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Retail Winners: Cramer's 'Mad Money' Recap (Tuesday  9/22/20)

Jim Cramer says the winners in a COVID-19 economy, especially the retail stars, are sending strong signals about our future.
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You may not be able to see it yet, at least in the stock market, but the signs are clear: Without additional stimulus, our economy is going back into full COVID-19 mode, Jim Cramer cautioned his Mad Money viewers Tuesday. Cramer said that on days like this, investors are only focusing on the best while they ignore all of the rest.

Just look at today's biggest winners. Cramer said Amazon  (AMZN) - Get, Inc. Report continues to thrive in a COVID-19 world, at the expense of small retailers everywhere. Ralph Lauren  (RL) - Get Ralph Lauren Corporation Class A Report rose 5.4% Monday, after it announced it's laying off 15% of its staff as it continues to transition from mall-based stores to online sales. The biggest winners in retail? Lululemon Athletica  (LULU) - Get Lululemon Athletica Inc Report and Nike  (NKE) - Get NIKE, Inc. Class B Report, two brands that already have strong online followings.

In the restaurant space, Chipotle Mexican Grill  (CMG) - Get Chipotle Mexican Grill, Inc. Report and Darden Restaurants  (DRI) - Get Darden Restaurants, Inc. Report remain big winners, as they've got the scale and expertise to handle social distancing and takeout, while many local restaurants do not.

Other COVID-19 winners include all of the usual suspects, including Zoom Video  (ZM) - Get Zoom Video Communications, Inc. Class A Report, cybersecurity stocks like Zscaler  (ZS) - Get Zscaler, Inc. Report and Palo Alto Networks  (PANW) - Get Palo Alto Networks, Inc. Report. DocuSign  (DOCU) - Get DocuSign, Inc. Report closed the day strong as well. So too did Carvana  (CVNA) - Get Carvana Co. Class A Report, which knows how to sell cars online. 

But for each of these publicly traded winners, there are countless small business losers, Cramer said. These businesses won't survive once colder weather hits and COVID-19 cases begin to spike. And if there's one thing we've learned, it's that cases will spike again as our economy reopens.

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Executive Decision: Macy's

In his first "Executive Decision" segment, Cramer spoke with Jeff Gennette, chairman and CEO of Macy's  (M) - Get Macy's Inc Report, the department store chain that has been reinventing itself since the pandemic began.

Gennette said that Macy's has been listening to their customers and transforming itself accordingly. They've added loyalty programs, personalization and new product categories to their offerings as well as new payment and delivery options. Gennette  said that with customers spending more time at home, the desire to upgrade is strong. Appliances, home furnishings, kitchen items and textiles all have been in demand.

When it comes to their real estate, Gennette admitted that malls have been under pressure, but he said that Macy's stores are in the best malls and those that are not are being closed.

Finally, when asked about the Macy's Thanksgiving Day parade, Gennette said the parade will go on this year, but it will not be live. He said the parade will have a new format and different types of talent, but the Thanksgiving event will still be a part of America's holiday celebrations.

Executive Decision: e.l.f. Beauty

For his second "Executive Decision" segment, Cramer also spoke with Tarang Amin, chairman and CEO of e.l.f. Beauty  (ELF) - Get e.l.f. Beauty, Inc. Report, the cosmetics maker with shares up 18% so far in 2020.

Amin said they're very excited to have partnered with Alicia Keys to launch a new lifestyle beauty brand later this year. He said the brand will begin with skincare, but eventually expand into seven other categories and offer a holistic approach to beauty and wellness. 

Amin was also asked about their strong presence on the social media platform TikTok. He said that e.l.f. is strong with Gen Z consumers. 

Despite having a digital-first brand, Amin noted that their partnership with Walmart  (WMT) - Get Walmart Inc. Report remains strong, as does their sales with their other retail partners like Target  (TGT) - Get Target Corporation Report and Ulta Beauty  (ULTA) - Get Ulta Beauty Inc Report. Despite the pandemic, e.l.f. is gaining market share.

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Off the Charts

In his "Off The Charts" segment, Cramer checked in with colleague Larry Williams to learn where the markets might be headed next.

Williams looked at a trio of slightly non-traditional charts in his analysis. He first used a daily chart of the e-mini S&P 500 futures as a proxy for the market. Williams noted that the 72-day cycle is a gauge for when the market is likely to change direction and it's been a reliable one, signaling the bottom in May, August and October of 2019 and again in March of 2020 as the pandemic began. According to Williams, the 72-day cycle now predicts the markets will next bottom around Oct. 20.

Williams then looked at the e-mini futures chart against oil prices from 70 weeks ago. It turns out that oil prices are also an early leading indicator of where stocks will be in the future. Oil prices from 70 weeks ago also forecast a market bottom in late October.

Adding to Williams' certainty was another historical look-back, this time the e-mini futures against interstate's rates pushed forward by 110 weeks. As you probably can guess, this chart also confirmed a market bottom is due in the next four to five weeks.

Short Sellers and Safety Belts

In his No-Huddle Offense segment, Cramer said love them or hate them, sometimes short sellers bring a lot of value to the markets. Case in point: Nikola Corp.  (NKLA) - Get Nikola Corporation Report, the zero-emissions vehicle maker that Cramer had warned about since before its debut on the markets via a special acquisition company.

When you see multiple bright red flags, you need to sell, and sell right away, Cramer told viewers. That's exactly what happened when Hindenburg Research published scathing accusations of fraud at Nikola earlier this month. Today, the company's founder resigned, as both the Securities and Exchange Commission and the Department of Justice have opened investigations into Nikola and its false claims to investors.

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 Tuesday evening:

eBay  (EBAY) - Get eBay Inc. Report: "eBay is chronically undervalued."

Fastly  (FSLY) - Get Fastly, Inc. Class A Report: "I was surprised at that decline. I think it's time to buy Fastly."

First Solar  (FSLR) - Get First Solar, Inc. Report: "I'm not a solar fan and I'm not a First Solar fan."

Kratos Defense & Security  (KTOS) - Get Kratos Defense & Security Solutions, Inc. Report: "I've liked this one for a long time."

Sirius XM Radio  (SIRI) - Get Sirius XM Holdings, Inc. Report: "I think you stay long this one."

ArcelorMittal  (MT) - Get ArcelorMittal SA Report: "I do not like the steel companies right here."

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At the time of publication, Cramer's Action Alerts PLUS had a position in NKE, AMZN.