Traders will continue to buy and sell in the headlines of the day, said Cramer, but investors need to stay focused on what matters – the state of our economy. He said it would be a mistake to buy stocks after Monday’s strong move, even with your 401 (k) or retirement money. Today’s earnings are likely to evaporate on the next wave of bad news – and this may be the time to jump.
The King’s Cloud Rally, a favorite of Cramer’s, must be viewed as suspicious and assessed on a case-by-case basis. Cramer preferred stocks of data center equipment such as Western Digital ((WDC) – Get a report, as an alternative investment. He also blessed owning Amazon ((AMZN) – Get a report, which does not present the advertising risk of Google ((GOOGL) – Get a report. Even Apple ((AAPL) – Get a report must be bought opportunistically, on a hindsight.
Regarding sectors outside of technology, Cramer said there is little to like in retail, even with home improvement stores like Home Depot ((HD) – Get a report and Lowe’s ((LOW) – Get a report, which may miss the entire spring gardening season. It was bearish on banks, home builders and industrialists as well, given the level of uncertainty we still see in the economy. This uncertainty extends particularly to oil and gas stocks, as we are almost out of places to store our excess oil.
Cramer said he will be more optimistic when we have more Covid-19 tests and less fear of getting sick, but it will be a spike in unemployment that will really signal when the bull is back.
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Executive decision: Zoom
For his first segment “Executive Decision”, Cramer spoke with Eric Yuan, founder and CEO of Zoom Video Communications ((ZM) – Get a report, the online meeting provider that is under scrutiny for its security practices.
Yuan said that in the past few weeks, Zoom has seen an increase in the number of new users and new use cases. The company is working hard to inform these new users of their security settings so that everyone can use their service safely. They are working particularly hard with school systems across the country so they can continue to use Zoom for online education.
When asked about end-to-end encryption, something security researchers have said is missing on the Zoom platform, Yuan noted that end-to-end encryption is enabled, many features popular, such as calling meetings over the phone and recording in the cloud, would not be available.
Yuan responded to criticism that Zoom meetings are routed through Chinese servers, saying that only in rare cases should traffic cross China. He also said that the trend of “zoom bombing” of inviting uninvited guests to attend meetings can be countered by applying best practices.
Yuan will host a webinar later this week to discuss best practices and any issues raised by security professionals.
The home economy may seem temporary, Cramer told viewers, but working from home has so many benefits that he could be here to stay. This means that a whole new harvest of home stocks could recover for years to come.
Cramer said investors already know about Zoom Video and Amazon’s web services, but may not know all of the food stocks that work as well. Cramer reiterated purchase from Constellation Brands ((STZ) – Get a report, the beer and wine giant with shares up 19% in the last two weeks, and on ConAgra Foods ((CAG) – Get a report, which continues to see its products leaving the shelves of grocery stores.
But there are others in the home food space. Cramer adds General Mills ((GIS) – Get a report to the list, with Hormel Foods ((HRL) – Get a report. He said Chewy ((CHWY) – Get a report is the logical choice in the field of pet food and nobody does better than PepsiCo ((DYNAMISM) – Get a report, which owns Frito-Lay.
In terms of delivery, Domino’s Pizza ((DPZ) – Get a report has a lot to gain, noted Cramer, and for takeout, no one beats Chipotle Mexican Grill ((CMG) – Get a report, which has been strengthening its online prowess for years.
REITs are worth seeing
Investors looking for relatively safe stocks that can work even in this challenging environment can selectively consider a REIT, Cramer told viewers. While REITs have become one of the most hated sectors and are largely untouchable, Cramer has identified a handful that deserve to be examined.
Office REITs remain untouchable, Cramer said, but Alexandria Real Estate Equities ((ARE) – Get a report is different. This company focuses exclusively on campuses for science and technology. When the pharmaceutical and biotechnology industry needs a campus, they’re looking for Alexandria. Stocks are down 22% from their peak.
Next, Cramer recommends Crown Castle ((CCI) – Get a report, the REIT cell tower with a yield of 3.2%. Cramer said he still likes T-Mobile ((TMUS) – Get a report and Verizon ((VZ) – Get a report before the 5G wireless buildout.
Finally, Cramer said that data centers are a secular growth trend and here he likes Digital Realty Trust ((DLR) – Get a report with its yield of 3.2%,
Equinox ((EQIX) – Get a report and CoreSite Realty ((HORN) – Get a report with its yield of 4.2%.
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At the time of publication, Cramer Action Alerts PLUS had a position in AMZN, AAPL, GOOGL, PEP.