If investors want to start sleeping better at night, it’s time to start thinking about what’s going right with this economy, CNBC’s Jim Cramer said.
While many Wall Street watchers have been fixated on what could go wrong on the market, the “Mad Money” host on Wednesday explained six reasons he can’t stop wiping sleep from his own eyes.
“Now, I know many of you probably think I’m whistling past the graveyard here,” Cramer said. “I’m only whistling past the graveyard of underperforming portfolio managers who can’t sleep at night because they’ve been scared away from a terrific rally by the parade of horribles that play like a constant loop inside their heads.”
The United States economy is the strongest in the world and benefits from a two-punch combo that the host has never seen before, Cramer said. A “fabulous” employment rate on top of almost non-existent inflation should relive a lot of stock picker’s worries, he said.
With the days inching closer to March, the last month of the first quarter in 2019, Cramer is anticipating the jobs report set to come out Friday.
“Growth without inflation is a magical combination … and I can’t actually wait to see Friday’s non-farm payroll report because I’m betting things picked up after Fed Chief Jay Powell backed away from nuking the economy in order to save it with a series of lockstep rate hikes at the beginning of the year,” he said.
The Fed chair himself also made Cramer’s list as the second reason the host can sleep throughout the night. He said Powell has been fun to watch since the central bank has shifted its monetary policy, which gave Cramer more confidence in its game plan.
“After making a rookie mistake in the fourth quarter, he course corrected and now you’ll have to wonder if he’ll be in the Goldilocks all-star game where the economy is not too hot, not too cold—just right,” he said. “That guy let’s me sleep like a baby.”
Cramer gave a shout out to the CEOs that joined Lowe’s and General Electric within the past seven months for allowing him to sleep without setting an alarm. Larry Culp, who began leading GE in September, and Marvin Ellison, who took the executive seat for Lowe’s in July, are giving new life to their fallen franchises, he said.
“Culp’s got game,” Cramer said. “I think he’s doing an amazing job fixing the balance sheet so he can then start playing offense … That’s what the pros do with franchises that are potentially starved of credit. He’s taking the balance sheet fears off the table.”
Speaking of Ellison, Cramer said he has “taken control of a company that had become a market share donor to Home Depot with professional contractors eager to go orange and flee blue. He’s making it a contender again.”
Both stocks are a buy on Cramer’s watch.
The fourth thing that’s helping the “Mad Money” host sleep at night is the “wave of out-of-control dividend boosts” that he thinks deserves more attention. He pointed to increases of 11 percent at Best Buy, 18 percent at TJX, 18 percent at Dick’s Sporting Goods, and 32 percent at Home Depot.
“At a time when we’re scrambling for every dime, right, these companies are putting money in your pocket for doing nothing,” Cramer said. “I love getting paid to do nothing.”
While brick-and-mortar shopping is trying to stay afloat in rough waters, Cramer said there are a number of retailers he’s keeping his eye on when he is awake. He said even though companies like AutoZone, Best Buy, TJX, and Etsy were considered to be in Amazon’s way, they are doing “better than fine.”
Etsy’s stock is up more than 240 percent over the past year.
“We’ve got a rising retail tide that’s lifting nearly all boats … and the most incredible thing is that Amazon’s doing fabulously, too,” he said. “Turns out there’s room for everybody.”
The sixth reason Cramer said he is sleeping well at night is the market itself. That’s because investors seem to be fearing the market, he said.
“People act like the sky is falling, but the sky already fell in the fourth quarter and we’re fine,” Cramer said. “It’s being reassembled as we speak.”
The “Mad Money” host did concede that he holds worries that China’s weaking economy might fall apart, but he’s optimistic that the trade dispute with the United States will be resolved.
“Instead of constantly fretting … about what’s going wrong, you need to start thinking about what’s going right,” Cramer said. “Believe me, you’ll sleep a lot more soundly at night and I bet your portfolio will perform a lot better, too.”
Questions for Cramer?
Call Cramer: 1-800-743-CNBC
Questions, comments, suggestions for the “Mad Money” website? firstname.lastname@example.org