A better business environment breeds better earnings, Jim Cramer told his Mad Money viewers Tuesday. And if the latest National Federation of Independent Business survey is to be believed, there's a lot more optimism among business owners. In fact, according to today's survey, there hasn't been this big of a surge in economic optimism since Ronald Reagan took office in 1980.
What does that mean for the stock market? Cramer said it means that contrary to what the media has been reporting, businesses may indeed be willing to hire more people, take out more loans and invest in new equipment and technology. That's great news for a host of publicly traded companies.
It may not be good news for the banks, which need higher interest rates, nor the metals, rails or industrials, Cramer admitted, but it's at least a start.
Finally, there was some better-than-expected same-store sales data from Chipotle Mexican Grill (CMG) , news that boosted shares 4.9%.
Add up all of these little positives and Cramer concluded that perhaps this is all we need to keep the rally in the stock market alive for a little while longer.
Off the Charts
In the "Off The Charts" segment, Cramer checked in with colleague Carolyn Boroden (@Fibonacciqueen) to learn about her take on the general direction of the stock market, as seen through her Fibonacci prism.
Using a weekly chart of the Dow Jones Industrial Average from 2014 through the present, Boroden identified a cluster of seven timing cycles all coming due next week, just in time for the inauguration.
While timing clusters don't always signal a change in direction, they are noteworthy. Boroden also identified a ceiling of resistance for the Dow just above the 20,000 level which may also make it harder for the averages to advance.
Turning to a weekly chart of the S&P 500, Boroden identified the same patterns, which a cluster of timing cycles all coming due in the next one to two weeks and a ceiling of resistance just above current levels.
While Boroden isn't calling a top in the market, she urged caution and perhaps some profit taking. Cramer agreed with Boroden's cautious tone, and said he'd watch out for the upcoming earnings season, which he called "tumultuous."
All the Chips on the Table
When it comes to the semiconductor sector, why does the market obsess about Nvidia (NVDA) ? That was the question that had Cramer scratching his head, as he called the market's focus on this single chip maker "repulsive."
As the most recent Consumer Electronics Show just proved, there is a lot of really important technology that relies on chips NOT made by Nvidia, a stock that rallied 220% in 2016. Chips from Texas Instruments (TXN) are built into a lot of devices that matter, Cramer said, and if investors want autonomous vehicles, they should be looking at Analog Devices (ADI) .
Nvidia may be No. 1 in gaming, but investors are missing out on the run in Advanced Micro Devices (AMD) , the No. 2 player in the space. And let's not forget about Broadcom (AVGO) , which makes the next generation of communications chips that all of our next devices and gadget will be using.
Cramer also gave a nod to Micron Technology (MU) , saying that sure, Micron is boom or bust -- but when it booms, it really booms. So, too, with Western Digital (WDC) , which has diversified into a premiere chip maker that also shouldn't be overlooked.
Cramer said its foolish to ignore the strong businesses at all of these chip makers.
Executive Decision: Edwards Lifesciences
For his "Executive Decision" segment, Cramer spoke with Michael Mussallem, chairman and CEO of Edwards Lifesciences (EW) , the medical device maker with shares up 176% since Cramer last checked in two years ago.
Mussallem said that Edwards' transcatheter aortic valve replacement business could grow to more than $5 billion by 2021, as heart disease still remains under-diagnosed.
Up until now, Edwards has only been treating the sickest patients, Mussallem noted, but with the clinical trials that are underway, they aim to prove that valve replacements are just as good, or better, than surgery for patients where heart disease has not progressed to severe levels.
Edwards is also working hard to educate and reeducate cardiologists, as the technology is advancing so rapidly that many doctors simply don't know what is now possible.
As for Edwards' business philosophy, Mussallem said that they don't believe that bigger is better, they believe better is better. There are so many opportunities to fix heart problems that Edwards sees no need to diversify into other areas of the body.
Cramer said he's liked Edwards for a long time and still likes the company today.
Cramer was bearish on Ensco International (ESV) , Alcoa (AA) , Skyworks Solutions (SWKS) , Teva Pharmaceuticals (TEVA) , Weight Watchers (WTW) , Kimco Realty (KIM) , Worthington Industries (WOR) , 2U (TWOU) and USG Corp (USG) .
Off the Tape
In his "Off The Tape" segment, Cramer sat down with Aaron Easterly, CEO of the privately-held Rover.com, a network of over 65,000 pet sitters and dog walkers that is capitalizing on the humanization of pets trend.
Easterly explained that only 8% of pet owners prefer taking their pets to a kennel while they're away, with the 92% searching for other options. Rover matches pet owners with pet sitters that offer services in caretakers' homes or in the customers' homes. His company provides extensive background checks and only approves about 20% of all applicants.
At its heart, Rover is a tech company, Easterly said, providing all of the technology needed for scheduling, billing and support services. The company is targeting 2018 for a possible stock market IPO.
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