Investors should expect one more day in “bizarro world,” where bad news is good news, Jim Cramer told his Mad Money viewers Thursday. That’s because tomorrow’s non-farm payroll numbers will be released when the markets are closed, which means Wall Street won’t get to react to them until Monday.
In bizarro world, Wall Street hopes for more unemployment, as that will encourage the Federal Reserve to keep interest rates low. Cramer’s game plan for next week begins on the reaction to these non-farm payroll numbers.
On Tuesday, Applied Materials (AMAT) – Get Report will hold an analyst day and Cramer said he expects strong results from all the semiconductor equipment makers. We’ll also hear from Paychex PAYX, which historically trades lower on their earnings reports.
Wednesday will be driven by the latest mortgage applications. Housing has a lot of momentum and that momentum should continue.
Thursday brings earnings from Constellation Brands (STZ) – Get Report, which may be weaker after the storms that clobbered Texas. Cramer expects good things from both ConAgra Foods (CAG) – Get Report and Levi Strauss (LEVI) – Get Report however, which also report on Thursday.
On Friday we’ll get the latest producer price index. Cramer warned investors should be prepared for signs of more inflation, but remember, the Fed is focused on unemployment, not inflation, at the moment.
Finally, Cramer issued a “mea culpa” after recommending Carmax (KMX) – Get Report recently. He said today’s 7% slide in the stock came as a surprise, as the auto market remains red hot, but not at Carmax.
Cramer and the AAP team are looking at everything from earnings and politics to the Federal Reserve. 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.
Executive Decision: Micron Tech
In his first “Executive Decision” segment, Cramer spoke with Sanjay Mehrotra, president and CEO of chipmaker Micron Technology (MU) – Get Report, which has seen their shares rise 23% so far in 2021.
Mehrotra said that Micron is very excited for all of their end markets, which are experiencing strong growth. Everything from PCs and smartphones to autos and data centers is in strong demand.
Mehrotra added that he supports President Biden’s infrastructure bill, which focuses on global leadership and competitiveness. Semiconductors are that the heart of everything, he said, and it’s important that our country focus on semiconductor development and production.
When asked about the risks of oversupply, Mehrotra insisted that Micron keeps its supply growth in line with their demand growth, and not just on a quarter by quarter basis. He said if you look at the current generation of DRAM chips, Micron saw strong profitability with 70% revenue growth and 40% gross margins throughout the entire cycle.
Executive Decision II: QuantumScape
For his second “Executive Decision” segment, Cramer also spoke with Jagdeep Singh, chairman and CEO of QuantumScape (QS) – Get Report, the electric vehicle battery maker with shares that rallied 10.1% today after the company achieved a technology milestone that unlocked additional investment from Volkswagen.
Singh said for EVs to succeed, we need to make cars that have better range with faster charge times that cost less, last longer and are safer. All of those things can be achieved by replacing lithium ion batteries with solid state components, which is what QuantumScape is working to achieve.
Singh added that he was encouraged by President Biden’s recent initiatives, however government policy isn’t enough to drive EV adoption. Ultimately, we need to make cars that people want to buy, and that means moving beyond current battery technology.
When asked about the additional investment from Volkswagon, Singh said that VW is one of the top car companies in the world and is going all-in on electric drivetrains. QuantumScape alone won’t be enough to power all of their ambitions, he said, but they hope to become a sizable portion.
QuantumScape has $1.5 billion on its balance sheet, a number Singh said is enough to fund their production plans through 2024.
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Executive Decision III: Hyzon
For his final “Executive Decision” segment of the week, Cramer checked in Craig Knight, co-founder and CEO of Hyzon, makers of fuel-cell powered trucks and buses, which will soon come public via a SPAC merger.
Knight said that while many people think of EVs as only battery electric vehicles, hydrogen fuel cells are also electric. It turns out that heavy trucks and fleet vehicles are ideally suited for fuel cell technology and they have great potential for widespread adoption.
Knight noted that in countries like New Zealand and Australia, fuel cells are already nearly even with diesel, and that fact will also soon be true in California and other markets. Hyson is not just a business plan, Knight said. The company is already producing and delivering its fuel cell vehicles to customers.
No Huddle Offense
In his “No Huddle Offense” segment, Cramer saluted Adam Aron, CEO of AMC Entertainment (AMC) – Get Report, for his masterful use of the capital markets to save his company from bankruptcy for a record six times.
Today, AMC announced a plan to issue an additional $500 million in new shares, over time, to help fund their operations through the remainder of the pandemic.
Shares immediately fell 8% on the news, but Cramer called the move “brilliant.” It wasn’t too long ago that shares of AMC were crushed by short sellers to below $2 a share. But then in February, the Wall Street Bets crew called the short-sellers’ bluff, sending shares over $20.
After retreating to $6, shares began to rise again, giving Aron the fuel he needs to raise capital to become the “last man standing” when the economy reopens.
Here’s what Jim Cramer had to say about some of the stocks that callers offered up during the “Mad Money Lightning Round” Thursday evening:
Caterpillar (CAT) – Get Report: “They’ve doe a great job. My hat’s off to them.”
Tesla (TSLA) – Get Report: “Tesla is a great stock that’s still going higher.”
Canaan CAN: “No. I’m not going there. I like Taiwan Semiconductor (TSM) – Get Report.”
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At the time of publication, Cramer’s Action Alerts PLUS had no position in the stocks mentioned.