After Amazon, Alphabet, Microsoft and Intel strongly capped off a busy week of earnings, CNBC’s Jim Cramer said the action in their stocks told an important story about this market.
“I think it’s all business as usual, except with some incredibly large-capitalization companies as the focus,” the “Mad Money” host said. “Businesses that deliver amazing results get rewarded immediately with wholesale revaluations.”
That made Cramer wonder whether the market could see an encore, so he turned to the stocks and events he’ll be watching as the last of the big-cap stocks he follows report.
Cramer’s pick of the week is financial services giant Mastercard, which will report its earnings before Tuesday’s opening bell.
“I believe that CEO Ajay Banga will put up some amazing numbers and even though the stock’s already up 44 percent for the year, I think … Mastercard can still head higher,” Cramer said.
Cramer was blown away by the hugely positive earnings reports from the market’s top technology companies that tricked in after Thursday’s bell.
“Who did the best job? Who stole the show? Was it Amazon? Was it Alphabet? Maybe Intel. Could be Microsoft. The answer? All of them, and all for different reasons,” he said.
As personal computers — Intel’s bread and butter — fall back into relevance as a way to access the web, Cramer said other consumer patterns are also changing around this secular trend.
Now, many consumers’ jobs and lives revolve around smartphones, and the data center functions as the “central nervous system” of the world’s communications, Cramer said.
“These firms are all integral to that setup, which is why they can make a fortune here,” the “Mad Money” host said. “Credit to Amazon for seeing it all coming ahead of everyone else. Credit to the other guys for playing catch-up rather than give-up.”
With investors more interested in cyclical stocks that do well when the global economy is growing, Cramer revisited Coca-Cola to check on the beverage maker’s prospects.
Shares of Coca-Cola are hovering around their 52-week high, but as money flows out of consumer stocks and into industrial and technology names, Cramer figured things will only get more difficult for the soft drink maker.
“But I think there’s something that these guys can do to control their own destiny,” Cramer said.
Cramer said the beverage giant needs to do a deal, “any deal,” so he suggested Coca-Cola fully acquire its partner, Monster Beverage, in which it already has a 16.7 percent stake.
A recent Chinese ban on waste imports shouldn’t drastically affect business at Waste Management for three reasons, CEO Jim Fish told CNBC on Friday.
First, Waste Management doesn’t send the 24 banned recyclables to China, but elsewhere, Fish told Cramer in an exclusive interview.
“The second is the Chinese government has not re-issued these import licenses. That is having an effect, but fortunately for us, we have a broad array of customers outside of China – India, Thailand and Vietnam – so we’re able to diversify a bit when things like this happen in China,” the CEO said, adding that this kind of move was not unexpected for China.
Finally, China has instated quality controls, sending inspectors to look at Waste Management’s facilities, but Fish wasn’t worried.
“We always kind of say that we have the best material going overseas. There’s an old saying that he who has the best boat survives the storm, and we think we have the best boat here,” he said.
Uber isn’t the only company picking up on the benefits of dynamic pricing, or charging customers based on the volume of demand a service is getting at a given time.
Rick Stollmeyer, the co-founder, chairman and CEO of software company Mindbody, told CNBC on Friday that every service should use dynamic pricing.
“Dynamic pricing is how every experience and every service should be priced. The value of getting a car ride from midtown Manhattan at 2 a.m. on January 1st is a whole lot higher than the value of that same car ride on an average summer afternoon. And the same thing is true for the services that are offered on our platform,” Stollmeyer told Cramer.
Mindbody, which provides a cloud platform for businesses in the wellness space to perfect their online offerings, connects customers with fitness classes, salon and spa appointments and other health-related experiences.
“All of those things have a value and a demand that changes with time,” the CEO said. “There are tens of millions of people that want to [take] those classes, to live a healthier, happier life. So dynamic pricing is going to help to bring in those people with price points that drop during times of lower demand, but also, price points that can surge during periods of high demand.”
In Cramer’s lightning round, he rattled off his take on some callers’ favorite stocks:
J.M. Smucker Co.: “I’ve been against that. I mean, it’s a nice company, they’re very well-run, but it’s in the wrong sector and they’re not doing the job. [On] J.M. Smucker, I am still saying don’t buy.”
JetBlue Airways Corporation: “You want to buy Southwest Air. It’s down and it shouldn’t be down this much. It’s an ActionAlertsPlus club name. The stock got pulverized. We sold some at $59. It’s back to $54. Pull the trigger on that one.”
Disclosure: Cramer’s charitable trust owns shares of Alphabet, Waste Management and Southwest Airlines.
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Source: Tech CNBC
Cramer Remix: Mastercard is my stock pick of the week