There's another tough week of earnings ahead, Jim Cramer warned his Mad Money viewers Friday. If a company has any ties to the Federal Reserve or to China, look out, Cramer cautioned, because this market sometimes pans even the best earnings.
Cramer's game plan starts on Monday with earnings from Kimberly-Clark (KMB) and Hasbro (HAS) . Cramer said Kimberly-Clark may be able to extend the gains made by Procter & Gamble (PG) , but Hasbro isn't likely to do well this quarter.
On Tuesday, it's earnings from 3M (MMM) , Verizon (VZ) , United Technologies (UTX) , Caterpillar (CAT) and McDonalds (MCD) . Cramer was bullish on Verizon and McDonalds, but noted the others all face China risks.
Wednesday brings earnings from Boeing (BA) , AT&T (T) , Microsoft (MSFT) and Visa (V) , all of which Cramer was bullish on. In the bear camp was Ford (F) and Advanced Micro Devices, (AMD) the semiconductor maker with sky-high expectations.
For Thursday, the earnings keep coming and Cramer will be watching Comcast (CMCSA) and Merck (MRK) , two of his favorites, along with Amazon (AMZN) and Alphabet (GOOGL) , which have become too hard to call. Intel (INTC) also reports and Cramer said that one is not hard to call: It will likely be bad.
Finally, Colgate-Palmolive (CL) rounds out the week, but unlike Kimberly-Clark, Cramer expects Colgate to see market share losses.
Cramer and the AAP team are delving into Schlumberger's (SLB) mixed third-quarter results. 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.
A Message for the Fed
In his "No-Huddle Offense" segment, Cramer said the Federal Reserve just doesn't understand digitization. Every year, Cramer visits Silicon Valley, and every year he comes away with two thoughts. First, he's immensely proud of the innovation the Valley produces, but then he's also worried about all of the people that will be put out of work because of it.
While the recent labor reports show labor shortages in many blue collar jobs, what they don't show is the slow, subtle displacement of many white collar jobs thanks to automation and technology. Cramer said these workers aren't easily slotted into the jobs we need more, but gradually over time, they will be retrained and put back to work elsewhere in our economy.
That's why Cramer said Fed chair Jay Powell just needs to do his homework and see what's actually happening with our economy. Technology is helping to keep inflation in check more than ever before, and it's something that doesn't show up in the labor reports.
Over on Real Money, Cramer has more on how digitization is keeping inflation in check. Get more of his insights with a free trial subscription to Real Money.
Executive Decision: PayPal
For his "Executive Decision" segment, Cramer spoke with John Rainey, CFO of PayPal (PYPL) , the online payment processor with shares up 9.4% on the day after another stellar earnings release.
Rainey said this was a record quarter for user growth, with over 30 million net new active customers joining their platform. Overall, PayPal and Venmo have 250 million customers worldwide.
It was a little more than a year ago when investors were wondering how PayPal would fare after splitting from eBay (EBAY) . Rainey said their non-eBay business grew at 28%, more than eight times faster than the business still tied to eBay. PayPal was also able to announce two big partnerships this quarter with Walmart (WMT) and American Express (AXP) .
When asked about Venmo, Rainey said the social payments platform is at a real inflection point, with one out of every four customers now using paid portions of the service, including shopping, debit cards and instant withdrawals.
Cramer Does His Homework
In his "Homework" segment, Cramer followed up on a few stocks that had stumped him during earlier shows. He said that Smartsheet (SMAR) , the cloud collaboration software provider, sounds terrific, but Wall Street has become hostile to growth stocks, as rising inflation is the enemy of growth. Cramer said he'd rather go with Atlassian (TEAM) , which has a proven track record.
Cramer said that licensed collectible maker Funko (FNKO) has been a wilder trader, and is now off 40% from its highs, but he'd still be a buyer for speculation, as the company has a lot going in its favor.
Getting Spooked About United Rentals
When the Fed gets too aggressive on interest rates, some stocks become a proxy for the business cycle, Cramer warned viewers. That's certainly the case with United Rentals (URI) , which plunged 15% Friday and is down more than 28% for the month of October, as investors see "slowdown" written all over it.
What's got the market spooked? Cramer said there was nothing wrong with United Rentals' earnings, but the bears saw signs of a slowdown looming. United Rentals saw a dip in its rental rates and opted to pause its buyback program to help pay for the acquisition of BlueLine Rentals. Investors now fear this acquisition was ill-timed, with United Rentals buying at the top of business cycle.
While Cramer said he's still a believer in the company, that no longer matters, because Wall Street only sees bad things on the horizon.
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