Next week is the Super Bowl of earnings season, and Jim Cramer laid out his game plan for his Mad Money viewers Friday. If things go well through the week, Cramer said, the market's rally is likely to continue.
On Monday, Cramer will be watching Caterpillar (CAT) , a company that can make a ton of money in this environment, Cramer said, but also one investors should be careful with.
Next, on Tuesday, Verizon (VZ) , Pfizer (PFE) and 3M (MMM) report, along with Allergan (AGN) and Apple (AAPL) , an Action Alerts PLUS holding. Cramer said Verizon's earnings are likely to be good, but also not good enough, while Pfizer remains unloved by Wall Street. He was bullish on 3M and Allergan however, but noted the weakness in Apple is likely to continue.
The earnings continue on Wednesday and Cramer was bullish on Boeing (BA) , AT&T (T) , McDonald's (MCD) and Microsoft (MSFT) . He still couldn't recommend Tesla (TSLA) until the company fixes its balance sheet, but said Facebook (FB) , another Action Alerts PLUS holding, could be attractive.
Then on Thursday, both General Electric (GE) and Amazon (AMZN) report their earnings. Cramer said he's worried that GE needs more capital to cover losses and worried that Amazon has received too much positive attention ahead of earnings, setting itself up for a pullback.
The week ends on Friday with Honeywell (HON) and Merck (MRK) along with ExxonMobil (XOM) and Chevron (CVX) . Cramer was still not a fan of oil, but noted both oil giants should have a good story to tell. He was bullish on Honeywell and Merck.
Facebook, Amazon.com, Apple, Microsoft and Honeywell are holdings in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells FB, AMZN, MSFT, HON or AAPL? Learn more now.
Executive Decision: Wells Fargo
For his "Executive Decision" segment, Cramer sat down with Tim Sloan, president and CEO of Wells Fargo (WFC) , and the man tasked with turning the bank around.
Sloan explained that he's been tasked with finding problems at Wells Fargo and fixing them. They've been completely transparent with what they've found and ultimately, they will do right by their customers. He said the bank has upgraded their leadership, reorganized and centralized in order to have better oversight and changed their compensation plans, as well as introduce plenty of new products and services.
And while Sloan added that there is still more work yet to be done, the company did just report their highest earnings per share in 166 years.
Wells Fargo remains committed to the communities they serve, Sloan said, and one of those communities are the government workers that have been affected by the shutdown. He noted that Wells has been waiving fees, extending payments and helping those affected in any way they can.
When asked about the criticism the bank is still receiving from some regulators and those in Congress, Sloan said they're making the necessary changes and he doesn't think they deserve to be criticized for taking responsibility and working to fix the issues at hand.
The Next Big Thing
Looking for the next great investment idea? Cramer told viewers to keep their eyes open in their day-to-day lives, then do the homework on the trends they see. Case in point, the continuing trend towards cutting the cord on cable TV and using streaming services instead.
Cramer said the obvious plays in this space are Apple, Amazon and Alphabet (GOOGL) , with their AppleTV, FireTV and ChromeCasts, but sadly, the TV business simply isn't big enough to move the needle at any of these companies.
Investors could look towards a pure-play, like Roku (ROKU) , which has pivoted from being just an over-the-top hardware provider to also being a software platform with advertising revenue. But Cramer said this stock has become a battleground, falling from over $60 a share in October to lows in the $20s by December, before rallying back into the $40s currently. He endorsed owning Roku only for speculation given the risk involved.
That leaves Comcast (CMCSA) , the cable TV giant that is also pivoting into the over-the-top space, placing streaming content right along side its cable channels on its latest X1 platform. Cramer said the company is cheap, trading at less than 12 times earnings.
Continuing with his look into the video streaming business, Cramer next looked into the content providers themselves. He said that Netflix (NFLX) has been on fire for years, but still only accounts for 10% of all viewing hours watched, giving the company a lot more room to grow. While he remained a believer in the stock, he said investors would be chasing it at these prices.
Next was Walt Disney (DIS) , which has had great success with its ESPN Plus streaming service. The company plans additional services this year and Cramer said they too should be a big win for the company. Shares are cheap at just 15 times earnings.
Then there's AT&T, which owns Time Warner and HBO. Cramer said you don't own AT&T for the media side of the business, you own it for the wireless telco side that yields 6.7%.
Finally, there's CBS (CBS) and Viacom (VIAB) . Cramer said he wouldn't be surprised if these two rejoin forces to stay competitive. The CBS All Access app may only be a small part of the company's revenue, but adding Viacom could make a compelling case.
No Huddle Offense
In his "No Huddle Offense" segment, Cramer explained why he's so confident the U.S. can win the trade war against China. He said the numbers speak for themselves. China's unemployment is at 4.9%, heading towards 5%. Ours is at 4% and still falling. China's economy is decelerating, ours is seeing the lowest unemployment in decades. China's stock market has fallen 27%. The U.S. markets are getting their groove back.
In a nutshell, Cramer said China simply has more to lose. The U.S. can afford to wait, but China will come under increasing pressure to act.
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