CNBC’s Jim Cramer said Friday that the stock market remains in a feeble position, the bond market is flashing a warning sign and the investment community should be prepared for more coronavirus uncertainty.
The Dow Jones Industrial Average, now in correction territory, fell more than 1,000 in intraday trading before staging a late rally to close Friday’s session down 357 points, or 1.39%. The 30-stock index dropped a total of 3,938.67 points in the past five trading days, capping off the worst week on Wall Street since the 2008 financial crisis.
Money managers unloaded their stock portfolios and put their funds in safe-haven instruments such as bonds, causing interest rates to fall near record lows. The benchmark U.S. 10-year Treasury yield — bond yields move inversely to prices — was last at 1.16%.
“In other words, the bond market’s screaming that the coronavirus is far worse than most people realize, global commerce will take a real hit and it might even be something similar to 2008 when all hell broke loose,” the “Mad Money” host said. “I can’t tell you whether the bond market’s right. I’m not an epidemiologist, but I know the markets.”
Cramer gave a preview of the corporate earnings and economic news that are circled on his calendar next week.
“Get ready for another rough day on Monday because I expect more COVID-19 shoes to drop this weekend,” Cramer said. “You’ve got to be ready for a snapback [rally], though, if we keep getting so negative.”
The below forecasts are based on analyst estimates, according to FactSet.
Monday: Tilray earnings
Tilray: $55.3 million in sales, 36 cents of losses per share
“The whole ganja group’s been put through the meat grinder,” Cramer said. “Tilray, in particular, [has] been a nightmare.”
Tuesday: Target, Kohl’s, Ross Stores, Veeva Systems earnings
Target: $23.4 billion in sales, $1.65 of earnings per share
The retail chain’s holiday sales fell well short of expectations. Cramer said he’s not expecting much from the quarterly report.
Kohl’s: $6.5 billion in sales, $1.88 EPS
Ross Stores: $4.36 billion in sales, $1.26 EPS
“That could be a bright spot,” Cramer said. “I bet it can hang in there, because these off-price chains tend to thrive in a weaker economy and the bond market says that’s what we’re headed for.”
Veeva Systems: $298 million in sales, 52 cents EPS
“If Veeva rallies, you can expect it to breathe new life into the whole cloud cohort,” Cramer said. “The cloud stocks have been acting terribly, until today, and many of them had excellent numbers. Maybe they can continue to go up if Veeva does well.”
Wednesday: Dollar Tree, Campbell Soup, Brown-Forman earnings
Dollar Tree: $6.39 billion in sales, $1.75 EPS
Cramer said “their last quarter wasn’t up to snuff, and I was disappointed. I’m not sure they can turn things around in three months.”
Campbell Soup: $2.15 billion in sales, 66 cents EPS
“Canned soup makes a ton of sense if the coronavirus becomes a full-blown pandemic, so I think their outlook could be bullish,” Cramer said.
Brown-Forman: $954 million in sales, 50 cents EPS
Splunk: $783 million in sales, 97 cents EPS
Zoom Video Communications: $237 million in sales, 8 cents EPS
Thursday: Kroger, Burlington Stores, Costco, Okta earnings
Kroger: $28.8 billion in sales, 55 cents EPS
Burlington Stores: $2.2 billion in sales, $3.23 EPS
“I bet the numbers will be excellent,” Cramer said.
Costco: $38.2 billion in sales, $2.07 EPS
“I expect great results. More important, I think you might get a solid outlook,” Cramer said.
Okta: $206 million in sales, 4 cents of losses per share
“I expect good things,” he said.
Friday: Jobs report
Stocks could sell off if there is an uptick in unemployment in the U.S. Labor Department’s nonfarm payroll report for February, Cramer said.
“I don’t think that will happen,” he said. “Unemployment tends to be a lagging indicator, but if it does … you might want to buy into that sell-off.”
Disclosure: Cramer’s charitable trust owns shares of Costco.
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