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After spending time in the penalty box, it was the FANG stocks that led the market higher today, Jim Cramer told his Mad Money viewers Tuesday. The rate hike playbook is being dusted off as the Federal Reserve gets ready to tighten.
When inflation is on the rise and taking interest rates higher, investors naturally seek out stocks that can weather the storm, Cramer told viewers. That's why shares of Facebook (FB) , Amazon.com (AMZN) , Netflix (NFLX) and Alphabet (GOOGL) , formerly Google, were higher today.
Cramer said Facebook and Google, both Action Alerts PLUS holdings, along with Amazon and Netflix, all have growth that's not dependent on the economy. That's also why investors were warming up to Apple (AAPL) , another Action Alerts PLUS core position, in hope that the company's growth will continue.
Investors also are anticipating the scheduled summit between tech leaders and Donald Trump later this week to see if they can broker a peace between Washington and Silicon Valley.
Why are Cramer and Jack Mohr even more bullish on Newell Brands? (NWL) Find out what they're telling their investment club members about Newell's strategic acquisitions with a free subscription to Action Alerts PLUS.
Off The Charts
In the "Off The Charts" segment, Cramer checked in with colleague Bob Lang to review the charts of the teen apparel retailers, that most difficult-to-own sector that caters to the hardest-to-please demographic on earth.
Lang looked at a weekly chart of Zumiez (ZUMZ) and said this skateboard-themed retailer is testing its 200-week moving average and has formed a double-bottom formation. He was also bullish on the chart's Chaikin Money Flow, or CMF, oscillator.
Turning to Tilly's (TLYS) , Lang felt the stock's surge in August, followed by consolidation and another surge was also bullish, as it occurred on strong volume with a strong CMF.
Likewise with Francesca's (FRAN) , which soared 28% last week on strong earnings. With the stock above the 200-week average and the RSI and CMF oscillators both signaling "buy," Lang felt this $21 stock could see $30 a share.
Finally, Lang looked at discount retailer Five Below (FIVE) , noting a triangle pattern accompanied by a bullish crossover in the MACD indicator.
While Lang was a fan of all four names, Cramer's analysis was that only Five Below was worth owning, with the others being far too risky, especially after their recent gains.
The old school money managers are back to their old tactics, Cramer told viewers, and that's great news for laggards like IBM (IBM) .
Cramer explained that as the Dow Jones Industrial Average creeps toward 20,000, money managers are looking for names that have lagged the index, hoping for some quick gains. That makes IBM, which is up 22% for the year, but is still some 50 points from its highs four years ago, a prime candidate for buying.
Stocks that are in motion tend to stay in motion, Cramer said, and IBM appears to be getting its groove back after the company announced plans to hire more workers in the U.S. IBM also has a strong stock buyback program and a 3.7% dividend yield that will attract these fund managers.
Coming up on this episode of Mad Money: Cramer interviews Andy Mattes, CEO of Diebold Nixdorf (DBD) and Bill Stein, CEO of Digital Realty Trust (DLR) . Plus, don't miss the Lightning Round: which stocks is Cramer bullish about?
Executive Decision: Diebold Nixdorf
For his "Executive Decision" segment, Cramer sat down with Andy Mattes, president and CEO of Diebold Nixdorf (DBD) , a stock that's off 20% for 2016.
Mattes said that Diebold transformed itself with the acquisition of Wincor Nixdorf, and in so doing also increased its total addressable market by 50%. He said both teams are now working well together and there is a lot of excitement around what the combined company can accomplish.
Mattes said there are four trends in the financial world: digitalization, individualization, automation and miniaturization. Diebold, he said, now has a strong position in all four areas. The U.S. currently employs over 3.5 million cashiers, he explained, but with new technology, those employees can stop doing repetitive tasks and focus on what humans are good at, personal interactions.
When asked about the company's dividend, which was suspended during the merger, Mattes explained that his primary goal at the moment is to pay down debt. Afterward, he continued, there will be options for their use of extra cash.
In the Lightning Round, Cramer was bullish on Valley National Bancorp (VLY) , MGM Growth Properties (MGP) , Barclays (BCS) , Alaska Air Group (ALK) , Southwest Airlines (LUV) , Alibaba (BABA) , Nabors Industries (NBR) and Twilio (TWLO) .
Executive Decision: Digital Realty Trust
In his second "Executive Decision" segment, Cramer spoke with Bill Stein, CEO of Digital Realty Trust (DLR) , the data center REIT with 156 properties around the globe. Digital Realty posted 25% growth in its most recent quarter and its shares are up 30% for the year with a 3.6% dividend yield.
Stein said that the cloud, social media and content creation continue to drive his business, but there will be a tsunami of data coming as the Internet of things and driverless cars begin to take hold.
Stein explained that just one driverless car running for eight hours uses 3,000 times more data than a person does all day, meaning the demand for data and storage will grow exponentially.
When asked about competition, Stein said that its difficult to find land that can be connected to the appropriate power and fiber connectivity. That's why Digital Realty continues to fill its pipeline with new projects to maintain future growth.
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