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Roulette Market: Cramer's 'Mad Money' Recap (Monday 7/20/20)

Jim Cramer warns we're seeing binary action in the market, with investors betting impetuously, based on the latest news.
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The stock market is acting like impetuously, childishly, Jim Cramer admitted to his Mad Money viewers Monday. Investors have seemingly lost all discipline and are betting on outcomes like it was a game of roulette, Cramer said. They're switching from euphoria to disappointment seemingly by the hour, based on whatever news of the day is placed in front of them.

Monday we learned the results of AstraZeneca's  (AZN) - Get Astrazeneca PLC Sponsored ADR Report Phase I trial for their COVID-19 vaccine. The results were good, with the vaccine proving to be safe and invoking an immune response in participants. The stock market, however, wasn't impressed, leading to a temper tantrum that tanked the recovery stocks while sending the tech-heavy Nasdaq roaring to new highs.

Cramer said it's becoming clear that America doesn't have the political will to control the virus through testing, contact tracing or even masks -- and that puts our hopes in a vaccine. In the meantime, stocks like Amazon  (AMZN) - Get, Inc. Report, Zoom Video  (ZM) - Get Zoom Video Communications, Inc. Class A Report and Palo Alto Networks  (PANW) - Get Palo Alto Networks, Inc. Report will continue to be your friend. It also means that new investors will continue pouring money into stocks like Tesla  (TSLA) - Get Tesla Inc Report no matter what.

So Cramer continues to recommend a barbell portfolio, with exposure to COVID-19 stocks on one side, as well as some recovery stocks on the other -- so investors will be covered no matter which way the pandemic is headed.

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.

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Executive Decision: Sorrento Therapeutics

In his first "Executive Decision" segment, Cramer spoke with Henry Ji, chairman, president and CEO of Sorrento Therapeutics  (SRNE) - Get Sorrento Therapeutics, Inc. Report, the biotech with shares up 20% after the company received FDA approval to proceed with Phase 2 trials of its antibody therapy for COVID-19.

Ji explained that Sorrento's treatment, Abivertinib, will be tested on COVID-19 patients with severe enough symptoms to be admitted to the ICU but do not yet require a ventilator. Phase I studies have shown promising results in curbing the effects of the virus.

Sorrento also continues to work on a COVID-19 vaccine which uses the company's antibody technology.

When asked about how his company has been able to develop so many different drugs, Ji said good drugs usually come from smaller companies and Sorrento has both the infrastructure and the team to use their platform in different areas at the same time.

Executive Decision: BioReference Labs

For his second "Executive Decision" segment, Cramer spoke with Jon Cohen, executive chairman of BioReference Labs, an OPKO Health  (OPK) - Get OPKO Health, Inc. Report company and one of the companies working 24/7 on COVID-19 testing. Cramer last checked in with Cohen back in April.

Cohen said BioReference Labs is now providing COVID-19 test results in 72 hours, with expedited 24-hour service for front-line workers like doctors and nurses. The company is currently able to process 70,000 PCR tests per day.

Cohen added that there are many factors that go into the speed of test results. Samples must be transported to the lab, the virus must be isolated and then analyzed. But all of those steps also depend on their supply chain and current demand.

That's why there are many different types of tests available. Cohen said rapid, point-of-care tests started at 80% accuracy, but have steadily been improving, which is helping to relieve some of the testing burden.

Cohen also announced that BioReference will be the official tester for the upcoming NFL season, but offered no details as to what the leagues plans are for the fall season.

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TheStreet Recommends

Get Outside and Play

In the "summer of COVID," it's hard to go wrong with the outdoor stocks, Cramer told viewers. Cramer previously recommended stocks like Thor Industries  (THO) - Get Thor Industries, Inc. Report, Winnebago  (WGO) - Get Winnebago Industries, Inc. Report, and Polaris  (PII) - Get Polaris Inc. Report, but on Monday night, he added four more names to his list of great outdoor stocks.

With super-low interest rates and stay-at-home mandates, more homes are adding swimming pools, Cramer said, and that's great news for Pool Corp.  (POOL) - Get Pool Corporation Report. The stock is already up 40% for the year. Likewise, Tractor Supply  (TSCO) - Get Tractor Supply Company Report is the go-to destination for all things lawn and garden. Shares of Tractor Supply are up 54%, but Cramer said the stock can still be bought on weakness.

Once outside, you'll need supplies from Cramer's two other recommendations, Yeti  (YETI) - Get YETI Holdings, Inc. Report, which hit an all-time new high today, and Newell Brands  (NWL) - Get Newell Brands Inc Report, which now includes Coleman camping supplies and Contigo drinkware. With a 5.7% yield, Cramer said Newell is not the sleepy company it used to be.

Don't Forget the Banks

In his "No-Huddle Offense" segment, Cramer reminded viewers that the banks still matter, even though no one seemed to care that JPMorgan Chase  (JPM) - Get JPMorgan Chase & Co. Report, Bank of America  (BAC) - Get Bank of America Corp Report and Citigroup  (C) - Get Citigroup Inc. Report all reported strong results this quarter. The best performing stock of the group was Wells Fargo  (WFC) - Get Wells Fargo & Company Report, which was, coincidentally, the worst performing bank.

That's why Cramer said he'd rather own the investment banks instead. Goldman Sachs  (GS) - Get Goldman Sachs Group, Inc. Report is getting back to its roots and making a ton of money for shareholders, Cramer said, while Morgan Stanley  (MS) - Get Morgan Stanley Report is becoming more of an adviser than a bank. Either of these two great companies would make an excellent addition to your portfolio.

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:

Virgin Galactic  (SPCE) - Get Virgin Galactic Holdings Inc Report: "This is a great speculative stock."

Kingsoft Cloud Holdings KC: "I don't like any Chinese company other than Alibaba  (BABA) - Get Alibaba Group Holding Ltd. Report."

Fastly  (FSLY) - Get Fastly, Inc. Class A Report: "I like this company very much."

United States Steel  (X) - Get United States Steel Corporation Report: "They have a bad balance sheet and you need high quality companies."

Anheuser-Busch InBev  (BUD) - Get Anheuser-Busch InBev SA/NV Report: "You don't want Bud. I'd go with Boston Beer  (SAM) - Get Boston Beer Company, Inc. Class A Report."

ZoomInfo Technologies  (ZI) - Get ZoomInfo Technologies Inc Report: "I think this is a really good company."

Shopify  (SHOP) - Get Shopify, Inc. Class A Report: "I like Shopify very much. They're the second largest platform for small businesses right now."

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