Recovery Rally: Cramer's 'Mad Money' Recap (Monday 6/8/20)

Jim Cramer looks at what's powering the incredible rally in the Nasdaq, because it reveals what's really going on in this market.

Everyone loves a good rebound story, Jim Cramer told his Mad Money viewers Monday, but the real strength of this market isn't with the airlines, cruise lines or hotel stocks that have been bouncing back. The real market action is over on the Nasdaq, where FAANG and friends have been powering higher.

The Nasdaq is hitting new all-time highs, Cramer said, and for good reason. Apple  (AAPL) - Get Report tops the Nasdaq's biggest gainers, thanks to its services which include movies, TV shows and ApplePay. Apple is followed by Microsoft  (MSFT) - Get Report, which has benefited from companies moving to the cloud. Amazon  (AMZN) - Get Report, Facebook  (FB) - Get Report and Alphabet  (GOOGL) - Get Report also make the list of the biggest winners on the strength of the cloud and social media.

Chipmakers Nvidia  (NVDA) - Get Report and Intel  (INTC) - Get Report are on the list as our world needs new chips to power our digital economy. Cisco Systems  (CSCO) - Get Report is a surprise winner, as this old-school networking giant has reinvented itself for the cloud age. Like Apple, PayPal  (PYPL) - Get Report represents new forms of digital payments. And Tesla  (TSLA) - Get Report rounds out the top 10 with a new factory in China that is selling every electric car it can make.

So while many of the Dow stocks are getting most of the headlines, Cramer said he'd place his bets on the Nasdaq continuing to deliver for shareholders as they deliver our world into the new economy.

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: Thor Industries

In his first "Executive Decision" segment, Cramer spoke with Bob Martin, president and CEO of Thor Industries  (THO) - Get Report, the RV maker which just delivered strong earnings. Shares of Thor responded by rallying 11% into the close.

Martin said in a world where it's risky to fly or stay at a hotel, RVs are proving the perfect way to travel and still remain isolated. He said demand has been strong throughout the U.S. and also in Europe, where customers are anxious for dealers to reopen. Demand in Germany is exceptionally strong, he noted.

Customers are rediscovering RVs in many different ways, whether it's buying a new RV to serve as a mobile office or refurbishing an older RV to run a small business out of. And of course, RVs are still the most cost effective way to vacation and see America.

Thor remains committed to sustainability and having as small a footprint as possible, Martin said. RVs today use far less water and electricity than they did in years past.

Finally, Martin noted that Thor's business model is dynamic, allowing them to lever up and down production as demand dictates while still remaining profitable.

Don’t miss Cramer’s best, every day, with fast, actionable strategies: StreetLightning.

Executive Decision: Sorrento Therapeutics

For his second "Executive Decision" segment, Cramer also spoke with Dr. Henry Ji, chairman, president and CEO of Sorrento Therapeutics  (SRNE) - Get Report, a biotech with shares up 60% for the year as it works toward a treatment for COVID-19.

Ji said Sorrento's COVIDTRAP is a neutralizing antibody that has proven to prevent viral infection in lab testing. They are very excited for its prospects as both a treatment and a preventative measure for COVID-19.

Sorrento has submitted all of the paperwork with the FDA to begin human trials and Ji said he expects that phase to begin in two to three months. Sorrento has raised capital and secured partnerships to ensure they have the capital and resources needed to bring their treatment to market if it proves successful.

Sorrento is also working on other drugs, including one to treat acute respiratory distress syndrome, which may also be of benefit in the treatment of COVID-19.

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

With euphoria having taken over Wall Street, Cramer went "Off The Charts" with colleague Larry Williams for an unemotional, empirical look at where stocks are likely headed next.

Williams looks his cues from the initial weekly jobless claims, noting that the four-week moving average has now been declining for the past six weeks in row. He noted that this pattern has historically been very bullish for stocks.

Williams noted this same pattern in 1970 and again in 1982. In both cases, stocks began sizable rallies after jobless claims began to recover. More recently, the same pattern emerged in June 2002 after the dot-com collapse and again in May 2009 after the financial crisis.

Cramer said Williams has been spot-on with his analysis of the markets and he's willing to believe that the worst may indeed be behind us. That, of course, depends on COVID-19 not making a resurgence and causing additional shutdowns of the economy.

Turbulence for Travel Stocks

In his "No-Huddle Offense" segment, Cramer said if you own any of the airlines, cruise lines, hotels or retail stocks that have seen tremendous gains in recent weeks, it would be irresponsible not to take some profits. That's because the buying in these names has been relentless, and stocks don't head higher forever.

While many of these stocks didn't deserve to be trading at the lows they saw in March, the 82% gain in American Airlines  (AAL) - Get Report over just the past week just doesn't make sense for a company that's only operating 55% of their domestic schedule in July and far less internationally.

"Something feels off," Cramer concluded. This insatiable buying won't last forever.

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:

Ping Identity  (PING) - Get Report: "I say buy, buy, buy."

Biohaven Pharmaceuticals  (BHVN) - Get Report: "I say yes. I bet they get a bid, that's how good their drug is."

Lumentum Holdings  (LITE) - Get Report: "I like the optical section and I think you've got a winner."

Zynga  (ZNGA) - Get Report: "Zynga has had a big move, but I'm still focused on Take-Two Interactive  (TTWO) - Get Report."

First Horizon National  (FHN) - Get Report: "This one is way too low. It should be higher."

HSBC Holdings  (HSBC) - Get Report: "This one is OK, but so is Banco Santander  (SAN) - Get Report."

Search Jim Cramer's "Mad Money" trading recommendations using our exclusive "Mad Money" Stock Screener.

To watch replays of Cramer's video segments, visit the Mad Money page on CNBC.

To sign up for Jim Cramer's free Booyah! newsletter with all of his latest articles and videos please click here.

At the time of publication, Cramer's Action Alerts PLUS had a position AAPL, MSFT, AMZN, FB, GOOGL, NVDA, TTWO.