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Jim Cramer on Netflix, Apple, Market Rotations, Stay-at-Home Stocks

Jim Cramer and Katherine Ross discuss Netflix's earnings, market rotations, Apple's 'Spring Loaded' event and Cramer's two-market thesis.

As all three major indices move higher in intraday trading Wednesday, Jim Cramer had a simple warning for investors: Ignore market rotations at your own peril. 

Cramer and Katherine Ross discuss Netflix's  (NFLX) - Get Netflix Inc. Report earnings, whether or not the two-market thesis that Cramer is working off of is hurting the stay-at-home stocks,  and Apple's  (AAPL) - Get Apple Inc. Report 'Spring Loaded' event and more in the video below.  

Netflix Reported Earnings

Netflix reported earnings and said that it expects to add around 1 million new subscribers to its streaming service this quarter, a figure that came in below forecasts of around 4.8 million. The estimate followed a weaker-than-expected March quarter tally of 3.98 million, which also missed analysts' estimates of a 6.25 million total, TheStreet's Martin Baccardax noted. 

"In terms of Q1 performance, it really boils down to COVID, frankly (which) continue to have a big impact on the world." CFO Spencer Neumann told investors on a conference call late Tuesday. "For us, at a minimum, it creates just some short-term kind of choppiness in some of the business trends that we see.

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"And we also have a near-global shutdown in production which we've been ramping safely and at scale through much of last year and into this year, but it did push some key title launches into the back end of this year," he added. "So the combination of those two things does create some noise (and) it's super hard to forecast quarterly subscribers, particularly in this environment."

Jim Cramer said in a tweet that Netflix was "a big reset but i doubt it will be counted out. It is the weakest of the FANGs." 

Back to the Market That Baffles?

"The bond market made me do it. That's what I think when I see interest-rate sensitive stocks like the drugs and the utilities screaming on pretty much nothing, while the cyclicals and the techs get pummeled for the second day in a row," Cramer wrote in his Real Money column on Tuesday afternoon.

"There are so many new investors in stocks these days and for the most part, they have only seen stocks go higher. The last two days have been a rude awakening to those who joined the market in the last 10 months because they now realize what many old hands have known for years: Boy, can you lose a lot of money fast in stocks," he continued.

"Now, a lot of these newbies chose to buy stocks because they were exciting -- all those "the next Tesla (TSLA) " special purpose acquisition companies, with projections so bountiful that they almost had to be false. (They got away with it, by the way, because under President Donald Trump, there was a ridiculous anything-goes approach to anyone and anything that wanted to come public. This backdoor, this loophole burned people so badly that you can almost call it celebrity arson, as money managers teamed up with famous people to fleece you into buying concepts, not companies, but concepts that fizzled and burned your portfolio to a crisp.)"

Hear what Jim Cramer is only telling members of his Action Alerts PLUS investing club in Wednesday’s Daily Rundown.