doing well in our new retail world that craves convenience and value above all.
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Ready for a Ride?
Investors searching for income should look no further than the amusement parks, Cramer told viewers, where Six Flags (SIX) - Get Report pays 5.7% and rival Cedar Fair (FUN) - Get Report pays a stellar 7.1%. But which is the better stock?
Cramer said both companies have been underperforming as of late, blaming the weather for weak attendance and customer spending. Six Flags was also hoping to license its name to some overseas properties, but those projects have been delayed thanks to a slowing global economy.
When while investors has given up on these names, both parks have been posting solid earnings that makes their bountiful dividend yields very attractive. Of the two, Cramer gave the edge to Cedar Fair, which trades at less than 15 times earnings, as compared to Six Flags at 19 times earnings. He said Six Flag's international exposure simply makes it less appealing than its domestic rival.
Off the Charts: Stock Exchanges
In the "Off The Charts" segment, Cramer checked in with colleague Bob Lang over the charts of the stock exchanges, namely CME Group (CME) - Get Report , Intercontinental Exchange (ICE) - Get Report and CBOE Global Markets (CBOE) - Get Report , three red-hot stocks thanks to increased volatility and trading volumes.
Lang first looked at a daily chart of CME, the first of the group to be locked in a strong rally since April. CME is also a stock making fresh new highs. Lang noted that even during the July pullback, CME buyers stepped in almost immediately and the MACD momentum indicator continues to show a strong uptrend.
The same pattern can be seen in Intercontinental and CBOE. Lang called out strong MACD and relative strength indicators on each of these exchanges as well. He felt Intercontinental, like CME, can be bought immediately, but suggested CBOE be bought into weakness.
The New Consumer
In his "No-Huddle Offense" segment, Cramer told viewers that consumers are still shopping, they're just not shopping like they used to. There is a generational shift in spending patterns, he said, and it's leaving many companies behind.
Even in a market with strong job growth and increasing home values, the new consumer would rather spend on Netflix (NFLX) - Get Report and Take-Two Interactive (TTWO) - Get Report than shop at the mall. They'd rather use Uber (UBER) - Get Report than buy a car. And they're all about value and convenience.
These patterns are here to stay, Cramer concluded, which is why so many retailers are in trouble.
On Real Money, Cramer analyzes the American consumer, fueled by freedom of choice. 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 NVDA, AAPL, AMZN, HD, BURL, SHOP, MSFT.