If you're going to keep riding the Trump rally, you'd better have conviction, Jim Cramer told his Mad Money viewers Tuesday, as the crosscurrents in the market are getting increasingly disruptive.
The stock market hangs on every word and tweet of president-elect Donald Trump, and that means when Trump says that the proposed cross-border tax Congress is working on is "too complicated," stocks like Constellation Brands (STZ - Get Report) and apparel maker PVH (PVH - Get Report) can rally, as they did today -- up 2.9% and 6% respectively.
Not all is doom and gloom however, as we are just days away from having the most pro-fossil-fuel president ever. That's why Cramer advised staying long oil and gas stocks. He remained bullish on UnitedHealth Group (UNH - Get Report) as well.
As for other sectors, like the airlines and the rails, Cramer said these stocks have already run and a pullback should be expected.
Have Your Cake and Invest in it, too
In the "Off The Charts" segment, Cramer checked in with colleague Bob Lang over the charts of several restaurant stocks that could be poised to gain in 2017.
Lang felt the daily chart of Popeyes Louisiana Kitchen (PLKI was among the strongest in the fast food group, with shares soaring after the election, only to consolidate afterward. The Chaikin Money Flow (CMF) is strong and the MACD momentum indicator just signaled a bullish crossover. If shares can breach their ceiling at $63, Lang felt $75 a share could be possible.
Like Popeyes, shares of Cheesecake Factory (CAKE - Get Report) have also been climbing since November, pulling back recently to their 50-day moving average. Lang noted that the CMF is still negative, signaling more room to run.
Lang was also bullish on Jack in the Box (JACK - Get Report) , which became overbought in December but has since pulled back. With a solid chart, Lang would be a buyer if shares break through their ceiling at $112.
Finally, Lang examined Panera Bread (PNRA , noting the stock was at an inflection point, but with more upside likely. Shares have a tough ceiling at $215 a share, but with a MACD crossover, $240 could be the next stop.
Cramer said he agreed with Lang, given these companies' strong fundamentals, especially Popeyes.
Do you have an appetite for more about these stocks? Read the full Off the Charts report.
In his "Off The Tape" segment, Cramer sat down with Bill Li, chairman and CEO of the privately-held Knightscope, makers of robotic security guards that give human security personnel extra sets of eyes and ears.
Li said that crime is a hidden tax we all pay and if technology can help reduce crime, then there will be savings in everything from housing and consumer products to insurance rates.
Knightscope's robotic units are offered in a "machine as a service" model that includes hardware, software, maintenance, data storage and more. Units operate for just $7 per hour, as compared to $25 an hour for human personnel and up to $90 an hour for armed personnel.
Knightscope's patrol robots are not designed to replace humans, Li noted, only provide them with extra data.
Consolidation vs. Competition in Tobacco Industry
The tobacco industry is shrinking, Cramer told viewers, and with today's announcement that British Tobacco (BTI plans to pay $49.4 billion for the remaining 58% of Reynolds American (RAI that it doesn't already own, it just got even smaller.
Cramer said the merger finally gives Philip Morris International (PM - Get Report) a formidable competitor. And that's why he now thinks Philip Morris should get remarried to Altria (MO - Get Report) -- to protect its dominance.
Investors may recall that Philip Morris and Altria split nine years ago. Since that breakup, shareholders have enjoyed a 118% gain. But Cramer argued that in today's environment, where size and scale matter, a merger makes a lot of sense.
A deal would not be easy, Cramer noted, as both companies are about the same size. But Altria has a stable, predictable cash flow that could help pay down debt after an acquisition, while the iQOS vaporizer from Philip Morris could be a big win here in the U.S.
Of the two companies, Cramer said Altria is the likely target and the one to buy.
What the Banks Are Telling Us
Sometimes, it's best to view the economy through the lens of individual companies, Cramer told viewers. That's why the earnings calls from Bank of America (BAC - Get Report) , JPMorgan Chase (JPM - Get Report) and Wells Fargo (WFC - Get Report) were so important, Cramer said. These banks are seeing lots of strength.
What makes the commentary from the banks so important? Cramer said it's because these companies have incredible scale in our post-financial crisis world. In fact, these three banks alone hold nearly a third of all U.S. deposits. So when JPMorgan sees strength both domestically and abroad, and Bank of America is seeing a rise in consumer banking, investors should take notice.
Cramer said some investors feel the market's post-election rally is nothing more than a sugar high, but these three earnings calls paint a completely different picture. That's why Cramer said he remains committed to the bank stocks and would be a buyer on any weakness.
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