Shares fell on Friday despite a new proposal for coronavirus aid spending the new Biden administration hopes to pass, a sign that Wall Street players got exactly what was expected, CNBC’s Jim Cramer said.
President-elect Joe Biden, who will take office in five days, tabled a $ 1.9 trillion stimulus wish list that includes funds for assistance Families and businesses up to Covid-19 vaccines are common.
Despite the economic boom that could come with such a plan, the stock market was not in the black as major US indices had all closed a negative week of trading.
“When an event occurs and the market gets exactly what it wants, but nothing more, this is treated as a reason to sell, not buy,” Cramer told Mad Money. “Biden’s stimulus bill only met expectations. It did not, so to speak, surpass the ‘stimulus whisper’.”
The Dow Jones Industrial Average closed at 30,814.26, a decrease of 177 points and a decrease of 0.57% from Thursday. The S&P 500 fell 0.72% to 3,768.25 while the Nasdaq Composite fell 0.87% to 12,998.50.
The indices all fell about 1% or more this week.
Friday’s declines were compounded by the way bank stocks traded after several quarterly gains reported that morning to kick off earnings season. JPMorgan Chase beat analysts’ estimates, but the stock fell 1.79%. Citigroup and Wells Fargo had mixed results, with their stocks falling about 7% or more.
However, Cramer believed this to be misguided sell-offs, advising investors to wait three trading days before buying shares in JPMorgan or Wells Fargo, stressing that banks are preparing to do share buybacks and dividend increases this year.
“There are a lot of options. You just have to spot them first and find out if they are trades or investments,” he said. “In a trade, you have to exit the moment you win. In an investment, you want to buy gradually as you go down and then wait for the story to pay off.”
Cramer announced his schedule for the coming week. All profit forecasts are based on FactSet estimates:
Tuesday: Goldman Sachs, Bank of America, and Netflix wins
Goldman Sachs
- Earnings release for the fourth quarter of 2020: 7:30 a.m. Conference call: 9:30 a.m.
- Projected earnings per share: $ 7.39
- Estimated Revenue: $ 9.99 billion
“Only a massive jump in earnings, based on both sales growth and lower spending, can take this stock higher,” said Cramer. “A normal beat isn’t enough, and we need a super … elevated forecast for this stock to recover.”
Bank of America
- Earnings release for the fourth quarter of 2020: 6:45 am; Conference call: 8:30 a.m.
- Projected EPS: 55 cents
- Estimated Revenue: $ 20.58 billion
“Like Goldman Sachs, Bank of America is smoking. In the past few months it has gone from $ 24 to $ 33,” he said. “Again, when expectations are so high, it’s not enough to be good, you have to be great.”
Netflix
- Earnings release for the fourth quarter of 2020: 4 p.m. Conference call: 6 p.m.
- Projected earnings per share: $ 1.36
- Estimated Revenue: $ 6.62 billion
“I think Netflix could finally suffer from fatigue these days thanks to the new competition,” said the host. “If Netflix wants to get its groove back, it has to blow the numbers away, but I’m not holding my breath.”
Wednesday: earnings from UnitedHealth, Procter & Gamble and Morgan Stanley
UnitedHealth Group
- Earnings release for the fourth quarter of 2020: ahead of the market; Conference call: 8:45 a.m.
- Projected earnings per share: $ 2.41
- Estimated Revenue: $ 64.98 billion
“I am expecting another incredible, amazing quarter that still seems to surprise people,” said Cramer. “The company is a machine – a money machine – and I wouldn’t be surprised if they raised their forecast very high, too.”
Procter & Gamble
- Earnings release for the second quarter of the financial year 2021: before the market; Conference call: 8:30 a.m.
- Projected earnings per share: $ 1.51
- Estimated Revenue: $ 19.26 billion
“I expect a perfect quarter from Procter & Gamble,” he said.
Morgan Stanley
- Earnings release for the fourth quarter of 2020: 7:30 a.m. Conference call: 8:30 a.m.
- Projected earnings per share: $ 1.30
- Estimated Revenue: $ 11.58 billion
“I would be shocked if Morgan Stanley didn’t exceed expectations,” said the hosts. “CEO James Gorman has navigated brokerage waters better than anyone except maybe the folks at Robinhood. The only problem I see here is with Gorman himself. He’s so damn selfless that he may make the quarter sound less impressive than that it is.” . “
United Airlines
- Earnings release for the fourth quarter of 2020: after market entry; Conference call: Thursday, 10:30 a.m.
- Estimated Loss Per Share: $ 6.58
- Estimated Revenue: $ 3.44 billion
“Can United Airlines give these stocks a shot of oxygen? If we have a good vaccine day, the answer is yes,” he said. “Otherwise it just doesn’t matter.”
Thursday: Revenue from Union Pacific, IBM, Intel, CSX and United Airlines
Union Pacific
- Earnings release for the fourth quarter of 2020: 8 a.m.; Conference call: 8:45 a.m.
- Projected earnings per share: $ 2.24
- Estimated sales: $ 5.09 billion
“The really good news, however, is that the rails now tend to cluster no matter what, and that’s because of the lack of efficiency and cost controls,” said Cramer.
IBM
- Earnings release for the fourth quarter of 2020: after market entry; Conference call: 5 p.m.
- Projected earnings per share: $ 1.81
- Estimated Revenue: $ 20.65 billion
“We believe IBM will introduce the management team to Newco, the services spin-off that represents the old IBM,” he said. “I think the street will like what it hears.”
Intel
- Earnings release for the fourth quarter of 2020: after market entry; Conference call: 5 p.m.
- Projected earnings per share: $ 1.10
- Estimated Revenue: $ 17.46 billion
Intel “just messed up its collaboration with a new CEO (Pat Gelsinger) after the company suffered multiple sales failures,” said the host. “I bet he’ll do a good job at Intel too.”
CSX
- Fourth quarter 2020 results: after market entry; Conference call: 4:30 p.m.
- Projected earnings per share: $ 1.01
- Estimated Revenue: $ 2.77 billion
“I like what I see when industrial loads get stronger. If it’s sold in response to Union Pacific, I’ll likely be a buyer,” he said.
Friday: Schlumberger result
Schlumberger
- Earnings release for the fourth quarter of 2020: 7 a.m. Conference call: 8:30 a.m.
- Projected EPS: 17 cents
- Estimated Revenue: $ 5.23 billion
“I’m not expecting a strong quarter, but the number of oil rigs has been growing week after week and that’s always good news for the stock known as Slob,” said Cramer.
Disclosure: Cramer’s charitable foundation owns interests in Goldman Sachs, JPMorgan Chase, and Wells Fargo.
Disclaimer of liability
Questions for Cramer?
Call Cramer at 1-800-743-CNBC
Would you like to dive deep into Cramer’s world? Open it up!
Mad Money Twitter – Jim Cramer Twitter – Facebook – Instagram
Questions, comments, suggestions for the Mad Money website? madcap@cnbc.com
Comments are closed.