The coronavirus is front and center, and tackling it is the top concern among investors and the public, Jim Cramer told his Mad Money viewers on Friday evening.
Given the role it’s playing in the current market, updates on the spread of Covid-19 and the government's response will be the first thing investors turn their attention to on Monday morning.
On Wednesday, we’ll hear from the Federal Reserve. The market expects a rate cut and for Chairman Jay Powell to take appropriate action for the situation. Cramer said he'll be watching quarterly reports from General Mills (GIS) - Get Report, Williams Sonoma (WSM) - Get Report and Five Below (FIVE) - Get Report.
More earnings will come out on Thursday. Cramer wants to hear what Darden Restaurants (DRI) - Get Report has to say about current traffic and what Lennar (LEN) - Get Report has to say about housing demand. Investors will also hear from Accenture (ACN) - Get Report and CrowdStrike (CRWD) - Get Report.
On Friday, investors will get existing home sales numbers. In the end though, it will boil down to how the U.S. is doing with the spread of Covid-19, Cramer said.
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Executive Decision: Eli Lilly
On the show’s “Executive Decision” segment, Cramer spoke with David Ricks, chairman and CEO of Eli Lilly (LLY) - Get Report. Eli Lilly is entering a new partnership with biotech company AbCellera in an attempt to develop an antibody for Covid-19.
The treatment from AbCellera is taking antibodies from coronavirus survivors and screening those antibodies for the ones that could be active against the virus, Ricks explained. Then Eli Lilly is working with AbCellera to try and modify it to be more like a drug, and then scale it up so it can be used in clinical trials and potentially brought to market.
The speed at which this potential treatment is unfolding is unprecedented, Ricks said, and they hope to be in clinical trials by this summer.
Is Covid-19 too hard to crack? Ricks said he doesn’t think so, but acknowledged that it will take time to develop multiple treatments and vaccines. However, Eli Lilly wouldn’t be going after it if they didn’t believe it would work, he said.
This thing has been pretty scary, Cramer said, so what should people know? People should be concerned but not frightened, Ricks replied. This coronavirus spreads quickly, but most who get it will not be in critical condition. Keep common sense in mind, like social distancing and washing your hands, he added.
Executive Decision: DocuSign
The company just reported better-than-expected earnings after the close on Thursday and its stock jumped 12.6% on Friday in response. It was a “fantastic” quarter with very bullish guidance, Cramer said, who added that he likes this kind of stay-at-home stock.
The company is accelerating its billings and has a lot of momentum behind it, Springer said. He explained that for companies large and small, going through the agreement process, digitally signing those agreements, then managing those agreement in what referred to as “the agreement cloud” drives tremendous value.
From an ROI standpoint, it’s a great tool for businesses. On top of that though, it’s such a better experience than the traditional legal agreement path. Springer said the company’s largest competition is paper and manual processes, as companies look to digitize their strategies.
As for Covid-19, Springer said the company is not looking to profit off the event, but has seen companies accelerate activity that they had already planned on doing.
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Off the Charts: VIX
On the show’s “Off the Charts” segment, Cramer took a look at the work of RealMoney contributor Mark Sebastian, the founder of OptionPit.com.
Sebastian studies the CBOE Volatility Index, also known as the VIX. He notes that this week, it had its fourth-highest close ever. The only closes higher than the current time period were during the Great Recession.
Peak volatility does not mean peak selloff, though. In other words, even if the VIX has hit its high, it does not mean we have seen the lows in the stock market. For instance, during the Great Recession, the VIX hit its two highest points in the fourth quarter of 2008, but was well below those highs when the market bottomed in March 2009.
Sebastian believes this market could have some aftershocks in the days and weeks ahead and believes the current rally could be built on shaky ground.
To give a more bullish signal, the VIX needs to unwind a bit. It doesn’t seem like the markets are there yet, with Sebastian arguing we may even still see new lows in the stock market.
Shop While Things Are on Sale
During these volatile and tumultuous times, some investors may be wondering if doing their investment homework is even worth it anymore.
Of course it is, Cramer argued.
Despite short-term gyrations in the market where many market participants are selling because they have to (or because they are algorithms), investors can make a solid return by buying into high-quality companies, high-quality dividend stocks and quality high-growth stocks.
Researching which ones to buy is a critical part of the process. On top of that, investors should be buying on the way down, because when we finally get Covid-19 contained, the indices are likely going to rip and investors who wait around for a bottom may very well miss their chance to get long.
Don’t go all in at once, because we can certainly go lower, Cramer reasoned. But make sure you’re getting a piece of these stocks while they're at a discount.
Here’s what Jim Cramer had to say about some of the stocks during the Mad Money Lightning Round:
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At the time of publication, Cramer's Action Alerts PLUS had no position in the stocks mentioned.