The next two days in the stock market could be awful, Jim Cramer admitted to his Mad Money viewers Wednesday. But after these cloudy days pass, the sun will return for investors. That's why Cramer said viewers can start putting their money to work, buying high quality stocks into whatever weakness is likely coming later this week.
The market continues to focus on just two things: the continuing trade war with China and the upcoming Uber IPO. Cramer said while the political positioning may be shifting day-by-day -- and tweet-by-tweet -- the fact remains that with low interest rates, strong job growth, and the many other factors going right in our economy, we can probably withstand higher tariffs on Chinese goods. The naysayers called for doom and gloom after the initial steel tariffs went into effect -- and a year later, steel prices have actually fallen 22%.
As for Uber, Cramer said money managers continue to sell sectors like tech and the cloud in order to raise month for this red-hot IPO, but it appears that Morgan Stanley (MS) may be in the driver's seat to keep share prices from spiking and throwing the market into a tailspin.
But for those investors who can tune out the noise of this week's trading, Cramer said the longer-term outlook looks pretty good for the stock market, which is why he remains bullish and would even do some buying into the weakness of Thursday and Friday.
Cramer and the AAP team are adding to their position in Nvidia (NVDA) because they believe in gaming and the cloud as secular growth trends that can ultimately cut through the headwinds of higher tariffs. 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.
Every Economy Has its Breaking Point
The notion the China can simply ignore economic realities is patently false, Cramer told viewers. With a declining stock market, plummeting exports and rising imports, it won't be long before China is forced to come to the negotiating table.
For awhile, it seemed as if the Chinese economic stimulus plan was working and that China could drag President Trump's trade war on forever. But that no longer appears to be the case, Cramer said, despite what many pundits will tell you.
Many thought the Soviet Union could withstand anything, Cramer recalled. That was until the country collapsed from within. The same could soon be true for China, as the Chinese economy could be in real trouble unless actions are taken soon. Cramer told viewers not to believe the hype. Every economy has its breaking point.
On Real Money, Cramer taking a close look at China and trade through the lens of modern history. Get more of his insights with a free trial subscription to Real Money.
Executive Decision: Under Armour
For his "Executive Decision" segment, Cramer checked in with Kevin Plank, chairman and CEO, and Patrick Frisk, president and COO, of Under Armour (UAA) , as the company celebrated Armour Day, its annual celebration of their team and giving back to their hometown of Baltimore, Md.
Plank said that Under Armour drives shareholder return with shares that are up 26% so far this year. The company is getting their operations in order, with rising gross margins and lower inventory, he said, and you'll start hearing the company talking louder about the strides they're making later in the year.
Frisk noted that Under Armour's sourcing from China has gone from 30% in years past to just 15% today, with the ultimate goal of achieving 7% or less. Of the products made in China, only 10% end up in the U.S., making the impact of tariffs minimal.
Under Armour also continues to innovate with new products that not only provide compression, but also products to improve blood flow and speed recovery times after workouts.
Executive Decision: Wendy's
In his second "Executive Decision" segment, Cramer also spoke with Todd Penegor, president and CEO of Wendy's (WEN) , the burger chain with shares up 3.9% after the company posted a three-cents-a-share earnings beat. By contrast, shares of the fresh-faced IPO Beyond Meat (BYND) closed down 8.7%.
After a tough winter, Wendy's is back, Penegor said. The restaurant chain is focused on their "one more visit" and "one more dollar" initiatives, which aim to get customers to trade up to more premium offerings.
Wendy's has also excelled on social media. After being asked to bring back spicy chicken nuggets, Wendy's said they'd do it if two million people agreed. Penegor said within 48 hours, they had over two million likes on the tweet, so they will indeed put spicy chicken nuggets back on the menu. He said their social media team is given a lot of latitude to have a voice and this example proves how successful that voice can be.
When asked about delivery, Penegor explained that Wendy's is all about convenience. They pioneered the drive-thru window and now they are partnering with delivery companies to give customers what they want, where and when they want it.
Executive Decision: Nestle
In his final "Executive Decision" segment, Cramer also sat down with Mark Schneider, CEO of Nestle (NSRGY) , the packaged foods maker with shares that have risen 25% in 2019.
Schneider said consumers today expect products that meet their changing needs. That means innovation is vital to success, which is why Nestle is always innovating and iterating on new food and beverage items and faster cycle times to meet changing tastes.
One of those changing tastes are meat alternatives, something investors cheered with last week's IPO of Beyond Meat. Schneider said Nestle is already offering similar products in Europe and will be expanding in the future.
Schneider also talked about Nestle's partnership with Starbucks (SBUX) . The deal was announced last fall but Nestle already has 24 products on store shelves.
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At the time of publication, Cramer's Action Alerts PLUS had a position in NVDA.