Wall of Worries: Cramer's 'Mad Money' Recap (Thursday 1/23/20)

Jim Cramer says this market can keep chugging along -- unless it's derailed by earnings, politics, the coronavirus, or something else.
Author:
Updated:
Original:

The higher the stock market goes, the less likely it would be able to handle a big shock, Jim Cramer told his Mad Money viewers Thursday. The bull market is likely to continue, he said, unless something unexpected happens -- and, Cramer said, there are a lot of "unlesses" out there.

Investors are preparing for Boeing (BA) - Get Report to get its 737Max back in the air soon, for example. Cramer said that would be good news for the markets... unless the process is delayed again, which would be bad news for General Electric (GE) - Get Report, and a host of other aerospace suppliers. 

The impeachment trial of President Trump should be a non-issue for the markets because a conviction is very unlikely... unless something new and unexpected is revealed.

The coronavirus spreading out of China also is not a big disruption for the markets, as the epidemic should soon be under control... unless China is covering up just how many cases have been confirmed. 

The markets are also expecting strong earnings from Apple (AAPL) - Get Report and continued low interest rates from the Federal Reserve. Those events, too, could be bullish for the markets... unless there's an unexpected drop in services revenue at Apple or a repeat of December 2018, when the Fed got too aggressive on rates. 

But if none of these things happen, Cramer concluded that we should see further gains for the markets.

Cramer and the AAP team note that stocks are taking a breather as investors consider the  news about corporate earnings and the spread of the coronavirus out of China. 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:

For his "Executive Decision" segment, Cramer sat down with Matt Maloney, founder and CEO of Grubhub (GRUB) - Get Report, the food delivery service with shares up 19% over the past month. 

Maloney said Grubhub was among the leaders in revolutionizing the food delivery business and now they're doing the same for pickup as well, with all new technology for restaurants that lets customers order, track and pickup their food in record time with maximum convenience. The new platform is currently in use at New York's Grand Central Terminal and is now rolling out to restaurants throughout the country. Maloney said its perfect for busy people on the go. 

When asked about his October 2019 comments that customers were being "promiscuous" in using multiple platforms, Maloney explained that delivery is becoming a commodity for some, but Grubhub has the scale and the service to drive loyalty with its customers. He also clarify that the company hasn't received any offers to be bought, nor are they currently soliciting offers to be bought. 

Finally, when asked about some of their privately-funded competition with sky-high valuations, Maloney said losing money is not a sustainable business model, but it does grow fast. He said a "reckoning" in the industry is likely coming sometime in 2020.

Executive Decision: First Horizon National

In his second "Executive Decision" segment, Cramer checked in with Bryan Jordan, chairman, president and CEO of First Horizon National (FHN) - Get Report, the bank with shares up 16.6% over the past 12 months. 

First Horizon has been aggressive in controlling its deposit costs, Jordan explained, which has helped the bank's net interest margins rise when most other banks are are seeing declines. 

Jordan said they're very excited about the Iberiabank acquisition, which is in the process of getting regulatory approval. The deal will transform First Horizon into a regional powerhouse with $75 billion in assets across 11 states in the Southeast. He looked forward to expanding in areas like Dallas, Atlanta and South Florida. 

When asked about the political rhetoric surrounding bank regulations, Jordan said the topic makes for a great stump speech, but in reality, the existing regulations have created a safer and more sound financial system than we had 10 years ago and state and federal regulators are doing an excellent job protecting consumers.

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.

A Good Turnaround Story

The key to picking stocks is knowing what works, Cramer told viewers. In his experience, what works are turnaround stories like Snap (SNAP) - Get Report, the parent of Snapchat that had been written off and left for dead last year, before nearly tripling from its lows. 

The problems began for Snap after the company's growth all but vaporized, sending growth investors heading for the hills. But shares were still too pricey, making them unattractive to value investors as well. 

That's when Snap got to work, fixing its app, refining its user interface to make users happy and eventually, returning to growth. As growth returned, so too did advertisers, followed by analysts and their upgrades. 

Cramer admitted being late to the Snap party. The company last reported 50% growth when it last reported and the stock has already received three upgrades in 2020. But shares still trade for just 21 times its out-year estimates, making it a buy. 

Be Cautious with Semiconductors

In his "No-Huddle Offense" segment, Cramer said when it comes to the semiconductor stocks, the easy money has already been made, especially after Intel's (INTC) - Get Report strong earnings report Thursday, which propelled the stock up another 6.3%. 

Investors need to look at the semiconductor stocks on a case-by-case basis, Cramer said, even with the 5G wireless and Apple's iPhone 11 continuing to drive growth. Intel is now too expensive, but there might be some growth left in stocks like Broadcom (AVGO) - Get Report and outliers like Western Digital (WDC) - Get Report. Other Cramer favorites like Nvidia (NVDA) - Get Report and Micron Technologies (MU) - Get Report should only be bought on a pullback.

Lightning Round

Here's what Jim Cramer had to say about some of the stocks that callers offered up during the Mad Money Lightning Round Thursday evening:

Cisco Systems (CSCO) - Get Report: "They missed the quarter bad, but I'm sticking with it." 

Apache (APA) - Get Report: "No, no. This is fossil fuels and that's the problem." 

Lattice Semiconductor (LSCC) - Get Report: "This one has lagged the markets, but it's good." 

IHS Markit (INFO) - Get Report: "This is a company I've followed forever and I've liked it since it came public." 

Republic Services (RSG) - Get Report: "You've got a good one there."

Introducing TheStreet Courses: Financial titans Jim Cramer and Robert Powell are bringing their market savvy and investing strategies to you. Learn how to create tax-efficient income, avoid top mistakes, reduce risk and more. With our courses, you will have the tools and knowledge needed to achieve your financial goals. Learn more about TheStreet Courses on investing and personal finance here.

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 a position in AAPL, NVDA.