When will the selling in the stock market end? Jim Cramer told his Mad Money viewers Tuesday they shouldn't expect an end to the pain until Apple (AAPL) has been removed from the tariff and trade wars.
Right now, money managers are flocking to the recession stocks, those which do well in the middle of an economic slowdown. That's why we're seeing strong rallies in the likes of Johnson & Johnson (JNJ) , Clorox (CLX) and PepsiCo (PEP) . It's also why Verizon (VZ) , yes Verizon, is one of the strongest gainers over the past few weeks.
Cramer explained that money managers have chosen these select few stocks because if Apple becomes an issue in the trade war, then nothing will be safe.
In fact, Apple's decline began the day after Vice President Mike Pence gave his first speech that included tough talk against China back in early October. Since then, every event has been seen negatively and Apple shares have lost 25% of their value in just two months.
Trading at just 12 times earnings, Apple is incredibly cheap. But Cramer said until Apple is removed from the trade wars, owning shares will continue to be very difficult.
Cramer and the AAP team are looking at how news about tariffs is affecting their portfolio. 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: Salesforce
For his "Executive Decision" segment, Cramer welcomed back Marc Benioff, chairman and co-CEO of Salesforce.com (CRM) , after the company reported yet another strong quarter.
Benioff said that Salesforce remains the fastest growing enterprise software company of all time and they see continued growth through 2019 and beyond. Every company is going through a digital transformation right now, he explained, and every transformation needs to begin and end with the customer relationship.
In the case of Uber, Salesforce is helping the company not only improve relationships with their customers but also their drivers and the communities they serve. Salesforce also has a great partnership with Apple, and all Salesforce products now run natively on all Apple iPhones and iPads.
Benioff added that for many companies, rebuilding the sales relationship is only the beginning. That's why Salesforce offers apps for sales, customer service, marketing, analytics, app building, community and more.
Calling It Like It Is
If you're the type of investor who's looking for someone who's always bullish, Cramer's not your guy. "I call them as I see them," Cramer said, and that's why you always get his honest opinion.
Being a permanent bull is not a wise investment strategy, Cramer explained, nor is it helpful. Right now, the market is at risk of our president and the Federal Reserve doing the wrong things regarding tariffs and interest rates. Cramer said he sees lots of risk, but not a lot of upside at the moment, which is why he remains cautious.
There have only been three times Cramer advised selling everything and those times were 1987, 2000 and 2007, all of which were indeed the right times to sell.
But that's not where the markets are today, Cramer added. There are a lot of things that can go wrong for stocks, he said, which is why they go down on bad news, but not up on good news. But once you understand these risks, you can make informed decisions, decisions that will change as the situation changes.
Over on Real Money, Cramer says that ahead of the G-20 and Jay Powell's speech, we are at an important juncture and he wants people to realize the dangers. Get more of his insights with a free trial subscription to Real Money.
Off the Charts
In the "Off The Charts" segment, Cramer checked in with colleague Mark Sebastian to see what the CBOE Volatility Index, known as the VIX, can tell investors about where the markets are heading next.
Sebastian looked at a daily chart comparing the S&P 500 and the VIX over the past four months. Typically, the pair have an inverse relationship, with volatility rising as the market falls.
After peaking on Oct. 11 at 29, the VIX made a lower high on Oct. 24, a signal to Sebastian that a bottom was forming. Indeed, the S&P bottomed days later and a relief rally ensued, during which time the VIX retreated.
Sebastian noted that there's been very little panic during this the last leg of the bear market, as the VIX remained fairly calm. This is not the first time the market has fallen without increased volatility, however.
Back in February, we saw a similar pattern, with the first leg of the decline seeing a spike in the VIX, but the second leg of the decline in March occurring without a spike.
In his "No-Huddle Offense" segment, Cramer highlighted a few stocks he still likes in this bear market. He said that Five Below (FIVE) is a terrific regional-to-national growth story and even though the stock could get hurt with increased tariffs, it's still a winner.
Canada Goose (GOOS) sold off hard today after a secondary offering, but Cramer said the weakness was a gift for a stock that's up 99% for the year and still has a lot more room to run. Canada goose just reported a monster 20-cents-a-share earnings beat.
Finally, there's Constellation Brands (STZ) , the wine and spirits maker with shares that have fallen out of favor on Wall Street as investors fear disruption from cannabis. Cramer said he's not worried, as Constellation is a fabulous operator, with a stake in Canopy Growth (CGC) .
Can all of these names still head lower? Of course they can. But Cramer said if you can stomach some short-term pain, you'll be rewarded with long-term gains.
In the Lightning Round, Cramer was bullish on MongoDB (MDB) , Ventas (VTR) , Analog Devices (ADI) , Iridium Communications (IRDM) , Citigroup (C) , JPMorgan Chase (JPM) , Boston Scientific (BSX) and PPL Corp (PPL) .
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