Can someone please tell the consumer the economy is slowing? That's what Jim Cramer asked his Mad Money viewers Tuesday. After robust retail sales numbers, it's clear no one told the American consumer about tariffs, trade or Brexit, Cramer said. But while retail remains strong, the market overall continues to send mixed messages.
Cramer said JPMorgan Chase (JPM - Get Report) reported strong earnings as well today, but electronics supplier Arrow Electronics (ARW - Get Report) warned of weaker sales. This at the same time analysts are questioning the earnings potential at Carmax (KMX - Get Report) .
Cramer told viewers they need to remember that the Federal Reserve is chomping at the bit to lower interest rates and make up for its ill-timed rate hike in December. "Never fight the Fed," is an old trading mantra, and Cramer said he remains a believer. Investors need to stick with high-quality stocks that benefit from lower rates, he said, and avoid ETFs that lump the good stocks in with the bad.
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Stocks on Sale
Sometimes pullbacks are incredible buying opportunities, Cramer reminded viewers. Case in point, today's 4.6% plunge in Dine Brands (DIN - Get Report) , owner of the Applebee's and IHOP restaurants chains.
Shares of Dine Brands are up 41% in 2019, and for good reason. Cramer said after years of underperformance, the began to turn itself around in late 2017 and shares have been steadily marching higher since. Since 2017, Dine Brands has been executing a number of growth initiatives, including responding to changing tastes more quickly and using technology to bolster takeout sales and know instantly which items and promotions are working and which ones aren't.
While many investors weren't happy when the company slashed its dividend, Cramer said the extra money was exactly what the company needed to invest to keep itself relevant and be prepared for the future. That future now includes things like delivery, which helped increase same-store sales 7.7% at Applebee's.
Shares of Dine Brands still trade for less than 12 times earnings and have a 2.9% dividend yield.
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Executive Decision: Domino's Pizza
For his "Executive Decision" segment, Cramer spoke with Rich Allison, president and CEO of Domino's Pizza (DPZ - Get Report) , which saw its shares fell 8.6% Tuesday after the company reported same-store sales growth of 3% when analysts were looking for 4.6%.
Allison noted that overall, domestic retail sales increased by 6.8%, higher than the industry average. While the 3% same-store sales number was admittedly at the lower end of guidance, Allison said he remains quite positive on Domino's outlook.
Allison said they are seeing a more challenging environment than in years past. He cited increased competition and higher labor costs as two negative pressures. When asked about the competition, he said delivery is a hot space at the moment. However, most delivery services are not profitable and are being subsidized by investors. Once these services run their course, Domino's will continue to be among the leaders in the food delivery space.
Off the Charts: S&P 500
In the "Off The Charts" segment, Cramer checked in with colleague Carley Garner over the direction of the markets with the S&P 500 now topping 3,000 for the first time.
Garner first looked at the seasonal patterns of the S&P, noting that while far from a sure thing, typically peak in late-July and decline until at least late-August. She also considered market sentiment, which is signaling that investors are getting greedy.
Turning to a weekly chart of the S&P mini futures, Garner didn't see a lot of upside left in the market. She noted the RSI momentum indicator is high and this index is ripe for a pullback, possibly to the mid-2,700s
Even the Nasdaq painted a mixed picture, with most of the gains already priced in, leaving a rally to 8,455 possible, as well as a potential decline as low as 6,700.
Take a Step Back
In his "No-Huddle Offense" segment, Cramer opined on billionaire investor Peter Thiel's recent comments against Alphabet (GOOGL - Get Report) , charging that the company's systems have been penetrated by foreign intelligence agencies.
Cramer said without hard evidence from Thiel, these comments are simply dangerous and reminiscent of McCarthyism. It's well known that Thiel is a high-profile Trump supporter, making his actions even more suspect in the middle of a trade war with China.
In the Lightning Round, Cramer was bullish on Symantec (SYMC - Get Report) , Clorox (CLX - Get Report) , United Rentals (URI - Get Report) , Brunswick (BC - Get Report) and Danaher (DHR - Get Report) .
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