“That’s what I’m concerned about here — the perception that rate hikes could do a lot of damage. That’s what we need to get through if we want the market to advance further, and by pointing it out I’m simply trying to prepare you for the coming news cycle,” the “Mad Money” host said.
And the market’s perception of what frequent rate hikes could do has the power to outweigh the reality, Cramer contended.
When rate hike cycles speed up, the risk arises that rates could tighten too quickly, Cramer said. He nodded to the 2000s, during which the Fed raised rates 17 times, which helped bring about the 2008 financial crisis — something that news organizations will talk about if the Fed hikes, he said.
While rising interest rates could have a profound effect on real estate prices, one real estate investment trust (REIT) called Prologis is likely to see its business continue to grow, its CEO Hamid Moghadam told the “Mad Money” host on Tuesday.
Prologis specializes in properties devoted to logistics, operating warehouses and distribution and fulfillment centers for e-commerce giants including Amazon.
“If you believe e-commerce’s penetration, it’s really good for us,” Moghadam said, adding that Prologis has been building multi-story centers in cities to serve the massive demand for goods ordered online.
“I’ve been doing this for 35 years. This is the lowest vacancy rate I’ve ever seen,” the CEO said.
And retail isn’t the only sector thriving. Nucor, the biggest U.S. steel manufacturer, has seen its stock rally 18 percent since the election.
Cramer noted that expectations that President Donald Trump will implement a $1 trillion infrastructure spending plan are running high, but Nucor CEO John Ferriola told the “Mad Money” host on Tuesday that Nucor will continue its business abroad despite Trump’s “America First” rhetoric.
“Our joint venture in Mexico will be supplying galvanized steel to those factories that are already there,” Ferriola said. “I would point out that we will be supplying about half of that … from the United States. Two hundred thousand tons of steel produced in America, by American workers, we will export to Mexico. So this is actually an export opportunity creating American jobs.”
But as markets hit all-time highs from burgeoning animal spirits rather than solid fundamental data, Cramer finds solace in technical charts, which can help stock-pickers play the market in uncertain times.
“In a confusing time for the stock market, it’s important for you to have some touchstones you can fall back on,” he said, pointing to charts from technician Carolyn Boroden that look at Facebook, Apple and Tesla as some high-profile examples.
Boroden focuses specifically on five- and 13-day exponential moving averages, or moving averages that give more weight to recent data. That helped her determine that Facebook and Apple surged since 2016 and are still running, while Tesla has been a sell signal since February.
When Cramer started as the host of “Mad Money,” he said the show was a stock-picker’s paradise in a raging bull market.
But as the show evolved, Cramer realized viewers wanted to hear more about how to analyze stocks — dive deep into the underlying companies and technical data to understand why they move the way they do.
His bottom line: “It’s been 12 years since we started this one-man show about business, and it’s been quite a run. I could say it’s because we’ve always been trying to find that bull market, but truth is that you are the real reason we keep doing this, and we intend to continue for many more years to come.”
In Cramer’s lightning round, the “Mad Money” pointed to two areas, technology and biotechnology, where investors shouldn’t be too hasty:
CyberArk: “I still like Cyberark, but remember, because Cisco came in so aggressively in that group that’s really hurt a lot of the stocks, and Check Point’s really become my favorite, so let’s be a little more careful and circumspect. I also like Proofpoint. They’ve been pretty good, but things have gotten tough in that area because of Cisco being so aggressive.”
Seattle Genetics: “Boy, you know, we had them on a couple of years ago, and I am just shocked about how well it is doing. That said, it is doing so well up at $67 … I think it’s run too much, so I want to be very careful. I’m going to have to say don’t buy.”