Investors ‘old guard’ is back in charge

Investors are showing optimism about the introduction of the Covid vaccine, CNBC’s Jim Cramer said, and it sparked a rally in US stocks on Friday.

The Dow Jones Industrial Average added 453.40 points, or 1.4%, while the broad S&P 500 advanced 1.7% to close a record. The tech-heavy Nasdaq, after falling 0.8% at one point, ended the trading day higher at 1.2%.

“Virtually every sector saw aggressive buying, except for the once popular, very expensive and hard to understand tech stocks,” said the host of “Mad Money.” “I think it’s all about the ‘Grand Reopening,’ as the United States will receive 240 million vaccines next week from Moderna, Pfizer and J&J as they increase.”

The increased availability of vaccines means that bottled consumer demand is making its way into the economy sooner than expected, Cramer said. He pointed to L Brands – the owner of Bath & Body Works and Victoria’s Secret – which raised its first-quarter earnings outlook on Friday. Shares of the company were up more than 3% during the session.

“The reopening of the trade is casting a big net,” said Cramer. “I think the buying was so powerful that it obscured the endless liquidation of stocks once loved by younger buyers,” he added.

It’s not clear exactly where the new entrants went, Cramer said. Nevertheless, he said, it appears that “the old guard is back in charge.”

“For once, the ‘Grand Reopening’ transaction felt like a huge positive point today … with many winners and very few losers,” he added. “If that’s the new normal, call me a happy camper, but let’s see if it holds up next week.”

Cramer offered his game plan for the upcoming earnings list:

McCormick & Company

• Results first quarter financial year 2021 before the bell; conference call at 8 p.m. ET
• Expected earnings per share: 59 cents, according to FactSet

“We are going to learn how much this company is thriving under the ‘Grand Reopening’.” Here’s the problem: McCormick has a huge hospitality business serving restaurants, and that’s been a real dog, “Cramer said.” But the stock has had a fantastic run over the past year as the consumer business thrived under the stay-home economy. Now I think people will assume that the proportion has run its course now that we vaccinate more than 2.5 million people. per day.”

PVH

• Fourth quarter 2020 results after the bell; conference call at 9 p.m. ET Wednesday
• Expected loss per share: 32 cents, according to FactSet

Lululemon

• Fourth quarter financial year 2020 results after the bell; conference call at 4:30 p.m. ET Tuesday
• Projected Earnings Per Share: $ 2.49, according to FactSet

“After the close, we hear from a clothing company considered a victim of the pandemic, PVH, and one widely seen as a Covid winner, Lululemon,” said Cramer. “I think the market has decided this is PVH’s time to shine – it’s been roaring seriously since the introduction of the vaccine. Lulu, on the other hand … it’s been shunned because everyone sees their stuff as the kind of casual clothes you wear when you stay home from work and no one is looking at you. Let’s see what they have to say. ”

Tough

• Fourth quarter 2020 results after the bell; conference call on Tuesdays at 5:00 p.m. ET
• Expected loss per share: 10 cents, according to FactSet

BlackBerry

• Fourth quarter 2020 results after the bell; conference call at 5:30 p.m. ET
• Expected earnings per share: 3 cents, according to FactSet

Both Chewy and BlackBerry are stocks favored by investors who gather on online forums such as Reddit’s WallStreetBets, Cramer said.

“The WallStreetBets crew loves Chewy because it was co-founded by Ryan Cohen. He’s the man with a plan to flip GameStop from his place on the board,” Cramer said. “As for Blackberry, it’s one of the meme stocks that caught fire in January thanks to a short press triggered by Reddit. I don’t see the appeal. Maybe the quarter could change your mind. Don’t hold your breath.”

Walgreens Boots Alliance

• Fiscal results for the second quarter of 2021 before the bell; conference call at 8:30 a.m. ET
• Expected earnings per share: $ 1.13, according to FactSet

Walgreens’ new CEO, Rosalind Brewer, is “one of my absolute favorite executives,” said Cramer. Hopefully she’ll tell us some of her plans to boost sales. Brewer is from Starbucks, where she was the COO, and speaking as someone who owns Starbucks for my charity trust was a real blow.

Micron

• Results second quarter financial year 2021 after the bell; conference call at 4:30 p.m. ET
• Expected earnings per share: 93 cents, according to FactSet

“I also can’t wait to hear from Micron after the close. I think both business lines – which is DRAM and Flash – are humming. I expect the numbers to rise significantly. The stock seems to be anticipating that,” Cramer said .

From Dave & Buster

• Fourth quarter 2020 results after market close; conference call at 5:00 p.m. ET
• Expected Loss Per Share: $ 1.29, according to FactSet

“I suspect the stock will respond well no matter what because it’s such a clear reopening game. We’ve seen it with Darden,” Cramer said, referring to Olive Garden’s parent. “I thought everyone knew Darden was going to be good. [The stock] still went higher. … I expect the same story from Dave & Buster’s. “

CarMax

• Fiscal fourth quarter 2021 before the bell; conference call at 9 p.m. ET
• Expected earnings per share: $ 1.26, according to FactSet

“I think this will be the best quarter of the week out of all these things. This will be the best because CarMax mainly sells used vehicles,” said Cramer. “At the moment, the automakers continue to throttle production because they can’t get enough semiconductors, so more and more people are buying second-hand and that’s driving prices up.