Stimulus Collapse: Cramer's 'Mad Money' Recap (Tuesday 10/6/20)

Can small businesses hold on until after the election? The airlines? Restaurants? With stimulus talks halted, Jim Cramer looks at what stocks investors should turn to.

With stimulus talks halted earlier Tuesday by President Trump, we are again living with two economies, Jim Cramer told his Mad Money viewers Tuesday. The economy that's hurting is small- and mid-size businesses, Cramer said, but you can't buy stock in those companies. Instead, all we're left with are the biggest of companies and those companies will continue to thrive at the expense of everyone else.

Cramer said he'd rather see good stimulus today than great stimulus after the election, but that's the gamble Trump has decided to make. Now we can only hope that the airlines, the hospitality industry, retailers and restaurants can hold on until November.

In the meantime, Cramer said, there are still parts of our economy that are working and don't need stimulus to survive. Those include housing, where he recommended Home Depot  (HD) - Get Report and Lowe's  (LOW) - Get Report, big-box retail with Walmart  (WMT) - Get Report and Target  (TGT) - Get Report, and autos with Autonation  (AN) - Get Report, Carvana  (CVNA) - Get Report and Ford Motor Co.  (F) - Get Report.

Among the restaurants, Cramer recommended Darden  (DRI) - Get Report and Chipotle Mexican Grill  (CMG) - Get Report as big winners. He also liked the stay-at-home stocks like Peloton  (PTON) - Get Report and of course, Amazon  (AMZN) - Get Report, which fell 3.1% today.

For those worried about a recession, Cramer suggested drug and food stocks like Johnson & Johnson  (JNJ) - Get Report and Regeneron Pharmaceuticals  (REGN) - Get Report, along with PepsiCo  (PEP) - Get Report and Conagra Brands  (CAG) - Get Report.

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Executive Decision: Paychex

In his first "Executive Decision" segment, Cramer spoke with Marty Mucci, president and CEO of payroll processor Paychex  (PAYX) - Get Report, for a read on the economy and its recovery.

Mucci explained that Paychex has been investing heavily into technology and innovation, both of which have helped it to evolve beyond just a payroll processor. He said his company's self-service and paperless options use innovations like digital signatures to make hiring and having employees easy, even if they're working remotely. Mucci promised even more innovations are coming soon.

As for the economy, Mucci said that about 80% of small businesses are nearing the end of their stimulus benefits, but many are also reinventing themselves to survive in a COVID world. Paychex is seeing strong job growth in the south and in Florida, with both residential and commercial construction improving.

Mucci added that new business formation has increased by 20% over last year and that's an encouraging sign as many of them are outsourcing their payroll and HR for the first time.

Executive Decision: Generac

For his second "Executive Decision" segment, Cramer also spoke with Aaron Jagdfeld, chairman and CEO of Generac Holdings  (GNRC) - Get Report, the generator and power storage provider with shares up 78% since Cramer last checked on the company back in March.

Jagdfeld explained that our nation's energy grid is quickly evolving from a centralized, carbon-based model to a modern, distributed and digital model that focuses heavily on renewable energy. That's why Generac is evolving from primarily being a hardware manufacturer into becoming a services and solutions provider with the recent acquisition of Embala Power Networks.

Jagdfeld said that Embala is a cloud platform that aggregates individual solar and generator installations into virtual power plants that utilities can use to help manage their power grid. During peak times, hundreds or even thousands of generators, solar installations and storage systems can be switched on remotely.

Cramer noted that with solutions like Embala, owning a generator or a renewable power setup can actually deliver a return on the homeowner's investment.

Jagdfeld added that having a generator gives you peace of mind during fires, hurricanes or other events where power can be interrupted. He said Generac units keep the lights on, keep food in your refrigerator and can heat and cool your home until power is restored.

Executive Decision: Cloudflare

For his final "Executive Decision" segment, Cramer checked in Matthew Prince, co-founder and CEO of Cloudflare  (NET) - Get Report, the content delivery and cybersecurity network with shares that are up 141% since coming public in February 2018.

Prince said the pandemic has caused many companies to accelerate their digital transformation plans and Cloudflare is providing the services they need to manage their digital assets. They offer the tools companies need for privacy, cybersecurity, compliance and more.

One of Cloudflare's most recent offerings is web analytics, an area dominated by Google  (GOOGL) - Get Report Analytics. Prince explained that while Google Analytics is great for advertisers, some companies just want to know how people are using their website without tracking and privacy concerns.

Cloudflare is also active in protecting our upcoming election. Prince explained that Cloudflare offers their services free to state and local governments and helps keep voter registrations and other election activities flowing smoothly and securely.

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Politics and Medicine are Moving the Markets

In his No-Huddle Offense segment, Cramer cautioned investors that to ignore politics is to invest at your own peril. He said in a perfect world, stocks and earnings are all that would matter.

In reality however, the stock market is held hostage to politics, especially with an election less than a month away.

Cramer said had he stuck only to stocks in 2020, he would have given viewers some terrible advice. Politics and medicine are driving the markets and that's tough to ignore.

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:

RadNet  (RDNT) - Get Report: "Most people are scared to get medical procedures. We're gonna need to wait on this one."

Blink Charging  (BLNK) - Get Report: "I think charging stations are going to be a commodity. I'd rather see you in Generac Holdings."

Sea Limited  (SE) - Get Report: "I have never had luck buying these stocks. You're on your own with this one."

Barrick Gold  (GOLD) - Get Report: "This is one of the great gold companies."

GoodRx  (GDRX) - Get Report: "I'm a huge fan of GoodRx. You need to wait though, it's way too hot."

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