There are three big worries in the stock market, Jim Cramer told his Mad Money viewers Tuesday, but we’ve been worrying about them for months now. Instead of worrying, he said, maybe it’s time to be prepared for when something goes right.
For weeks now, all we’ve heard about is the possibility of a Federal Reserve-induced recession, Covid lockdowns in China, and Russia taking huge losses in Ukraine. None of these three worries show signs of changing course anytime soon.
That’s why shares of General Electric (GE) – Get General Electric Company Report plunged 10.3% Tuesday. Investors just didn’t see any signs of improvement.
But as Cramer discussed on Monday’s show, there are stocks that can transcend these worries. PepsiCo (PEP) – Get PepsiCo, Inc. Report joined the ranks of Coca-Cola (KO) – Get Coca-Cola Company Report and reported strong earnings, despite the worries.
Cramer also reminded viewers that back in 2016, things also seemed dire for the stock market, with huge losses in the Dow Jones Industrial Average. Today, however, those losses are barely a blip in a chart that shows nothing but gains over the past five years.
Executive Decision: Callaway Golf
In his first “Executive Decision” segment, Cramer spoke with Chip Brewer, president and CEO of Callaway Golf (ELY) – Get Callaway Golf Company Report, on the heels of its annual investor day. Shares of Callaway fell 7.5% Tuesday along with the broader averages.
Brewer first commented on Top Golf, the company’s digital driving range that he said is the leader in “modern golf experiences.” He called Top Golf “beyond exciting,” and something that appeals to more than just traditional golfers. In fact, nearly half of Top Golf’s visitors don’t play regular golf, he said. Callaway currently operates 81 Top Golf locations and has plans to open 11 new locations a year.
Brewer said the company is still a leader in golf equipment and apparel. Brands like Jack Wolfskin may not be household names in the U.S., Brewer said, but the brands are huge overseas and contribute to Callaway’s momentum.
Cramer said there’s more than meets the eye at Callaway and a lot to like.
Off the Charts
In the “Off The Charts” segment, Cramer checked in with colleague Carley Garner to find out when the market will finally find a bottom. According to Garner, we aren’t headed for blue skies just yet, but eventually, we will see some strength.
Garner first looked at a daily chart of the CBOE Volatility Index, or (undefined) , going back to 2020. He noted that the VIX just completed a head-and-shoulders pattern and appears to be heading lower in the short term.
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Taking a longer term view, Garner next looked at a monthly chart of the Nasdaq 100 to give investors some perspective. Over the 11 years from 2009 through 2020, the Nasdaq rose 7,000 points. But in the post-Covid rally over the past two years, we’ve risen 10,000 points. That’s too far, too fast, she noted.
So while the near-term pain of this decline might soon be over, don’t expect to see a return to the turbo-charged growth of the past two years. We’re most likely to see sideways trading while the market recovers and consolidates.
Executive Decision: Chipotle Mexican Grill
For his second “Executive Decision” segment, Cramer also spoke with Brian Niccol, chairman and CEO of Chipotle Mexican Grill (CMG) – Get Chipotle Mexican Grill, Inc. Report, which just reported strong earnings and a bullish forecast for the rest of the year.
Niccol said there’s a lot of momentum at Chipotle and they are expertly navigating “tricky headwinds,” while still seeing strong demand.
While other restaurants are seeing staffing shortages, Niccol said turnover at Chipotle is the lowest it’s been in years. People are attracted to the company for its purpose and the opportunities for advancement it provides.
Chipotle continues to invest in automation and technology, Niccol added. The company continues developing a new chip-making robot that fries, salts and seasons chips to perfection. They’re also looking to automate the jobs employees hate the most, like dishwashing and cutting and coring avocados. “Our employees love making guacamole,” he said, and they’d love to do it without prepping all of those avocados.
Cramer said Chipotle remains one of the best restaurant chains in the business.
In the Lightning Round, Cramer was bullish on Plains All American Pipeline (PAA) – Get Plains All American Pipeline, L.P. Report, Enterprise Products Partners (EPD) – Get Enterprise Products Partners L.P. Report, Transocean (RIG) – Get Transocean Ltd. Report and Veru (VERU) – Get Veru Inc Report.
Musk’s Twitter Deal
In his “No Huddle Offense” segment, Cramer those critical of Elon Musk’s takeover of Twitter (TWTR) – Get Twitter, Inc. Report fail to see what the site could ultimately become. There are plenty of ways Twitter could monetize its services, he said, without ruining the user experience. In fact, there are many ways Musk could improve the user experience, but adding a subscription tier, allowing commerce through direct messaging, and providing advertisers the ability to target users locally.
People who doubt Musk now are the same people who doubted Tesla (TSLA) – Get Tesla Inc Report, Cramer concluded, and they’ll likely be just as wrong.
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