Cramer’s Crazy Money 3/21 Recap: Macy’s, Kroger, American Express
For anyone who is quick to criticize Federal Reserve Chairman Jay Powell for not moving fast enough, let’s not forget that these are unprecedented times, Jim Cramer told his Mad Mad viewers on Monday. Money. Two years ago, no one knew how long Covid would last, or what lasting effects it would have on our economy, let alone today’s parlor critics.
Powell is doing what is necessary, Cramer insisted, and told markets today that he was ready to get more aggressive on interest rates if needed. But with everything Powell faces, it’s no surprise he’s been cautious so far.
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The pandemic has brought about a work-from-home revolution that no one could have seen coming. Home builders continue to struggle to keep up with changing demands and everything that goes into a home has been caught in short supply. Changes in where people live have led to changes in what they drive, another market brought to a halt by semiconductor shortages on the other side of the world.
Add to that a war in Ukraine that interferes with food and energy supplies and it’s easy to see how Powell was asked to do the impossible. With so many variables and far too many unknowns, it’s impossible to get perfect interest rates. All we can ask for is what we got today, assurances that Powell will do whatever it takes to cool the economy without plunging us into a recession.
Get ready for the next rally
Now that last week’s powerful rally has passed, Cramer said it’s worth examining the factors that caused it. This way, investors can be prepared for the next rally, so they can reposition and strengthen their portfolios.
Last week’s rally was caused by a combination of factors. First, markets were already down sharply, making this a coil spring ripe for a quick rally. As stocks go down, they get cheaper, so buyout offers like Anaplan (PLAN) – Get the report from Anaplan, Inc. occur, sending shares up 27.6% in a single day.
The past week has also seen a shift in policy from China, which has been aggressively trampling on capitalism of late.
That’s why it never pays to be too negative, Cramer reminded viewers. The universe of buyable stocks may be smaller, but it still exists. He recommended Macy’s (M) – Get the Macy’s Inc reportDelta Airlines (DAL) – Get the report from Delta Air Lines, Inc. and American Express (AXP) – Get the American Express company report like only three names that are still purchasable.
Where are the winners?
With the Fed raising interest rates, the menu of winning stocks is shrinking, Cramer told viewers, but there’s one unlikely name winning big in this environment, and it’s Kroger. (KR) – Get the Kroger Co. report..
Kroger shares were up 23% for the year, driven by excellent execution and the continued trend to cook more at home. When Kroger last reported, they posted a profit of 17 cents per share that came from a 4% increase in same-store sales.
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Kroger is the largest pure-play grocer, with 2,726 locations in 35 states, giving it scale that matters. The company also derives 20% of its sales from its own private labels, which helps to increase its margins.
Kroger has also bolstered its omnichannel strategy with stores and distribution centers supporting pickup, delivery and online sales, making it the perfect recession-proof stock.
Executive Decision: Stifel Financial
In his “Executive Decision” segment, Cramer spoke with Ron Kruszewski, President and CEO of Stifel Financial (SF) – Get the report from Stifel Financial Corp.the fourth largest equity research firm in the country.
Kruszewski said Stifel is still not widely known, despite being a diversified company that includes a bank, wealth management, fixed income and research divisions. The company has grown from 600 advisors in 2005 to over 2,300 advisors today.
Asked about interest rates, Kruszewski noted that Stifel would see a 50% increase in net interest income with just three rate hikes, and most estimates now see up to six rate hikes in the pipeline. “The rate hikes are good for Stifel,” he added.
Stifel attracts some of the best talent in the business because it has a great culture that recognizes achievement, he said.
In the Lightning Round, Cramer was all bulls, citing PPG Industries (GPP) – Get the report from PPG Industries, Inc.AppFolio (APPF) – Get AppFolio Inc’s Class A ReportBerkshire Hathaway (BRK.B) – Get the Berkshire Hathaway Inc. Class B Report.star bulk carriers (SBLK) – Get the Star Bulk Carriers Corp report.Vaalco Energy (EGY) – Get the report from VAALCO Energy, Inc.American Plains Pipeline (PAA) – Get Plains All American Pipeline, LP ReportEnterprise Product Partners (DEP) – Get the Enterprise Products Partners LP report and True Financial (TFC) – Get the report from Truist Financial Corporation.
Cramer: Solving the New Energy Crisis
In his “No Huddle Offense” segment, Cramer denounced President Joe Biden for not doing enough to address the global energy crisis. Too many of our allies are dependent on Russian oil and gas, despite the fact that the United States is now the country’s largest oil and gas producer.
How is it possible ? Unnecessary regulations. America is full of clean natural gas, but no one wants to risk building an export terminal when they don’t know if pipelines will ever be built to supply it.
Then there is oil. Why does America import Russian oil? Because the long-standing Jones Act of 1920 stipulates that American oil can only be transported on American-made ships with American crews, flying the American flag. How many ships fit this description? Almost none.
Relying on Russian oil and gas is now a life-or-death situation for Europe, but the White House shows no urgency or willingness to take the simple steps it would take to fix it.
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