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NEW YORK ( TheStreet) -- Investors are getting nervous, Jim Cramer told his Mad Money viewers Thursday.
On the one hand, you have strong retail sales, he said, but investors are starting to worry about today's 2.9% decline in oil prices and close below $60 per barrel and the effect on U.S. energy stocks.
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However, the overwhelming benefit most Americans will receive from lower gasoline prices might be able to offset those energy sector issues. That’s why companies like Home Depot (HD) , Lowe’s (LOW) , Wal-Mart (WMT) and TJX Companies (TJX) all rallied. Another retailer, Restoration Hardware (RH) , just reported “stunning” earnings results and 22% same-store sales growth. Investors should be long this stock with its long-term growth story, Cramer said.
The bottom line: The 45% drop in crude prices will certainly cause some woes in the energy sector. But the 70% of the economy that is driven by consumer spending should be an enormous beneficiary of lower oil prices, which should ultimately offset the damage, Cramer said.
Why Exxon Can Still Profit
Cramer pointed out that while crude finished lower on Thursday, Exxon Mobil (XOM) actually climbed 0.6%. Perhaps investors are realizing that not all companies are created equal and not all companies are going to lose.
In fact, some companies are ultimately going to make a lot of money, Cramer said. With Exxon’s strong balance sheet, terrific management and long-term focus, it’s likely to be one of these winners. That’s why the stock closed higher, Cramer said.
The one knock against against Exxon is its stagnant production growth. But the company is in a financially flexible position where it can afford to acquire these beaten down, debt-loaded companies, refinance the debt, seize the assets and boost production growth.
The move won’t happen overnight, but large energy players could “pick off the losers” in the industry that have good prospects and generate its own production growth when the oil market eventually recovers, he said.
The bottom line: The drop in oil prices is severe and harmful to many companies in the energy space. But it doesn’t present the type of systemic risk to the economy that the collapse in the housing market did a few years ago, Cramer said.