Jim Cramer's 'Mad Money' Recap: A Topsy-Turvy Market

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NEW YORK ( TheStreet) -- It's never too late to be more diversified, Jim Cramer told his "Mad Money" TV show viewers Wednesday as the markets seemed to turn on a dime, liking the stocks it previously hated while falling head over heels for the laggards it eschewed just a few days ago.

Cramer said the parts of the three-legged stool of the U.S., Europe and China are all showing signs of weakness. While he doesn't think we're headed towards another global recession, the weakness is causing investors to think twice about which stocks they own.

That's why the red-hot oil stocks have cooled and why some technology stocks such as Altera ( ALTR) have been offering up disappointments. Earnings from Caterpillar ( CAT) were a disaster, noted Cramer, but that doesn't mean there aren't stocks that are working.

With commodity prices falling, companies that use commodities are coming back into favor. That means packaged goods companies such as Coca-Cola ( KO) and Hain Celestial ( HAIN) are good bets, along with secular growth names like Google ( GOOG) and Apple ( AAPL), a stock Cramer owns for his charitable trust, Action Alerts PLUS .

Boeing ( BA) still has a good story to tell, said Cramer, as do the utilities American Electric Power ( AEP) and ConEd ( ED).

Investors with diversified portfolios that include some of these names may not have even noticed the shift in the market's sentiment but those who have only been following the hot money got a rude wake-up call in today's trading, Cramer concluded.

Executive Decision: Mark McLaughlin

In the "Executive Decision" segment, Cramer spoke with Mark McLaughlin, chairman, president and CEO of Palo Alto Networks ( PANW), the network security firm that roared into the markets last July with an IPO that rose 26% on its first day of trading.

McLaughlin said Palo Alto continues to deliver a next-generation security platform for enterprise networks that protects companies all the way down to the individual application level, something that no other company can provide. He said that applications are the new preferred way for bad guys to access corporate networks, which is why their technology is so crucial.

When asked about its client base, McLaughlin noted that no one vertical market represents more than 14% of Palo Alto's sales, which has kept it well-diversified and not reliant on government spending. He said corporate capital expenditures do tend to ebb and flow, but with security a top-of-mind issue at most companies, Palo Alto expects its growth to continue.

Finally, asked about the company's current litigation with Juniper Networks ( JNPR), McLaughlin said that while he cannot comment on the specifics of the case, he doesn't expect it to be a major factor for Palo Alto.

Executive Decision: Howard Schultz

In the "Executive Decision" segment, Cramer sat down with Howard Schultz, chairman, president and CEO of Starbucks ( SBUX), a stock that's up 21% since Cramer last spoke with Schultz in June. Starbucks is preparing to open its first Teavana tea bar in New York City tomorrow.

Schultz said Starbucks has actually been in the tea business since 1971, but with its acquisition of Teavana last year the $90 billion global market for tea is now right for innovation. He said the new Teavana locations will be a place to buy and sample teas and will bring all the romance and theater that Starbucks brought to coffee.

Schultz continued that Teavana is "not your mother's Lipton tea" as the shops will offer fine, exotic teas and the art of blending teas for that perfect cup. Schultz expects Teavana to become a new morning ritual for tea lovers, but unlike Starbucks, the chain will likely have fewer transactions with higher average ticket prices.

Also unlike Starbucks, which grew up as a U.S.-based franchise, Teavana will be global from the start and will feature international locations long before the U.S. market becomes saturated.

Schultz also went on the defensive, responding to allegations that Starbucks charges higher prices in countries like China. He said that while it's true the cost of a latte in China is more than in other markets, it's still comparable to others offering premium coffee in China. The cost reflects the investment Starbucks is making in its stores, people and supply chain as it gains a foothold in this new market.

Lightning Round

In the Lightning Round, Cramer was bullish on Opko Health ( OPK) and Groupon ( GRPN).

Cramer was bearish on Omeros ( OMER) and Molycorp ( MCP).

No Huddle Offense

In his "No Huddle Offense" segment, Cramer celebrated one of America's favorite stocks, Johnson & Johnson ( JNJ), a stock Cramer owns for his charitable trust, Action Alerts PLUS .

Cramer said that after years of being poorly managed, J&J has turned itself around under its new leadership and is really three great companies all merged into one. J&J includes a terrific consumer products company, a medical device company and a pharmaceutical company with a biotech kicker.

J&J gives investors a world-class balance sheet, a hoard of cash, brand names galore and a great CEO, all working to reward shareholders. Cramer said that Johnson & Johnson is a real gift to the markets.

Off the Tape

In his "Off The Tape" segment, Cramer sat down with Lou D'Ambrosio, chairman of the privately held Sensus, a leading provider of "smart grid" technologies that allow two-way communication between customers and their utilities in an effort to provide better service and conserve energy.

D'Ambrosio said very little government money is currently flowing towards smart grid initiatives, but that's OK because there's plenty of justification for smart technologies. He said utilities that have smart grids can save more and grow revenue, all while providing great benefits to society.

D'Ambrosio continued that smart grids mean no more trucks need to be rolling in order to read meters. When a line is down, the system can make repairs all by itself. It just makes sense, D'Ambrosio said -- that's why a smart grid initiative in the U.K. expects to save $10 billion a year.

When asked about his competitors, D'Ambrosio said that only Sensus has the combination of utility expertise and technology, which is why it's a leader in its field.

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.

-- Written by Scott Rutt in Washington, D.C.

To email Scott about this article, click here: Scott Rutt

Follow Scott on Twitter @ScottRutt or get updates on Facebook, ScottRuttDC
At the time of publication, Cramer's Action Alerts PLUS had a position in AAPL and JNJ.

Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for TheStreet.com, Inc., and CNBC, and a director and co-founder of TheStreet.com. All opinions expressed by Mr. Cramer on "Mad Money" are his own and do not reflect the opinions of TheStreet.com or its affiliates, or CNBC, NBC Universal or their parent company or affiliates. Mr. Cramer's opinions are based upon information he considers to be reliable, but neither TheStreet.com, nor CNBC, nor either of their affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. Mr. Cramer's statements are based on his opinions at the time statements are made, and are subject to change without notice. No part of Mr. Cramer's compensation from CNBC or TheStreet.com is related to the specific opinions expressed by him on "Mad Money."

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