Today was a big win for the stock market and investors should enjoy it, said Jim Cramer Mad Money Wednesday's audience. After months of upward comments on the economy, Federal Reserve Chairman Jay Powell made a sudden face and changed his mind about the rate of interest rate hikes.
Cramer said weeks that the Fed sees the economy badly without taking into account slowdowns in housing, cars, oil and retail. Powell's current moves, however, correspond to Cramer's one-and-wait strategy of interest rates – which means one more raised interest rate, then a pause for assessing economic data – reports that led to a large gathering.
Stocks managed to jump from bear to boom, Cramer said, with Salesforce.com (CRM) running a 10.2% charge and other FANG stocks with them. Amazon (AMZN) closed 6% and Apple (AAPL) ended the day by 3.8%. Other economically sensitive stocks, such as transport and industry, have also gathered, which is exactly what should happen on the bull market.
Investors are not out of the woods, Cramer said, as tariffs and trade will continue to dominate the headlines, and it is likely that President Trump will raise Chinese tariffs from 10% to 25% if no agreement is reached.
But now investors are no longer fighting Fed. Powell turned out to be a flexible leader, Cramer concluded, and we should all celebrate the win.
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Which stocks can hold?
Can Technological Supplies Keep a Sustainable Rally? Cramer said it depends on the stock. For DXC (DXC) technology, the answer is probably "no"
DXC was established almost two years ago after Hewlett-Packard's old firm diverted its IT consulting and merged with Computer Sciences Corp. DXC shares rose 59% during the first 18 months, but in the past two months they fell from $ 96 to $ 62 per share.
Initially, DXC achieved its numbers by reducing costs. The company later attempted to ignite growth by deflecting its slower growth in the public sector as Perspect (PRSP). As revenues continued to decline, investors began to worry that cost reductions are damaging DXC's ability to get new business.
Yesterday, DXC captured analysts' update, saying the company was low in value. Cramer, however, reminded the audience that stocks are not cheap at the time of revenue decline. He felt that stocks could be reflected in the short term as the overall market recovers, but in the long run, technology investors want a growth that DXC simply does not have.
Executive decision: Qualcomm
For executive segment, Cramer spoke to Steve Mollenkopf, Qualcomm CEO (QCOM), a profit of 25% in September. Shares currently reach 4.4%.
Mollenkopf explained that the upcoming 5G revolution will begin next year, and wireless operators will be able to offer ten times the 4G service at just 1/30 prices. This means that every company that has an Internet-connected device will benefit.
The launch of the 5G will be launched in the US and South Korea in the spring, Mollenkopf said. Europe will start mid-year and China in the second half of the year. There are many activities around the world to prepare for this introduction.
Mollenkopf added that the US is in a strong position to be a leader in 5G, but governments around the world are interested in the enormous opportunities it poses.
When Mollenkopf was asked to update on Qualcomm's ongoing legal battle with Apple, the two companies continue to work on a solution.
Cramer and the AAP team cut some of their weaker names into this market power. Find out what they are saying to their club members and join the conversation with a free trial of Action Alerts PLUS.
Linde and Praxair
Investors looking for winners in precarious environments need all the help they can get. Fortunately, our government is pleased to allow more companies to merge with their competitors.
There is nothing better for society than to be part of a perfectly legal oligopoly, Cramer said to the audience. Therefore, he is a fan of the Linde (LIN) industrial gas supplier, who has just received approval to acquire Praxair (PX). Linde gives Linde 32% market share because the US will now have only three major players in the universe.
We saw this model earlier in airlines. Air traffic has been very competitive in recent years, and airlines would be rid of business as a machine. The government then approved a number of airline mergers, resulting in 70% of all domestic flights being dominated by only four carriers. In fact, many years now have no competition at all.
The same applies to bottles and cans where Ball Corp. (BLL) to allow them to lose weight to their competitors, leading to a duopoly. Ball's shares increased 31% last year.
As for Linde, Cramer said, the company deserves to be a premium multiplier of 20 times the earnings and thinks the shares are only higher.
Another Threat: Non-bank Loans
Now that the Federal Reserve Bank has been aligned with interest rates, Cramer said it was sensible to look at what could still go wrong to derail the stock. One thing Powell worries about is non-bank mortgage lenders, and Cramer said he was scared. also.
Non-bank lenders now dominate almost half of the mortgage market, yet they play a different set of rules than traditional banks. When lending was out of control for the last time, the Fed decided to avoid regulating authority, which turned out to be a big mistake.
The Fed has the power to abolish risky lenders, Cramer said, with a decline in house sales, a rise in stocks and interest rates that forced the seller to drop their prices, those with floating rate mortgages would get into trouble, which could cause difficulties for this non-bank industry.
Before we go to the ministerial crisis again, the Federal Reserve must join, Cramer concluded.
In the circle of lightning, Cramer used to be the shares of the company Axon Enterprise (AAXN), Oneok (OKE), JPMorgan Chase (JPM), Delta Air Lines (DAL) and Acadia Pharmaceuticals (ACAD) in Berkshire Hathaway (BRK.A) .
Cramer was a bear on FNB Corp (FNB) and Copa Holdings (CPA).
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