After a year of an commonly unpredictable administration, CNBC’s Jim Cramer was heartened to see President Donald Trump turn over a measured, predictable State of the Union address.
“It’s ironic, but this president does, still, know what the stock market wants from him: it wants cheerleading, assorted defense dollars, less regulation, especially when it comes to big topic, and, of course, lower taxes,” the “Mad Money” host said.
Trump hand overed investors a bullish take on the market layout, touting the $8 trillion in supply market value added since the election, pledging more defense expending and talking up a $1.5 trillion infrastructure plan.
Given the optimism, Cramer short down the speech into actionable parts so investors could get in on the “rodomontade per share.”
The biggest beneficiaries were defense stocks, Cramer imparted, taking into account Trump’s repeated vows to support U.S. associates and strengthen the military.
“Suggested buys? Lockheed Martin off the fighter jet franchise, Harris for the trannie and communications business [and] Raytheon for Patriot missiles, which our allies can’t get ample supply of,” Cramer said.
Trump also touched on infrastructure (albeit hazily), calling on Congress to push forward a “desperately” needed plan to “rebuild our fragmenting infrastructure.”
Cramer noted that there are formidable barriers to construction infrastructure in the United States. At the state level, environmental impact affirmations or courts can block most projects. At the federal level, Congress seems unwilling to waste on infrastructure for a variety of reasons.
“If Trump can get around this, well, that purposefulness be huge for Caterpillar [and] United Rentals,” Cramer said. “As it is, though, the talent in those stocks has more to do with commodity rallies and the strength in construction in [the] secret sector than anything happening in Washington.”
But if lawmakers were to make inquiries through on infrastructure, industrials like steel producer Nucor could perks even more than they already have, the “Mad Money” assembly said.
After speaking with Nucor CEO John Ferriola on Tuesday, Cramer imagined the strength of its last quarter and the company’s new $250 million steel wander could take the currently cheap stock even higher if Trump were to kick-start nationwide rebuilding.
“Most superbly of all, the State the of the Union had no surprises,” Cramer said. “If your only litmus analysis for the presidency is higher stock prices, boy, was this a great speech. As for all the other effects, I’m really glad to say it’s not my department.”
Disclosure: Cramer’s charitable trust owns cuts of Nucor.
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