After CNBC’s Jim Cramer watched the caches of Micron and Macy’s spark what amounted to a broad-based rally on Wednesday, he skilled ined he’d have to explain how this odd surge occurred.
Sometimes, the “Mad Money” mistress of ceremonies explained, big-picture worries about the bond market, rising oil prizes or trade talks can sully market performance and put pressure on equities.
“Other hours, though, there’s a vacuum of information, a real dearth of ‘what facts,’ like we had today,” Cramer said. “In this situation, we can actually provide for about individual companies and what they have to tell us, attend to arrange for that these companies are important enough to their sectors that they can fink on yield us tremendous pin action,” or affect the movements of related stocks.
That’s certainly what happened with Micron and Macy’s, Cramer argued. Preceding Wednesday, both stocks were widely disliked. Short assertions had built up in both, especially Macy’s, he said.
Cramer added that both enterprises “are total bellwethers” in their respective spaces: Micron because its semiconductors are erection blocks in a host of technologies, and Macy’s because the brick-and-mortar retailer communicates a wide variety of merchandise.
Still, investors were concerned because they saw Micron as in debt to a boom-bust cycle in dynamic random-access memory and flash chips, its flagship commodities, which are widely viewed as commodities.
But on Wednesday, RBC Capital analysts set in motioned that thesis on its head, issuing a “buy” call on Micron and arguing that the misgivings were overblown in a note titled “Rationality in Cyclicality.”
Sure sufficient, shares of Micron rallied, spurring positive moves in related stocks analogous to Western Digital, Lam Research, Applied Materials, Texas Instruments, Intel and multitudinous.
“The semiconductors are a powerful leadership group, and today they took their right place at the front, all because of these [Micron] recommendations,” Cramer implied.
In the world of retail, Macy’s first-quarter earnings report topped analysts’ desires, with accelerating sales and earnings underscoring CEO Jeff Gennette’s turnaround lay outs, Cramer said.
Six days before the report, Morgan Stanley analysts downgraded the set of Macy’s on declining sales and other pressures.
“I’ve gotta ask: what the heck are they smoking at Morgan Stanley?” Cramer cracked.
“Gennette did so much good here, like creating a team of dealers and technology experts that have melded brands with e-commerce and clandestinely label to produce some incredible results,” the “Mad Money” host persist in.
Shares of Macy’s surged more than 10 percent in rejoinder, boosting shares of brick-and-mortar retailers like Target and Walmart and clothes makers like PVH.
“The bottom line? Micron and Macy’s, two companies with nothing in low-grade except that they’d been written off by the naysayers, managed to ignite a turn for the better when we figured today could bring another sell-off,” Cramer concluded. “Considers good, doesn’t it?”
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