Wednesday was another a classic battle between stocks and bonds, Jim Cramer told his Mad Money viewers. In today's round, the oversold stock market went up against plunging bond yields and, at least for this session, stocks won out.
Cramer reminded viewers that stocks often take their cues from bonds. As investors panic and worry about their families getting sick and the possible economic fallout from a coronavirus-induced recession, it's only natural that they'd flock to bonds for safety, no matter the price.
But we're not facing a financial crisis, we're facing a biological crisis with economic consequences, Cramer said. That's why Tuesday's interest rate cut from the Federal Reserve sent the wrong message and only stoked the flames of fear.
Cramer turned to his trusted S&P 500 Short Range Oscillator, a subscription product now offered by MarketEdge, for an unbiased take on the markets. Any reading between +5 and -5 is neutral, he explained, while any reading greater than five means sell and below negative five means buy. There is only one other reading on the oscillator that matters, however, and that's -12.
The oscillator hit -12 after the Sept. 11 terror attacks, and again at the end of 2016 and 2018 when the Fed took interest rates too far. During all of those times, a reading of -12 signaled the bottom. The only time -12 failed to be correct was in the middle of the financial crisis in 2008. Today is not 2008, Cramer said, adding there is no systemic risk to the markets. He said we will be getting a mild recession based on a lack of travel and entertainment -- so-called gatherings -- but the oscillator is saying the odds favor buying short-term -- and long-term, for that matter.
Cramer and the AAP team are looking at everything from earnings and tariffs to the Federal Reserve. Find out what they're telling their investment club members and get in on the conversation with a free trial subscription to Action Alerts Plus.
Executive Decision: Barrick Gold
Bristow said when you combine high-quality assets with high-quality people, you will always get high-quality results. That's how Barrick has been able to increase its dividend 100% since 2018, it's all based on the quality of their earnings.
Bristow said that while Barrick operates mines all over the globe, some of their most profitable locations are right here in the U.S. He said what matters most is that no matter where you operate, you must be good citizens as well as good businessmen. The communities you operate in should benefit along with the company.
When asked about the price of gold, Bristow said strong fundamentals are supporting the precious metal. Strong demand coupled with limited supplies always makes it a good time to buy gold, he said, and right now gold stocks are outperforming even gold itself.
Executive Decision: Dollar Tree
In his second "Executive Decision" segment, Cramer also sat down with Gary Philbin, CEO of Dollar Tree (DLTR) - Get Report, the discount retailer that posted a four-cents-a-share earnings beat but offered tepid guidance for the remainder of 2020.
Philbin said the Dollar Tree team is excited about their recently announced management changes. He said the changes will allow the company to have one message and speak with one voice since their acquisition of Family Dollar.
When asked about the effects of the coronavirus, Philbin explained that they're doing their best to keep items like hand sanitizer and disinfecting wipes in stock.
The supply chain is slowly returning to normal, he said, but the real story at Dollar Tree is the continued turn around of their Family Dollar locations.
Dollar Tree is also testing new store formats and layouts that are designed to give customers everything the need and expect with a whole new level of "wow factor," Philbin said.
Executive Decision: ZenDesk
Svane said he would have loved to be in Miami today for ZenDesk's annual "Relate" customer conference, but with the coronavirus outbreak, they felt it best to cancel the event.
Svane was bullish on their new Sunshine customer service platform, which he said brings customer and product information together on a single platform, so agents can see everything a customer has bought to provide the best experience possible. He was also excited for their new messaging support. He said customers don't want support via phone or email anymore, they want support on social networks and via messaging. ZenDesk now offers native support for all of these platforms.
Cramer said ZenDesk is one of the beaten-down growth stocks that will be among the first to bounce once the coronavirus subsides.
On Real Money, Cramer keys in on the companies and CEOs he knows best. Get more of his insights with a free trial subscription to Real Money.
Pick the Winners
Has the market finally seen a peak in exchange-traded funds? The ETF movement has become incredibly popular among passive investors, Cramer told viewers, but in volatile markets like the one we've just seen, picking winners is clearly the smart decision.
ETFs that mimic the S&P 500 should be the bedrock of everyone's retirement portfolio, Cramer explained. That's because the S&P index resets itself every year, adding in new winners to replace those who have been acquired and removing the under-performers that no longer make the cut.
But investors need to avoid sector-based ETFs, Cramer said. There's simply no benefit to buying a basket of winners and losers when you can pick just the winners with a little time and effort. In every sector, from oil to pharma to the industrials, there are clear winners that are easily found. Those are the companies investors should be buying on big down days, Cramer concluded.
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:
Search Jim Cramer's "Mad Money" trading recommendations using our exclusive "Mad Money" Stock Screener.
To watch replays of Cramer's video segments, visit the Mad Money page on CNBC.
To sign up for Jim Cramer's free Booyah! newsletter with all of his latest articles and videos please click here.
At the time of publication, Cramer's Action Alerts PLUS had no position in the stocks mentioned.