Jim Cramer of CNBC is so passionate about Apple Inc’s stocks that, sometimes, especially in light of the recent slide in the U.S. stock market, he knows it’s worth getting a second opinion.
Image: Jim Cramer
On Tuesday, Cramer got technician Carolyn Boroden’s take and, after inspecting Apple’s charts, Boroden, who runs FibonacciQueen.com and is Cramer’s colleague at Real Money, came out “cautiously optimistic” on the stock’s near-term future.
“Her diagnosis? She thinks that Apple could soon be ready to rebound, … perhaps even climbing back to new highs,” Cramer, who hosts the Mad Money said on Tuesday.
“As for me, I think it’s too hard to trade in and out,” he said. “That’s not my thing. Apple’s a great company with a cheap stock and I’d be a buyer here, because, given the size of the company’s buyback, I’m confident Apple will be buying right alongside you.”
“The results of the midterm elections will change the nature of the stock market,” Cramer said Tuesday as Wall Street awaited the outcome of a defining battle over Congress.
He continued, “The Democratic Party is expected to regain control of the House of Representatives, with the GOP maintaining a slim majority in the Senate. That would result in congressional gridlock, which could spell trouble for President Donald Trump’s agenda but be ‘very good’ for stocks.
“This gridlock scenario results in a dramatically slower economy,” he added. “That’s … terrific for the highest-growth stocks that can keep putting up terrific numbers even during a slowdown. Think Amazon, Alphabet, the cloud plays, the cybersecurity stocks, and many of the … semiconductor names like Broadcom and Qualcomm, which are tied to the rollout of 5G wireless technology, not the broader economy.”
Investors “have to look at the overall economy” and not focus so much on President Donald Trump’s tariffs on steel imports when considering whether to invest in Nucor, the country’s largest steel producer, its CEO told CNBC on Tuesday.
“We hear a lot of talk about the tariffs and, certainly, the tariffs are playing a role in the performance that the steel industry, and Nucor in particular, is having this year,” John Ferriola, the steelmaker’s chairman and CEO, told Cramer. “But the real driver for the performance of the industry and Nucor is the economy, and the economy remains strong.”
The fate of U.S. steelmakers has been in question since the president’s tariffs came into effect, as some raised concerns that they could raise the price of steel globally to unsustainable levels.
But if you ask Ferriola, a strong economy, higher demand and stable end markets far overshadow the tariffs’ effects on his company’s business.
Cramer is growing concerned that the Federal Reserve’s rate hikes won’t fix with the problems they are intended to solve.
“This earnings season, we’ve heard company after company cite rising costs: higher ethane prices thanks to a freak spike in natural gas, higher steel costs because of the tariffs, higher freight costs because we have a shortage of truck drivers,” the “Mad Money” host said. “The Fed wants to tighten in order to stamp out all of this inflation, but higher interest rates won’t actually solve many of these problems.”
In reality, if companies think that the business cycle could be peaking, they’ll stop expanding operations when price increases stop sticking and inventory piles up, Cramer said.
“Sure, the Fed can accelerate this process, but do we really need them to turn a mild slowdown into a worse slowdown? Honestly, the trade war with China is already doing that job,” he argued.