On Friday, Jim Cramer cautioned that Wall Street may continue to experience volatility as investors prepare for a dense earnings schedule and the upcoming midterm elections.
The stock market faced a challenging week as renewed apprehension regarding the artificial intelligence trade put pressure on technology stocks. The tech-focused Nasdaq Composite managed a 2.3% gain through Wednesday before reversing course with a 2.9% drop on Friday, concluding the week down 2%. The S&P 500 mirrored this trajectory, advancing 1.6% through Wednesday before falling 1.8% on Friday to end the week 0.6% lower. Likewise, the Dow Jones Industrial Average saw its gains reversed, rising 0.5% through Wednesday before declining 1.1% on Friday to finish the week down 0.9%.
“After a brutal week for tech, don’t assume the worst is behind us,” the “Mad Money” host said. “We’ve got the election, uncertainty overseas, the jobs report and another slew of earnings.” Cramer advised investors: “Don’t try to call the bottom in the Nasdaq just yet. Pick up some high-quality companies that are being thrown away, and remember, in this market, even great earnings might not be enough to send a stock higher.”
Earnings Spotlight: Apple and Palantir Lead the Way
The week begins on Monday with Apple’s after-hours earnings release, a period that recently saw the company’s shares reach an all-time peak, buoyed by enthusiasm for its new offerings, such as the upcoming Duo foldable phone. While Cramer maintains a bullish stance on the firm, he notes its valuation, at nearly 40 times earnings, leaves minimal margin for error. “You can trade it, but I am going to own it,” he stated.
He also projects positive results from Palantir’s upcoming report, pointing to favorable customer feedback on its AI software. Tuesday’s focus shifts to the midterm elections, with Cramer monitoring if a change in congressional control might jeopardize planned data center projects. He cautioned that rising political opposition to these facilities could postpone construction and negatively impact firms whose growth is tied to AI infrastructure spending. Nevertheless, he’s “not going to write off the data center entirely because there are plenty of states that will welcome them.”
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Among the notable earnings reports, Advanced Micro Devices will present, providing another key assessment for the semiconductor industry after Intel’s lackluster performance. Cramer anticipates AMD will deliver superior results compared to its competitor. Pharmaceutical companies Pfizer and Amgen will also release their reports, with Cramer suggesting both could gain from a renewed investor interest in the healthcare sector.
Healthcare and Consumer Staples Under the Microscope
Wednesday’s earnings report from CVS Health will be closely watched. Cramer is interested in the company’s standing within the healthcare field, yet he voiced concerns about its pharmacy benefit management division. “I wish it could disengage with that business; its stock would go higher,” he remarked. McDonald’s earnings will also be scrutinized, with Cramer looking for evidence that the company’s restaurant improvement strategy is gaining momentum amidst reported friction from franchisees.
On Thursday, Kimberly-Clark will report, and Cramer feels optimistic about the consumer goods firm’s future following its planned merger with Kenvue. The stock has been bolstered by a shift in investor capital toward consumer staples, and Cramer’s positive outlook on the company remains. “If this one falls before then, I think you should pick some up,” he said.
Jobs Report and Market Outlook
Friday’s monthly jobs data will offer another significant challenge for the markets. Cramer forecasts robust hiring but minimal wage growth, a combination that could alleviate inflation worries and account for the steadiness in Treasury yields. The CNBC Investing Club is also set to hold its annual gathering, where Cramer and Jeff Marks will discuss their portfolio, market risks, and their top-performing investments.