The stock market's animal spirits have been triggered, Jim Cramer told his Mad Money viewers Tuesday. We're no longer in a bull market -- this market is a beast, created by a combination of deregulation, tax reforms and repatriation of overseas funds.
You can see the beast everywhere, Cramer said, including in the high-flying, high-growth FAANG stocks ( that would be Facebook (FB) , Apple (AAPL) , Amazon (AMZN) , Netflix (NFLX) and Google, now Alphabet (GOOGL) ), which were led by Netflix, up 4.7%. The semiconductor and cloud stocks were also reignited in the new year, with VMWare (VMW) , up 1.5% today, still a buy in Cramer's book.
There's also a beast emerging in the oil patch, with crude over $60 a barrel. That makes Schlumberger (SLB) a buy.
Even the beleaguered retail sector is seeing some lift, with Macy's (M) , L Brands (LB) and Best Buy (BBY) all exiting the holiday season with strong sales. E-commerce is also lifting the stocks of UPS (UPS) and FedEx (FDX) .
Cramer said many investors still seem to be bored with stocks, instead focusing on bitcoin. But you'd be hard pressed to find a point in history when equities had as much going for them as they do right now.
Over on Real Money, Cramer says the breadth of advancers is a sign this bull market remains healthy. Get more on his insights with a free trial subscription to Real Money.
Best Performers on the Dow in 2017
Should investors still pay attention to the Dow Jones Industrial Average? After all, the index is made up of just 30 stocks, far less than than S&P 500. Cramer dove into the top five performers in the Dow last year to find out. His conclusion? The Dow absolutely matters.
Boeing (BA) topped the list of Dow winners in 2017, up a staggering 89%. Cramer said this stock is not done heading higher as the order book at Boeing is bursting at the seams as more people are flying every year.
Second on the list was Caterpillar (CAT) , up 70% last year. Caterpillar used to be seen as just a proxy for growth in China, but now it's the company's U.S. business that matters. Cramer said this stock isn't likely to repeat its 2017 gains, but still has more fuel left in the tank.
Next up was Visa (V) , the financial stock to own if you're still scared of the banks. Visa tacked on 46% in 2017 and Cramer still sees a bright future ahead.
Fourth is Apple, an Action Alerts PLUS holding that still trades at just 15 times earnings. Cramer reiterated his buy on Apple, suggesting once again that investors just buy and hold the stock and not try and trade it.
Finally, there's Walmart (WMT) , up 43% the year before. Cramer said he thinks this company's investments in e-commerce will begin paying off and wouldn't be surprised if the stock gains another 20% in 2018.
Cramer and the AAP team are trimming Broadcom (AVGO) on strength. Find out what they're telling their investment club members and get in on the conversation with a free trial subscription to Action Alerts PLUS.
Off the Charts: 2018 Looks Great
In the "Off The Charts" segment, Cramer checked in with colleague Bob Lang to get a technical take on where the markets are likely to be headed in 2018.
Lang looked at weekly charts of both the S&P 500 and the Dow Jones Industrial Average, noting that the S&P didn't see a single losing month in 2017. The index only saw two modest pullbacks to its 20-week moving average and both were buying opportunities.
The Dow's chart also couldn't be more perfect, with the relative strength indicator and the Chaikin money flow both pointing to double-digit gains for this year.
Using his bottoms-up approach, Cramer said he agreed with Lang's analysis, saying that with this much momentum, 2018 is shaping up to be another stellar year for stocks.
To see the charts and read more of Lang's analysis, read Watch the Dow and S&P Soar: Cramer's 'Off the Charts'.
Driving Gains for the Used-Car Market
With the economy booming, the used-car market could be poised for a comeback, Cramer told viewers, and that means it's time to give Carmax (KMX) , AutoNation (AN) and newcomer Carvana (CVNA) a second look.
Shares of Carmax ended 2017 essentially flat, after delivering earnings last month that were good, but not good enough. Shares sold off on the news, presenting investors with a buying opportunity, Cramer said, because this company is about as consistent as they come, yet shares still trade at just 15 times earnings.
AutoNation hasn't been as solid a performer, Cramer noted, but the company did repurchase 9% of their outstanding shares to help ensure they exceeded analysts' expectations. Shares of AutoNation trade at 13 times earnings.
Cramer said that Carvana has a "neat" concept for selling cars, but still needs to prove itself. After a strong summer, the company missed top line estimates when they last reported. Cramer advised sitting on the sidelines for a few quarters until the stock's multiple of 30 times earnings can be justified.
In his "No Huddle Offense" segment, Cramer offered up his suggestions for the best way to play the oil patch now that crude is back above $60 a barrel, helped by both rising global demand and continued OPEC production cuts.
Natural gas remains troublesome, Cramer noted, as not even a cold snap in the Northeast has been able to move the needle. We simply have too much natural gas.
The oil service stocks and the drillers are also problematic, victims of their own technological success. When you can get so much oil from a single well, there's a lot less incentive to drill, Cramer noted. Only Schlumberger remains on Cramer's list.
Cramer said he'd avoid any oil ETFs, as those indices include the bad along with the good. He said the pipelines are among the most attractive oil names, with standouts like Magellan Midstream Partners (MMP) and Enterprise Product Partners (EPD) , his favorites in the group.
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