Segment 1: What is Wrong with the Market?
Cramer said that no matter what good news is reported, the market ignores it and goes lower. For example semiconductor stocks are being upgraded and predicting increased earnings, but the stocks aren’t moving higher. Cramer thinks that the bottom of the market is near 7700 and we aren’t far from that right now, so this could be a buying opportunity for high quality stocks, but no one is interested. He blames this apathy on the problems in the oil market and the constant negativity and statements about new taxes from the government. He said that he wishes Congress would take a couple weeks off and that people would realize that lower oil is good for the economy, not bad. He recommended buying Honeywell (HON) with its 4% yield near its 52 week low, Wal-Mart (WMT) just $1.27 higher than its 52 week low, Home Depot (HD) and its 4% yield, AMD (AMD), and Ciena (CIEN).
Segment 2: Interview with Ron Insana
Cramer said on the show yesterday that he disagrees with Insana’s bullish call on the homebuilders and his suggestion to sell defensive plays, so he had Insana on the show to defend his position. Insana believes that we have already hit such unbelievable lows in the homebuilders, insurance companies, and banks, so there isn’t anywhere for them to go but up. For example, Hovnanian (HOV) and Lennar (LEN) aren’t expected to make money until the end of 2010, so expectations are very low. He also expects to see consolidation in the sector, so there could be profits from a takeover. He thinks unemployment could go up to 11%, but when that has happened in the past, people who bought banks did very well over the long term. Insana ended by saying that people are acting like the world is coming to an end, but when it doesn’t, these prices will be cheap.
Segment 3: Speculation Friday
Cramer was reading about the cyber attacks on U.S. and Korean government websites this week, and thinks that increased online attacks could be a good trend to speculate on. He recommended ArcSight (ARST) as a play on increased concern about cyber security by analyzing security breaches from the inside and outside. It also helps companies comply with government regulations like Sarbanes-Oxley, and increased government regulations in the energy, healthcare, and other sectors could benefit ARST. Cramer said that the company is profitable, has $2.63 per share in cash, no debt, a 34% growth rate, and very large amount of recurring revenue. Cramer warned that it does have a high P/E ratio of 33, but that is justified by the long term growth rate. He also reminded people not to pay more than the current closing price for ARST, but he is bullish.
Cramer took phone calls on the following stocks:
McDonald’s (MCD): Cramer is bullish on this stock.
EMC (EMC): Cramer said to hold onto this stock.
Segment 4: Lightning Round!
MTS Systems (MTSC): Cramer said to sell this stock.
International Game Technologies (IGT): Cramer is bearish on this stock because he doesn’t like the casino sector.
NetApp (NTAP): Cramer is bullish on this stock because he thinks it will have a good quarter, and he is happy that they pulled out of the bidding war for Data Domain (DDUP).
Regions Financial (RF): Cramer is bearish on this bank, and said to buy Huntington Bancshares (HBAN) instead.
Emerson Electric (EMR): Cramer is bullish on this stock because of increased Chinese demand, its dividend yield, and the cheap stock price.
SLM (SLM): Cramer is bullish after the stock pulled back from its recent highs.
Segment 5: Interview with Philadelphia Phillies Shortstop Jimmy Rollins
Cramer talked to this baseball player about the parallels between sports and investing, but didn’t mention and specific stocks.
