CNBC’s Jim Cramer said the Labor Department jobs report on Friday satisfied markets, at least for the meantime.
The U.S. economy added 379,000 jobs last month and the unemployment rate gradually declined, with stocks managing to jump from their lows and end a difficult three-day trading period to end the week at a high level.
Economists had predicted that the labor market would grow by 210,000 in February.
“A strong, but not too strong, employment figure was just what this crazy market needed today, although it took Wall Street half a day to find out,” Cramer said after the conclusion of “Mad Money.”
The major stock indices all swung nearly 2% higher at close after trading in the red in the morning. The Dow Jones Industrial Average rose 572 points, or 1.85%, to close at 31,496.30, which is an increase of 1.82% after a volatile week. The S&P 500 rose 1.95% to 3,841.94 on Friday, also ending the week in positive territory.
After closing in the red on Thursday, the Nasdaq Composite bounced 1.55% to 12,920.15 on Friday. The tech-heavy index ended the week down 2.06% as growth stocks sold.
As the US continues its recovery from last year’s coronavirus-induced business disruptions and restrictions, the February labor report likely hasn’t done enough to push the Federal Reserve to raise interest rates to dampen inflation as the economy grows, Cramer said.
“It was a hidden Goldilocks report: Many more people are being hired, thanks to the introduction of vaccines and the reopening, but not so many that the Fed will feel compelled to raise interest rates, and some are really lagging behind,” says he. he said.
Wall Street is on standby to see if the uptrend will continue or if the downtrend in stocks will resume. However, the bond market is still in control, as investors continue to rotate from high-growth stocks to value and cyclical names until rising government bond yields stabilize, Cramer added.
Longer-term treasuries determine the interest on loans. Higher interest rates make cyclical stocks more attractive, reducing investors’ appetite for riskier assets.
“I bet the bond bullies will be back, so get ready by using rallies like this one to cheer up, like we did at the end of the day for my charity, and certainly to lighten the high-flying dreamer stocks. and the SPACs, ”he said. “That way you have some money to put in for the real businesses the next time we get hammered like yesterday afternoon.”
Cramer gave his game plan for the coming week. Earnings per share forecasts are based on FactSet estimates:
Monday: Stitch Fix
- Q2 2021 earnings announcement: after market; conference call: 5:00 pm
- Expected losses per share: 22 cents
- Expected Sales: $ 512 million
“A great quarter won’t cause the explosive reaction we got last time,” Cramer said. “Still, I bet the numbers are better than expected because this is a great company.”
Tuesday: Dick’s Sporting Goods
- Q4 2020 Earnings Disclosure: Before Market; conference call: 10 am
- Projected Earnings Per Share: $ 2.30
- Expected Revenue: $ 3.07 billion
“I expect Dick’s to deliver a really strong song, one that can make the stock fly,” he said.
Wednesday: Campbell Soup, Oracle
- Q2 2021 Profit Disclosure: Before Market; conference call: 8:00 am
- Expected earnings per share: 83 cents
- Expected Revenue: $ 2.3 Billion
“They haven’t impressed these pantries so far,” Cramer said. “I can’t argue with the prevailing wisdom here, although I think this company has won enough of those back home with its snack offering so you won’t be so disappointed, and you’re getting that 3.2% yield.”
Oracle
- Q3 2021 earnings announcement: after market; conference call: 5:00 pm
- Projected Earnings Per Share: $ 1.11
- Expected Income: $ 10.05 billion
“This is exactly the kind of lower-risk technology stocks that people suddenly love … [as opposed to] the high-flyers, “he said.” Those are still being torn to pieces, so I was ready to recommend Oracle [tonight], but I was defeated. A big real estate agency pushed it today, sent the stock up 6%, stole my thunder. “
Thursday: JD.com, Ulta Beauty
- Q4 Profit Disclosure: Before Market; conference call: 7 am
Cramer said JD.com is “one of the few Chinese stocks that I like because it’s another ‘Amazon of China’ thing. It’s like Alibaba, which you know I like, but it has faster growth. “
Ulta beauty
- Q4 earnings disclosure: after market; conference call: 5:00 pm
- Projected Earnings Per Share: $ 2.32
- Expected Revenue: $ 2.07 Billion
“It’s about to experience a sales explosion when the country reopens. Ulta turned to ecommerce when the pandemic hit … but now that we’re getting vaccinated, their physical business may be making a comeback,” he said. They’re also releasing a new Target collection. I would be a buyer for that quarter. ‘
Disclosure: Cramer’s charity trust owns Amazon stock.
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