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NEW YORK ( TheStreet) -- It's not the direction of oil prices and interest rates that matters, it's the velocity, Jim Cramer said on Mad Money Wednesday as he opined on the market's strong snapback rally on positive comments from the Federal Reserve and a stabilization of oil futures.
Cramer explained that the markets understand the U.S. economy is improving, which, in turn, means interest rates will eventually need to move higher. What the markets don't know, however, is when exactly that will happen. That's why today's positive comments from Fed Chair Janet Yellen gave the markets a welcome breather from their seemingly endless worries.
Then there's oil. Cramer said the markets can handle and adapt to lower oil prices, but just not all at once. That's why today's momentary stabilization in oil futures was also greeted positively. The economies of Russia, Brazil and Mexico all need time to digest lower prices, Cramer continued, and many of the at-risk U.S. shale drillers do as well.
Cramer said he's not calling a bottom in oil prices, as they may still have more room to fall. But even a day's rest from the selling in oil will allow investors, analysts and oil companies themselves some time to assess their situations.
Off the Charts
In the "Off The Charts" segment, Cramer went head to head with colleague Bob Lang over the direction of overall markets, given the continued decline in oil prices.
Lang first looked at a daily chart of West Texas Intermediary (WTI) crude since June of this year. He noted that there's no doubt that the trend is not your friend when it comes to oil and it shows no signs of changing anytime soon. But does that necessarily mean that stocks will follow suit? Lang was not convinced.
This is not the first time oil prices have seen big declines. In fact, Lang noted that it happened in 1986, 1991, 1993, 1997 and 1998. Yet, during all of those years, where oil fell around 30%, the S&P 500 managed to post gains between 10% and 33% by year's end.
This time is likely to be the same, both Cramer and Lang agreed. Eventually, the linkage between oil and stocks will be broken, but it hasn't happened yet.
What Should You Buy Next?
Oil prices may have given the stock market a much needed relief rally today, but which stocks should investors be ready to buy the next time the market tanks? Cramer offered a few suggestions.
CVS Health (CVS) is a stock that sells at a premium multiple of 18 times earnings. But given the company's leadership with its "No tobacco" policy, Cramer said this stock is worth buying on weakness.
Cramer was also a fan of Clorox (CLX) , a stock that may not be exciting but does deliver consistent earnings that investors reach for during times of panic. He also gave the nod to Hain Celestial (HAIN) and Monster Beverage (MNST) , two food and drink stocks that aren't tied to oil prices or Russia.
Finally, Cramer said he likes Kimberly-Clark (KMB) , another safe, consistent company that investors tend to gravitate to when the markets head south.
Executive Decision: Tom Quinlan
For his "Executive Decision" segment, Cramer sat down with Tom Quinlan, president and CEO of RR Donnelley (RRD) , the commercial printer whose shares fell 21% for the year despite the company's now-6% dividend yield.
Cramer first asked Quinlan about his company's debt load, a hot topic for many analysts. Quinlan responded by saying that Donnelley has guideposts for the amount of debt it wishes to carry and will soon be back within those limits. Given the amount of cash flow his company generates, Quinlan said he's comfortable with the debt load.
Quinlan also noted Donnelley has returned over $14 billion to shareholders in recent years with acquisitions, dividends and stock buyback programs. He expects those programs to remain strong in the future.
Finally, Quinlan talked about new technology. He said while Donnelley will always be a printing company, putting ink onto paper, it is also expanding into other areas, such as sensor labels, to maintain growth.
Cramer noted that normally a 6% yield should be a red flag for investors but in the case of Donnelley, which is consolidating its industry and taking market share, he's not worried.
In the Lightning Round, Cramer was bullish on AbbVie (ABBV) , Bristol-Myers Squibb (BMY) , Hewlett-Packard (HPQ) , Celgene (CELG) , Regeneron Pharmaceuticals (REGN) , Agios Pharmaceuticals (AGIO) and General Electric (GE) .
Executive Decision: Roger Stone
In his second "Executive Decision" segment, Cramer sat down with Roger Stone, chairman and CEO of KapStone Paper (KS) , which just announced a 10-cents-a-share dividend.
Stone said the paper industry is seeing a lot more pricing stability than in years past now that supply and demand are more in balance. He noted that consolidation in the industry has helped remove the more aggressive players, while the cost of building a new paper mill has kept new players from entering the business.
When asked about its newly announced dividend, Stone said it is a sign the company expects business to be good for a long time to come. He also said KapStone is still considering changing its structure to a master limited partnership, but hasn't yet heard back from the IRS.
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-- Written by Scott Rutt in Washington, D.C.
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