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Great Expectations: Cramer’s ‘Mad Money’ Recap (Thursday 5/7/20)

It’s time to acknowledge that good things are happening without going into denial about the fact that bad things are still possible, Jim Cramer told his Mad Money viewers Thursday.

That’s a very tight line for Wall Street to walk, which is why Cramer said he would continue to keep cash on hand for when the next round of bad news hits.

Thursday’s rally was sparked by news that Moderna’s  (MRNA) – Get Report COVID-19 vaccine candidate is moving to Phase II testing. If a vaccine is indeed just around the corner, that sheds new light on the 3.17 million people who filed for unemployment this week. But that’s a big if, Cramer cautioned. Most vaccines take years to refine and make effective. Moderna would need to see everything go perfectly.

But investors are latching onto any reason to buy stocks. Many feel that April was the bottom for most industries, while others are betting on crude oil’s steady climb from its lows. Others are taking cues from stocks like Twilio  (TWLO) – Get Report, which shocked Wall Street with terrific earnings that sent shares surging 39%. 

As we partially return to normalcy, investors are also bullish on retailers like Home Depot  (HD) – Get Report, which may still have its lucrative gardening season this year. 

Cramer said we don’t know for certain if we are opening the economy too soon. We still don’t have enough testing to know for sure. The chance of secondary flare ups and quarantines remain possibilities, as does the chance Moderna’s vaccine will fall short in Phase II testing. 

That’s why it makes sense to keep cash on hand for the next round of bad news, Cramer said. While he is more optimistic now, it’s still too early to know anything for sure.

Cramer and the AAP team are looking at everything from earnings and tariffs 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.

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Executive Decision: Norwegian Cruise Line Holdings

In his first “Executive Decision” segment, Cramer spoke with Frank Del Rio, CEO of Norwegian Cruise Line Holdings  (NCLH) – Get Report, the cruise line which just raised $2.2 billion to finance its continuing operations amid the pandemic. Shares responded up 7.9% after plunging earlier this week on going concern fears. 

Del Rio said the financing deal was oversubscribed and Norwegian has all of the liquidity it needs to return to operations later this year. He said his company continues to work with regulators and health experts to ensure that its ships are clean and safe and ready for passengers sometime later this year.

Norwegian Cruise Line Holdings has three wholly owned subsidiaries: Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises. 

Norwegian fared better than other cruise lines and Del Rio credited the company’s quick action of getting passengers home safely and avoiding many of the troubles seen by their competitors.

When asked about the outlook for 2021, Del Rio noted that bookings are only down slightly from last year and pricing remains strong, falling only single digits. He said loyal guests trust the brands, which is why they haven’t come under public pressure like so many of their peers.

Executive Decision: Etsy

For his second “Executive Decision” segment, Cramer spoke with Josh Silverman, CEO of Etsy  (ETSY) – Get Report, the online marketplace with shares up 150% from their March lows.

Silverman said in a hard-hit economy, Etsy is providing people with a way to earn income and a place for buyers to find goods they can’t get elsewhere. He said when the CDC began recommending fabric masks, Etsy sellers rose to the challenge and within days there were thousands of masks available. So far, Etsy has sold $133 million worth of masks.

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Sales of other goods have increased as well. Silverman noted that non-mask sales grew by 79% this quarter. While some categories, like weddings, fell by 50%, other categories such as home furnishings, toys and gifts have all been strong as consumers want to support small sellers who are often working from home.

Silverman said long-term trends are being accelerated by the pandemic. Some people still don’t shop online, but after being forced to buy online, they’re trying it and liking it. 

Beyond Just Meat

When does a product become more than a product and become an ethos? It happened with Tesla  (TSLA) – Get Report. It happened with Chipotle Mexican Grill  (CMG) – Get Report. And it’s happening again with Beyond Meat  (BYND) – Get Report. After interviewing Ethan Brown, president and CEO of Beyond Meat, on Wednesday’s show, Cramer said he’s convinced that the move to plant-based protein is here to stay. 

The fact is that younger consumers and investors alike don’t trust the food chain, Cramer explained. The industrial food complex is riddled with disease, it’s inhumane, it puts stress on the environment and ultimately, beef just isn’t that healthy for you. 

Beyond Meat isn’t just a product, it’s a protein delivery system and it’s one millennials are embracing. And when it comes to investing, what younger people are doing matters more than what the older ones do. 

On Real Money, Cramer keys in on the companies and CEOs he knows best. Get more of his insights with a free trial subscription to Real Money.

Executive Decision: Square

For his final “Executive Decision” segment, Cramer checked in Amrita Ahuja, CFO of payment processor Square  (SQ) – Get Report with shares up 10% by the close as payments moved from bricks-and-mortar to peer-to-peer.

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Ahuja explained that Square comprises two different ecosystems. Their seller platform services small- and medium-sized businesses and this side of their business was extremely hard hit by COVID-19. Square has helped 45,000 customers apply for government assistance however, totally $520 million so far.

Many sellers have been resilient, however, Ahuja noted, moving toward contactless payments and online sales.

Square’s second ecosystem serves individuals with their Square Cash app. Square Cash has 24 million active customers as of the beginning of the year and Ahuja said they’ve seen a big rise in payments and charitable giving through the platform. Square has also rolled out new services such as bitcoin and fractional equity investing, bringing new customers to their service.

Lightning Round

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: 

Omnicom Group  (OMC) – Get Report: “This is a solid company and may be one of the last men standing.”

Wells Fargo  (WFC) – Get Report: “I do not like the bank stocks. They’re going to have a lot of bad loans if we don’t get a vaccine soon.”

CytoSorbents  (CTSO) – Get Report: “You’re fine with this one.” 

EPR Properties  (EPR) – Get Report: “That was a disaster of a quarter. I’m going to say no.”

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