The stock market might have run too much this week to hold its gains during next week’s “earnings Super Bowl,” CNBC’s Jim Cramer said Friday as the Dow Jones Industrial Average rounded out its fifth straight week of gains.
“It’s the busiest week of the year and we’re coming in hot, maybe too hot, seeing as the market roared today on earnings and hope: hope that the government shutdown really might end, hope that we could get a trade deal with China soon, hope that the Fed won’t surprise us when it meets next Wednesday,” he said. “Maybe there’s too much hope and too much hype.”
With that possibility in mind, Cramer, host of “Mad Money,” turned to his game plan for the week ahead:
Construction machinery giant Caterpillar will kick of the week with its earnings report, and Cramer had an unexpected take on how investors should play it.
“If you’re worried about a global slowdown, especially in China, you’d think CAT would be a perfect short here,” he said. “I beg to differ. I believe Caterpillar can make a ton of money at this point in the cycle, much more than people realize.”
Unless Caterpillar’s management is specifically negative in its comments, “this stock could fly,” Cramer said. Still, he worried about the company’s propensity for “shooting itself in the foot.”
Verizon: Calling this telecommunications giant “one of the best-performing stocks around when you take its dividend into consideration,” Cramer said he expected good things from its Tuesday report.
“This is exactly the kind of slow-and-steady stock that got punished this week,” he noted. “I bet Verizon reports a good number, I just don’t know if it’ll be enough reignite the stock.”
Pfizer: The “Mad Money” host also worried about Wall Street’s distaste in the stock of Pfizer, one of the world’s largest pharmaceutical companies with a stock down nearly 7 percent year to date.
“It will stay unloved unless management does something drastic to unlock value,” he said.
3M: Also at risk of not impressing the Street is manufacturer 3M, the maker of Scotch tape. Cramer hoped to hear some good news from the company, but predicted more pain if it misses estimates.
Allergan: Allergan also joins the chorus of companies reporting earnings Tuesday, and Cramer expected good results from the Botox maker and its CEO, Brent Saunders.
“I believe the weakness has continued, so it could impact both hardware sales and, maybe more importantly, the service revenue stream,” Cramer warned. “That’s one reason I keep pushing Apple to make some health-care acquisitions, like Epic Systems or Cerner, because doing something dramatic to bolster the service business could give this stock its mojo back.”
But, he admitted, “I’m concerned because the stock screamed higher [Friday].”
Boeing: Cramer went against Wall Street in his take on aircraft manufacturer Boeing, which issues its quarterly results on Wednesday: “The conventional wisdom says Boeing’s hostage to China, but I think it’s the other way around.”
AT&T: The “Mad Money” host will want to hear how AT&T’s cash flow has been augmented by its now-closed acquisition of Time Warner. The telecom player will report earnings before the bell.
The Fed: Fed Chair Jerome Powell will speak and field questions Wednesday as part of the central bank’s meeting, and Cramer will be parsing every word.
“If Powell focuses on how hot the economy … and hiring is, I think that’s a signal we’ll be getting another rate hike next month,” Cramer said. “He may also talk about dumping the Fed’s long-term bond holdings — that’s another negative for stocks and the economy right now. It’s a de facto tightening. This guy can be a one-man wrecking crew if we’re not careful.”
Tesla: “A boatload of controversy” will ensue after Wednesday’s closing bell, beginning with a report from automaker Tesla, Cramer said.
“My view on Tesla remains the same: if you love, love, love the car, you’re free to own the stock, but I can’t recommend it because the balance sheet’s so ugly. Tesla needs too much money,” he explained.
Facebook: The controversy continues with a quarterly report from Facebook. Cramer figured the stock was more or less “inured to negativity at this point,” but offered some advice for CEO Mark Zuckerberg.
“Zuckerberg needs to talk about the return on investment from [his] projects and he needs to tell us if Facebook can make money now that they’re no longer merchandising your data,” he said.
Microsoft: Microsoft has “been on fire of late,” Cramer said. Still, he lamented that the tech titan was reporting on such a “crowded” day.
“We need more time to understand and digest these conference calls, which is why Wednesday’s such a nightmare,” he said.
General Electric: Shares of this embattled industrial have been climbing ahead of its Thursday earnings report, but according to GE guru and J.P. Morgan analyst Steve Tusa, there’s no real reason behind the moves, Cramer said.
“The company’s cash needs are so humongous that its earnings haven’t mattered, but … I bet the aerospace and health-care divisions will be fantastic when the company reports,” he said. “Still, GE needs to raise more money, so we want to know how health care looks as a standalone business. If CEO Larry Culp gives us that, there might be a reason that the stock ran and could run some more.”
Amazon: Calling the e-commerce play a “quandary” ahead of its report, Cramer worried that Amazon, his charitable trust’s largest holding, was “getting too much advance attention from the bulls.”
The Amazon zealots are “starting to squawk about an upside surprise,” he said. “That’s worrisome. I want all expectations wrenched out of Amazon’s stock before it reports. I’d actually love it, at this point, if the president were to bash the company ahead of the quarter. I want all the fluff gone. That said, Amazon’s advertising, retail and web services businesses are all remarkable, and it’s arguably the most innovative company on earth, so we’re sticking with it.”
“I’m not a fan of that group, … but I think both companies will have a positive story to tell because of oil’s stability of late,” he said.
The “Mad Money” host might have to pull some all-nighters next week to get a handle on all of this information, but he won’t let investors down.
“I left out at least two dozen important companies just because we don’t have enough time to address all of them,” he acknowledged. “You’ve got the highlights, though. This is the earnings Super Bowl, people, and as next week goes, especially if you include the Fed, so goes the next month and then some.”
Disclosure: Cramer’s charitable trust owns shares of Apple, Facebook, Microsoft, J.P. Morgan, Amazon and Honeywell.
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Originally published at CNBC