As the major averages hit all-time highs on Friday, CNBC’s Jim Cramer worried that investors would take the gains in stride and forget about the market’s vulnerability.
“It lulls you into believing that this market just can’t possibly be hammered,” the “Mad Money” host said. “Those are often the most dangerous of times.”
From geopolitical tensions with North Korea to Thursday’s terror attack in London to the cyber-breach at Equifax, Cramer said there are any number of threats that could take stocks down.
And while he didn’t want to fearmonger, Cramer pointed out that positive streaks like this are highly unusual, even though economic factors including inflation, growth and earnings are generally in the market’s favor.
“I’m urging you: first, don’t get cocky. Second, don’t load up on leverage. Don’t use margin. Third, don’t speculate with more than 10 percent of your money. That’s fine, 10 percent. Fourth, have a diversified portfolio. And fifth, please don’t feel guilty about taking profits while you still have them,” Cramer said. “No one ever got hurt taking a profit.”
With that in mind, here are the stocks and events Cramer will watch this week:
Cramer said investors should pay close attention to Monday’s Eurozone inflation report.
U.S. markets have been taking their cue from Europe lately, and if inflation overseas ticks up, as Cramer expects it will, that should bring good tidings for U.S. companies.
If inflation in Europe is higher, that could spur the European Central Bank to raise interest rates. That in turn would make the U.S. dollar even weaker, which would translate into better earnings for U.S.-based companies, particularly in the industrial sector, Cramer said.
Autozone: Cramer expects positive news from Autozone’s earnings report given the increased demand for auto parts and accessories after Hurricanes Harvey and Irma.
That said, rumors that Amazon wants to enter the auto parts business have been swirling for nearly a year, so Cramer is staying away from Amazon’s shadow even though he has historically liked Autozone’s stock.
Bed Bath & Beyond: Another stock plagued by Amazon, Bed Bath & Beyond has been buying back stock in the hopes of erasing the e-commerce giant’s influence on its shares.
“Those repurchases, they’ve been a huge waste of money and time for management,” Cramer said. “Maybe this time will be different? I think not — Bed Bath’s a well-run company, but there’s only so much they can do against a practically unbeatable behemoth like Amazon.”
FedEx: E-commerce has actually boosted business for this shipping giant. Wall Street is buzzing about a potential cyberattack that may have taken a toll on FedEx’s earnings, but Cramer said any related weakness will simply give investors a chance to buy the stock at a discount.
General Mills: The consumer foods giant will report earnings before the bell, and Cramer hopes to see signs of growth in its food portfolio.
“It’s a been a tough run for a very well-run company and, even as it’s tried to make its offerings more natural and organic, the numbers just haven’t been there. But it’s got a new CEO, Jeff Harmening, and he may have some answers,” the “Mad Money” host said.
Herman Miller: Wednesday’s closing bell will bring earnings from high-end furniture maker Herman Miller, and Cramer is anticipating good results from the hit-or-miss company.
An analyst meeting at Rambus, a small but important semiconductor licensing company, should bring clarity on the state of some key areas of the market including data centers and the internet of things, Cramer said.
CarMax: With hundreds of thousands of insured cars destroyed after Hurricanes Harvey and Irma, Cramer expects CarMax to report a jump in traffic as people turn to the used car market.
Finish Line: The athletic shoe retailer pre-announced weak earnings results two weeks ago, so Cramer isn’t expecting much from Finish Line’s earnings report.
“This company’s results have hammered Nike shares time and again. Maybe the guidance cut was deep enough that the stock won’t get crushed when we see the real numbers. But as I said earlier this week, don’t bother to bottom fish here,” the “Mad Money” host said. “It’s not worth it.”
As the market runs higher and higher despite an array of potentially detrimental geopolitical and economic factors, Cramer wants investors to refrain from getting too comfortable.
“I’m urging you not to get complacent,” Cramer said. “There’s no doubt that business is better, no doubt that it’s a light week and there may not be so many catalysts that could take things down. However, that is when, historically, you need to be the most vigilant. Or another way to put it: the market never stays this easy for long.”