No broad-based rally is sustainable without a breakthrough in the treatment of COVID-19, Jim Cramer cautioned his Mad Money viewers Wednesday. That's why the stocks that were rallying the hardest today were those in Cramer's COVID-19 Index.
Today we heard good news from Johnson & Johnson (JNJ) - Get Johnson & Johnson (JNJ) Report that it will be starting human trials of its COVID-19 vaccine earlier than expected. We also heard more positive comments from Federal Reserve chairman Jay Powell, who pledged that the Fed is still working hard to lessen the blow to our economy.
But even in areas where the economy has reopened, people are still afraid of getting sick, Cramer said, and that means it will be a long road toward economic recovery.
That's why the stay-at-home stocks rallied today, with Zoom Video Communications (ZM) - Get Zoom Video Communications (ZM) Report, Livongo Health (LVGO) - Get Livongo Health, Inc. Report, DocuSign (DOCU) - Get DocuSign, Inc. Report and Chegg (CHGG) - Get Chegg, Inc. Report all extending their gains. Cramer's COVID-19 Index tacked on 1.4% Wednesday, after rallying Tuesday as well.
We can't truly get back to normal without a vaccine, Cramer concluded, and that means the COVID-19 Index will be with us for the foreseeable future.
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Turbulence for Travel Stocks
The speculators in the airlines and cruise lines have finally tasted some losses, Cramer told viewers, and now they're headed for the exits in droves. Shares of Carnival Corp. (CCL) - Get Carnival Corporation Report plunged 10.6% today, while rival Norwegian Cruise Line Holdings (NCLH) - Get Norwegian Cruise Line Holdings Ltd. Report fell 14.4% by the close.
Cramer said while it's true that both of these groups never deserved to be trading where they were in the depths of March, the euphoria surrounding them in recent weeks was simply unfounded. There's a big difference between surviving and thriving, and it will be a long time before these sectors are able to thrive.
The cruise lines in particular have been borrowing money at extremely high interest rates, making their future outlooks murky. Delta Air Lines (DAL) - Get Delta Air Lines, Inc. Report just issued 5-year notes with an 8% coupon, and while they didn't need to put up precious collateral, these obligations will limit their performance for years to come.
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Time for a Getaway
There's a bull market in the great outdoors, Cramer proclaimed to viewers. We're seeing strength in RVs, boating, golf and sports of all kinds that allow people to get outside and away from crowds. That's why shares of Polaris (PII) - Get Polaris Inc. Report have surged 26% over the past three months.
Two weeks ago, Polaris announced three pieces of positive news. First, the company told investors that they've seen a sharp recovery in sales. Second, they reaffirmed their commitment to their dividend. And third, they reached an agreement with creditors to maintain flexibility with their balance sheet. Cramer said these three pieces combined paint a very positive picture for a stock that trades at just 17 times earnings.
While Polaris remains sensitive to trade tensions and a possible recession, the company operates in the right sports for the right moment. ATVs, boats and motorcycles are perfect for social distancing and get people out of their homes, where they've been cooped up for far too long.
Executive Decision: Marriott Vacations Worldwide
In his first "Executive Decision" segment, Cramer spoke with Steve Weisz, president and CEO of Marriott Vacations Worldwide (VAC) - Get Marriott Vacations Worldwide Corporation Report, the timeshare vacation provider.
Weisz said Marriott's typical timeshare owner has higher incomes and higher net worth and has been less affected by the pandemic. Because of that, less than 1% of their members have taken advantage of deferred payment plans.
Timeshare owners put a lot of value on their vacations, Weisz continued, and that's why 60% of their sales have been to existing owners looking for more options. Owning a timeshare is an investment in future vacations, he said.
When asked how they compete with Airbnb, Weisz said the two offer different experiences. While Airbnb typically rents condos, Marriott's resorts are full-service with lots of amenities.
Finally, Weisz said they predicted the recovery would progress slowly, starting with short drives, followed by long drives, short flights and longer flights. These predictions have so far proven to be accurate.
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Executive Decision: Cerus
For his second "Executive Decision" segment, Cramer also spoke with William Greenman, president and CEO of Cerus (CERS) - Get Cerus Corporation Report, the plasma transfusion company that is in the fight to beat COVID-19.
Greenman said Cerus got its start in 2015, fighting the Ebola outbreak. Now with COVID-19, they are operating with 65 blood centers around the world, including hard-hit areas in Italy and Spain.
Greenman added that there are many studies happening around the world to quantify the benefits of blood transfusions and how they can help COVID-19 patients. Blood donations have plummeted significantly since stay-at-home orders began.
Here's what Jim Cramer had to say about some of the stocks that callers offered up during the Mad Money Lightning Round Wednesday evening:
World Wrestling Entertainment (WWE) - Get World Wrestling Entertainment, Inc. Class A Report: "If you want that, you want Take-Two Interactive (TTWO) - Get Take-Two Interactive Software, Inc. Report."
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At the time of publication, Cramer's Action Alerts PLUS had a position in JNJ.