The stock market managed to stage a “nice comeback” after stocks took a hit on a handful of negative headlines, CNBC’s Jim Cramer said Friday.
The Dow Jones plunged more than 271 points during the session as investors weighed renewed trade tensions between the United States and China, the world’s largest economies, alongside news that retail sales plummeted more than 16% in April.
The market swung up after data from the University of Michigan showed that U.S. consumer sentiment came in at 73.7 in May, up from 71.8 in April. The number was expected to fall to 65.
The Dow finished the trading day up almost 61 points, or 0.25%, at 23,685.42. The S&P 500 rose 0.39% to 2,863.70, and the tech-heavy Nasdaq Composite advanced 0.79% to 9,014.56.
“As unemployment keeps rising, I’m betting we’ll get more stimulus, more bonds bought, more money fleeing away from the market’s losers and into the winners, like the Cramer Covid-19 Index,” Cramer said on “Mad Money.” “That’s what works, unless we have a full-blown trade war with China, in which case all bets are off, even as I sure would have favored it before Covid decimated the U.S. economy.”
He went on to present his game plan in the trading week to come. All estimates are based on Factset data.
Tuesday: Home Depot, Walmart, Kohl’s
Home Depot reports first-quarter earnings before the market opens.
- Projected EPS: $2.27
- Projected revenue: $27.58 billion
“Home Depot should be talking about a strong spring, which, remember, is their Christmas,” Cramer said.
Walmart reports results from the first quarter of its 2021 fiscal year prior to the morning bell.
- Projected EPS: $1.13
- Projected revenue: $131 billion
“I’m betting Walmart will deliver fabulous digital growth, maybe even up to 35% [to] 40%,” he said.
Kohl’s releases first-quarter results in the morning.
- Projected EPS: -$1.60
- Projected revenue: $2.47 billion
“We’re not going to like what they have to say,” he said. “Of course, they’re finally reopening stores, which is good news, and I’m sure they’ll talk about pent-up demand, and I’m sure there’ll be buyers … and, you know what, sell. That’s your opportunity. Take it.”
Wednesday: Target, Lowe’s, Take-Two Interactive
Target‘s first-quarter report comes out in the morning.
- Projected EPS: 52 cents
- Projected revenue: $19 billion
“We know Target’s crushing it with their online business. I’m urging you not to focus on the margins,” Cramer said.
Lowe’s releases quarterly numbers for the first quarter before the market opens.
- Projected EPS: $1.32
- Projected revenue: $18.34 billion
“We need to keep hearing about [CEO] Marvin Ellison’s improvements in their digital division and maybe a great start to gardening season,” he said. “That would be enough for the stock to roar.”
Take-Two Interactive reports for the last quarter of its 2020 fiscal year after the closing bell.
- Projected EPS: 91 cents
- Projected revenue: $582 million
“I want to know how well their NBA 2K franchise does without the NBA,” he said. “CEO Strauss Zelnick was not happy with the last quarter, and I’m betting he won’t be disappointed twice in a row. This is a great time for video games.”
Thursday: TJX Companies, Best Buy, Medtronic, Hormel Foods, Nvidia, Splunk
TJX Companies reports first-quarter earnings at the open with a midsession conference call.
- Projected EPS: -2 cents
- Projected revenue: $5.76 billion
“I doubt we’ll like the headline numbers as their stores have been closed, nonessential, but TJX is opening up all around the country now, and with so many department stores going under, they’ll be able to snap up all sorts of great merchandise for next to nothing,” Cramer said. “I think it’s a buy.”
Best Buy releases first-quarter stats before the morning bell.
- Projected EPS: 57 cents
- Projected revenue: $8.29 billion
“I expect good things,” he said. “When I talk about how there’s only a handful of chains left after the pandemic, assuming the government does nothing else, I’m betting Best Buy’s one of the survivors.”
Medtronic reveals 2020 fiscal fourth-quarter results before the market opens for trading.
- Projected EPS: $1.06
- Projected revenue: $7 billion
Medtronic could be a “quandary,” he said. “So many surgeries are being postponed, so this might not be their quarter. Bizarrely, Covid-19 is causing a health-care bear market [due to] no surgeries. I’m not concerned, though. I do like it into weakness.”
Hormel Foods reports second-quarter fiscal 2020 results prior to the opening bell.
- Projected EPS: 42 cents
- Projected revenue: $2.37 billion
“I’m optimistic, but I do worry that, because they’re conservative, they say that what they have is a lot of Covid stockpiling, and now that that’s passed business might not be as strong,” he said. “That would be suboptimal.”
Nvidia reports first-quarter results for the 2021 fiscal year after the closing bell.
- Projected EPS: $1.66
- Projected revenue: $2.97 billion
“Nvidia may be the best stock in this market, save Shopify,” he said.
Splunk releases first-quarter earnings after the market closes.
- Projected EPS: -57 cents
- Projected revenue: $443 million
The “data analytics play tends to get hit when it reports because people don’t understand it, and then they sift through it the next day” and the buyers come back, he said.
Friday: Alibaba, Deere & Co., Foot Locker
Alibaba reveals fourth-quarter results for the 2020 fiscal year before the market opens.
- Projected EPS: 83 cents
- Projected revenue: $117.98 billion
“I adore Alibaba, the only Chinese stock I’m recommending on this show,” Cramer said. “This is the time for Alibaba.”
Deere & Co. reports 2020 fiscal second-quarter results in the morning with a midsession earnings call.
- Projected EPS: $1.82
- Projected revenue: $8.03 billion
“We keep hearing that farmers are hurting, and when they’re hurting, well, they’re not buying new equipment,” he said.
Foot Locker reports first-quarter earnings prior to the open.
- Projected EPS: 13 cents
- Projected revenue: $1.43 billion
“It’s a mall-based retailer and therefore it’s roadkill,’ he said.
Disclosure: Cramer’s charitable trust owns shares of Nvidia, Take-Two Interactive and TJX.
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