Search Jim Cramer's "Mad Money" trading recommendations using our exclusive "Mad Money" Stock Screener.
NEW YORK (TheStreet) -- It’s become a foregone conclusion the Federal Reserve will hike interest rates this year, which will not be good for many companies. While companies that need to borrow -- such as those in the energy sector -- and companies with international exposure will suffer from higher rates and a stronger dollar, financial stocks should benefit, Jim Cramer told his Mad Money viewers.
Next week is light on earnings but there are a lot of data to be released that could sway the Federal Reserve when it comes to raising rates. With that, Cramer laid out next week’s game plan:
On Monday, personal income, personal spending and U.S. pending home sales data will be released. Home sales have been strong, and spending has been “robust” thanks to lower gas prices, Cramer said. However, income has been stagnant, something the Fed should consider. Vail Resorts (MTN - Get Report) reports earnings and a good result -- which Cramer expects -- could bring investors back into the struggling sector.
On Tuesday, Workday (WDAY - Get Report) and General Electric (GE - Get Report) host analyst days. Cramer expects to hear good things from both. He also expects impressive earnings results from Diamond Foods (DMND) and Costco Wholesale (COST - Get Report).
On Wednesday, Chicago PMI data will be released. Cramer expects this data to confirm his theory that manufacturing is weakening. Paychex (PAYX - Get Report) reports earnings and the stock could run if investors like the report because a rate hike would be good for the company. Box (BOX - Get Report) hosts its analyst day and Cramer expects a good showing from management but is unsure if it will be enough to snap the stock out of its funk.
On Thursday, Clorox (CLX - Get Report) and Dunkin Brands (DNKN - Get Report) also host analyst days. Investors should watch these stocks, which both rallied on Friday. McCormick (MKC - Get Report) and Micron (MU - Get Report) report earnings, too, and Cramer is not optimistic on the latter, saying he’s a seller on rallies.
On Friday, the non-farm payrolls report will be released, which will likely have a major impact on whether the Federal Reserve raises interest rates later in October.
Don't Give Up on ConAgra
Earlier this week, ConAgra Foods (CAG - Get Report) reported earnings Tuesday -- and shares promptly fell 7% in response. However, Cramer took a closer look and says the results were much better than investors seemed to think. It didn't help that Tuesday was a tough day in the markets, he added.
The company is a “house of packaged-food brands," with a portfolio containing familiar brands Chef Boyardee, Hunt’s ketchup and Slim Jim. The company also has a commercial food business as well as a private-label brand.
While revenue for consumer products were flat, operating profit climbed a whopping 22%, Cramer said. But it’s the private-label business holding the company back. After acquiring it for $5 billion back in 2012, it has been nothing but a problem.
Management is now looking to sell the unit, and use the approximate $3 billion it could bring to boost its dividend or buy back stock. This is very good news, especially as the other businesses are doing well, too, he explained.
The bottom line: ConAgra didn’t have a perfect quarter by any means, but it had more positives than negatives. Cramer finds the stock attractive near current levels and is a buyer on bad days in the market when the stock gets sold off.
China's Healthy ConsumersJim Cramer turned his focus to China following Nike’s ( NKE - Get Report) impressive earnings results and even better results in China. Sales in Greater China were up 30%, with strength in all categories. As a result, the stock jumped 8.9% on Friday.
So can we stop doubting the strength of the Chinese consumer? Cramer wondered. Starbucks’ (SBUX) CEO Howard Schultz and Apple (AAPL - Get Report) CEO Tim Cook have signaled that everything in China is going well for their respective companies, both of which are Action Alerts PLUS holdings.
While the industrial sector is lagging, auto sales may have peaked and the stock market has cratered, that hasn’t stopped Chinese consumers from buying coffee and Air Jordan shoes, Cramer said.
The Chinese stock market is not the same as ours here in the U.S.; it does not have the same type of wealth effect. For that reason, it doesn’t have the same implications when it crashes.
It’s time for investors to stop worrying about the strength of the Chinese consumer. Spending continues to do just fine. "It would pure ignorance to reach any other conclusion,” Cramer said.
Executive Decision: Brad Jacobs
For his “Executive Decision” segment, Cramer sat down with Brad Jacobs, the chairman and CEO of XPO Logistics (XPO - Get Report). The stock fell 8% on Friday and is down almost 50% over the past three months.
Jacobs said he feels bad about the losses to shareholders over the short term but it’s impossible to control the stock price. He’s the largest individual shareholder so he’s feeling the pain as well.
However, “I’m extremely confident that the company is very well positioned for dramatic shareholder appreciation,” Jacobs said.
Speaking on the company’s recent acquisition of Con-Way (CNW) for $3 billion, he said the deal was done at a valuation at 5.7 times Ebitda, but that fell to just 4.5 times Ebitda when factoring in additional synergies.
While the XPO Logistics business is cyclical, Jacobs explained the company’s cash flows are strong, which will help get it through the tougher parts of a slowdown. Speaking on the global economy, Jacobs explained that growth is slow, but there is growth nonetheless, which is good news.
In the Lightning Round, Cramer was bullish on Blackstone (BX - Get Report), KKR (KKR - Get Report), Costco Wholesale, Celgene (CELG - Get Report), GW Pharmaceuticals (GWPH) and General Mills (GIS - Get Report).
In the "Mad Tweets" segment, Cramer answered viewers’ questions sent via Twitter @jimcramer. The first was about Brazil and whether the country would do anything to improve the situation at Petrobras (PBR - Get Report) before next year’s Olympics.
While the country would love to help turn around the company’s sagging business, Cramer said Petrobras’ enormous debt load of $170 billion is simply too much of a burden for the Brazilian government to do anything about. It will take a long time for this company to turn around, especially if oil prices don’t rebound.
Turning to Perrigo (PRGO - Get Report), one viewer asked if the takeover by Mylan (MYL - Get Report) is undervaluing the company. Cramer thinks it is, which is why shares of Perrigo have been on the decline. However, he wants investors to stick with the name.
When is the time to buy Wells Fargo (WFC - Get Report)? Cramer said investors shouldn’t hope for Wells Fargo to fall to a certain price -- $47 in this case -- to buy all at once. Instead, they should start buying now, and add to the stock position periodically on pullbacks.
As for whether to buy Office Depot (ODP - Get Report) on its pending merger with Staples (SPLS), Cramer said to stay away. Takeovers don’t mean anything if the fundamentals are deteriorating, which is the case for Office Depot and Staples as Amazon (AMZN - Get Report) and Costco continue to take market share.
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.