If there is one lesson Jim Cramer has learned this time around in earnings season, it is that retail cannot be held hostage by the shopping mall.
This became blatantly obvious to Cramer when Michael Kors reported what looked like good numbers on the surface, but when he dug deeper, he realized weak department store traffic led to a negative quarter and weak forecast.
“The conference call took my breath away,” the “Mad Money” host said.
Newell Brands, which sells lots of products in stores like Target, also said the mall was a challenge.
“It has gotten to the point where even mentioning the mall on a conference call is the kiss of death. They are dying shrines to spending the old way,” Cramer said.
Instead, it is based on earnings and the belief that companies can do even better.
“There is a lot of raw emotion when it comes to Trump and when people get emotional, even really smart professional money managers, they stop being able to analyze the situation objectively,” Cramer said.
There may be a correction one day, and Cramer recommended maybe investors should raise cash for that event. Maybe the president will tell the Chinese he is done tomorrow and they can’t sell in the U.S. anymore. That could cause a crash, Cramer said. Or maybe Trump calls for a Chinese boycott. That would bring down earnings.
“As far as I’m concerned, things are better and that, not Trump, might be the real secret sauce behind this extraordinary and very real rally,” Cramer said.
Shares of Centene soared more than 5 percent on Tuesday after reporting a strong quarter, including revenue up 89 percent year-over-year, and robust full-year guidance for 2017.
Centene is a healthcare provider that specializes in government-sponsored programs like Medicaid and Medicare. The company has done well under the Affordable Care Act, because the law included an expansion to Medicaid, which meant more business for Centene.
As the healthcare environment becomes murky amid Trump’s agenda to repeal and replace the Affordable Care Act, Cramer spoke with Centene’s CEO Michael Neidorff who said it could take years for that to happen.
“I have said all along that it is business as usual. We have insisted on continuing to do our thing the way we do it and it is working out very well. In fact, we told the Street today in our call that we actually have over $400 million that we will be paying back in on the risk adjuster this year,” Neidorff said.
Cramer has been puzzled by cybersecurity lately. Even though hackers were in the headlines constantly with one attack after another, cybersecurity stocks barely moved.
By the end of the year, the Purefunds ISE Cybersecurity ETF, with ticker HACK, finished the year up only 2 percent. That dramatically lagged the 9.5 percent gain of the S&P 500.
However, so far this year HACK has come alive and is now up 8 percent. Cramer thinks the theme is here to stay, as businesses and governments need to keep spending to prevent data breaches.
Some of the younger technology stocks were red-hot on Tuesday, but Cramer said some of the old-school tech plays still have life in them.
To figure out what the charts predict for these stocks he spoke with Tim Collins, a technician and colleague of Cramer’s at RealMoney.com.
One chart Collins looked at was for Oracle, which surprisingly had the strongest trend of all three old-school tech names. He thinks it could be ready for a powerful break out of its $40 ceiling if resistance that has held it back.
Ideally, Collins would like to see Oracle close above $40.50, which would indicate an all-clear trigger to buy the stock. He thinks he could rally up to $43.50 with a possibility of going to $45.
In the Lightning Round, Cramer gave his take on a few stocks from callers:
Barclays: “I think there is more [of a gain]. I like these European banks. By the way, don’t forget, my new favorite spec is Banco Santander.”
Express Scripts: “Too risky. I like UnitedHealth in that group. That is my play, I am not deveating from it. I don’t need to go down. I know Cardinal had a good number today, and god bless them. UnitedHealth.”