The stock market is well-positioned to bounce next week if the heavyweight companies set to report earnings deliver strong numbers, CNBC’s Jim Cramer said Friday.
That’s because the market ended the week on a subdued note, the “Mad Money” host said, after the S&P 500 finished in the red for three straight days.
The busy week wastes no time getting underway, with Disney reporting on Monday and talk of CEO succession in the air. Cramer’s Charitable Trust, the portfolio used by the CNBC Investing Club, threw in the towel on its Disney position in November after a prolonged period of stagnant performance. “There was always some division that held it back. I don’t know which it is this time. You never do,” Cramer said.
On Tuesday, we’ll get the latest from names including Pfizer, Pepsi, Merck, Advanced Micro Devices, and Chipotle. While investors will look to AMD for insights into the AI boom, Cramer said it’s possible that even a terrific set of numbers will be met with selling. That’s seemingly become “the new pattern” for chip stocks, he said.
Also Tuesday, Western Digital is hosting what it’s dubbed an innovation day, where the company plans to highlight innovations aimed at supporting growing data storage demand. Cramer said the upcoming event is “critical” after the company’s stock got crushed Friday despite posting a great quarter the prior evening. “We have to find out what that’s about,” he said.
Eli Lilly reports Wednesday morning, and Cramer said he’ll be watching for whether the obesity drugmaker shares any new trial results for its GLP-1 portfolio — something that could be more meaningful to the stock’s movements than the quarterly results themselves. Lilly shares are down about 3.5% year to date.
Alphabet, which reports Wednesday night, will be among the most consequential reports for the market.
“This is a company that many wrote off as the least of the ‘Magnificent Seven,'” Cramer said, but the narrative has completely flipped. “Whether it be Gemini, the best of the chatbots, or YouTube, the most popular video site in the world, or Waymo … or Google itself, doesn’t matter. Alphabet is the best and when it reports, I think it could romp.”
The other tech giant reporting next week is Amazon, which will release its numbers after the close Thursday. Cramer said Amazon has become a controversial stock. When the stock finally gets momentum, Cramer said the sellers appear, eroding the gains. “Lost in the shuffle is the greatness of the company itself,” Cramer said, acknowledging the stock’s lackluster returns of late. “I’m a believer.”
Rounding out the week on Friday is the January employment report, which Cramer said could come in weaker than anticipated both on job gains and wage inflation. That could help support lower bond yields while enabling stocks to soar, he said. “I think it’s a distinct possibility.”
Disclosure: Cramer’s Charitable Trust has positions in LLY, AMZN and GOOGL.
Sign up now for the CNBC Investing Club to follow Jim Cramer’s every move in the market.
