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Stock Market Today With Jim Cramer: Buy Southwest and Chipotle

Jim Cramer discusses the latest stock market news including how to trade Southwest and Chipotle after earnings and why the market is sending false signals Thursday.

Stocks fell Thursday following a report that said President Joe Biden would propose a capital gains tax of more than 40% for the wealthy.

TheStreet's Katherine Ross and Jim Cramer discussed breaking news in the stock market. Cramer spoke about how to trade Southwest and Chipotle after earnings and why the market is sending false signals Thursday.

Southwest Airlines: Buy Or Sell?

Southwest  (LUV) - Get Southwest Airlines Company Report on Thursday posted a narrower-than-expected adjusted loss for the first quarter as air travel continued to recover amid ongoing vaccinations and the reopening of the U.S. economy.

Cramer recommended Southwest as a buy to investors. "Southwest is a great quarter story. Gary Kelly [CEO] said their last month was very good and the next month will be very good. And the carrier is expecting a strong vacation market that's pent up," he added.

Chipotle: Buy Or Sell?

Chipotle Mexican Grill CMG on Wednesday reported a.65% rise in first-quarter net income per share, as the burrito giant's digital sales doubled to account for half of the total sales.

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Revenue rose 23% to $1.74 billion from $1.41 billion in line with estimates. Same-store sales rose 17.2%.

New menu items, "effective marketing," strength in digital sales, and "a tailwind from government stimulus payments to consumers contributed to first-quarter revenue growth," Chipotle said in a statement.

Cramer said Chipotle is a stock that people get wrong. He added he would buy some of it right here. "There are lots of critics who say the stock has run so much but it's only up 8% for the year. When your biggest worry is the cost of avocado and that's been the case for a long time then I'm a buyer," he added.

Thursday's Market

Cramer said the market Thursday is sending false signals where investors should not be getting the opportunities they are. "When you have great unemployment numbers. When you have every single quarter, other than Union Pacific  (UNP) - Get Union Pacific Corporation Report, showing stronger numbers. And yet you have interest rates down. The market may think it's right but the market can be wrong," he said.

None of the stocks mentioned in this article are key holdings in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer adds or removes stocks from his portfolio? Learn more now.