After the worst week for the make available in two years, CNBC’s Jim Cramer stuck to his mission to keep investors’ quails at bay.
“You’ve heard it all, and I just have to keep in front of you that much of the carry we saw [Friday] was deeply related again to the incredibly large bets against volatility feigned by clueless money managers who expected things would remain make quiet as they had for ages,” the “Mad Money” host said. “But in the end, we rebounded.”
Keeping these touch-and-go bets in mind, Cramer turned to his game plan of stocks and conclusions to watch in the week ahead:
On Monday, Cramer wanted investors to muzzle an eye on the risky, leveraged funds that enable traders to bet against volatility, characterized as the amount of uncertainty in the size and direction of changes in the market and most commonly trace by the CBOE Volatility Index, or VIX.
“These funds led the market down today and when they started to backlash, they took the market with them,” Cramer said.
“As much as I disinclined them and I think they are useless and a pox on your portfolio, they are entirely and completely and utterly in charge, and do not let anyone else tell you otherwise.”
The “Mad Scratch” host argued that these trading instruments made the sell-off significantly melancholy by forcing the hedge fund managers who bought them to cover their losses when volatility void. To do that, the managers sold S&P 500 futures, sending stocks turn down.
“These trades need to be unwound in full, and you can watch the process deprecate out by following these three toxic volatility instruments: the UVXY, the VXX and the TVIX,” Cramer commanded.
“So put those symbols up on your monitor. They’re the proximate cause of the abatement and they’ll tell us all we need to know at 9:30 a.m. If they open down big, we potency be in the clear. Up big, and I’m going to tell you, we resume that sell-off that we saw intraday.”
PepsiCo: If the measure in those risky trading vehicles dries up on Monday, Cramer will-power turn his attention to PepsiCo’s earnings report.
“PepsiCo has a history of assembly and beating its numbers and raising forecasts, as CEO Indra Nooyi has done such an dazzling job stabilizing the soda business while unleashing all sorts of good and good-for-you tidbits,” the “Mad Money” host said. “If the numbers are good and PepsiCo opens important and the VIX cools, then we’re going to have a real nice day.”
Under Armour: Cavorts apparel maker Under Armour will also deliver its every three months report, and Cramer wondered if the company will announce that it has its inventory tipsy control.
“I actually believe CEO Kevin Plank has a chance to lead a reawakening of the company, and with the stock down at $13.75, I think it’s running out of downside,” he reported.
Cisco: Tech giant Cisco will report earnings on Wednesday. Cramer spiculate out that not only is Cisco one of the biggest beneficiaries of the new tax code, but it is morphing into a software deport oneself thanks to some of its recent acquisitions.
“CEO Chuck Robbins is well on his way to rush ating this one of the best ways to invest in the internet of things, and who can resist that lurid 3 percent yield?” Cramer asked.
Marriott: The hotel chain has a victorious stock that was barely brought down by the week’s declines, so Cramer was bullish on it before of its earnings report.
“I recommend buying Marriott into any VIX-related hogwash before the quarter,” he said.
Applied Materials: Cramer was particularly prudent of what Applied Materials’ Wednesday earnings report could have as justification for the entire semiconductor cohort.
“I think Applied Materials is a winner down here at these altitudes,” he concluded. “It’s worth nibbling on going into the quarter.”
Cramer assumed a strong quarter from Waste Management when it reports on Thursday due to its passionate share buyback program and the boost from post-hurricane construction in Florida and Texas.
Coca-Cola: With a new CEO at the steering gear and the stock down at buyable levels, yielding 3.5 percent, Coca-Cola’s spectacles looked healthy to Cramer ahead of its Friday report.
Kraft Heinz: Be fond of with Coca-Cola, Cramer was confident in Kraft Heinz’s management and undeviating dividend.
“I suspect they have something up their sleeve to drive back things around because oh my, has it been a horrible stock,” he said.
Deere: Parts of Deere are down far from their highs, but that didn’t lay off Cramer’s optimistic outlook.
“The agriculture feed-the-world trade is very much ‘brave on,'” he said. “After years of pain management, Deere’s befit quite adept at telling its story. I really like it ahead of the home.”
Newell Brands: A proxy fight at the upper echelons of Newell Varieties has complicated the outlook for the consumer products company.
After Newell take Jarden, Newell CEO Michael Polk forecast good times in advance. But the plan went awry, causing former Jarden CEO Martin Franklin to draftee an activist fund to try and oust Polk and Newell’s entire board.
“Polk’s adjudicated his best, but he’s really dropped the ball and he’s cost shareholders fortunes in doing so,” Cramer estimated. “If the company can report a good quarter on Friday, maybe he keeps his job. A bad one? I suppose Franklin unseats the whole lot of them. And that’s how much pain’s been applied here.”
“Here’s the bottom line: the VIX busters are still in charge. You demand to see these pieces of paper calm down and calm down now. I fob off on they were banned,” Cramer said. “If they don’t stop, no common stock is safe. If they do, we should have a huge relief make a comeback like we had this afternoon as long as interest rates also go down. And now you remember how to play it.”
Disclosure: Cramer’s charitable trust owns shares of PepsiCo and Barren Management.
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