Offbeat Cramer explains how Micron and Macy's stocks sparked a rally

01:57  17 may  2018
01:57  17 may  2018 Source:

Cramer: This trade-led rally makes sense—just look at the retail sector

  Cramer: This trade-led rally makes sense—just look at the retail sector Jim Cramer unpacks the market's response to the U.S.-China trade truce that sent the major averages higher on Monday."While we often act like only the large-capitalization stocks like Caterpillar and Boeing ... are really in the crosshairs here, the truth is it's much, much bigger than that," the "Mad Money" host said on Monday. "So [...] let's talk about why this rally actually makes a lot of sense.

Micron stock needs to stay above , where it priced .2 billion worth of stock in a recent offering. If it holds, Micron and others in tech can rally , Jim Cramer says .MU. How Much Micron ' s Stock Could Soar Is Mind-Blowing. Intel, AMD and 24 Other Stocks I Love for October.

Micron trades with a very low valuation and should this rally take place, it will command a more reasonable valuation Investing Stocks Technology Jim Cramer Industrials How -to Analyst Actions Growth Investing. CEO Blaine Hurst explains to TheStreet how the company is using big data.

After CNBC's Jim Cramer watched the stocks of Micron and Macy's spark what amounted to a broad-based rally on Wednesday, he knew he'd have to explain how this odd surge occurred.

Sometimes, the "Mad Money" host explained, big-picture worries about the bond market, rising oil prices or trade talks can sully market performance and put pressure on equities.

"Other times, though, there's a vacuum of information, a real dearth of 'what matters,' like we had today," Cramer said. "In this situation, we can actually care about individual companies and what they have to tell us, provided that these companies are important enough to their sectors that they can give us tremendous pin action," or affect the movements of related stocks.

Cramer: 3 reasons why this market rally should be taken seriously

  Cramer: 3 reasons why this market rally should be taken seriously Jim Cramer outlines three reasons why this market rally should be taken seriously. 1. EarningsMost companies had better-than-expected earnings and raised their full-year forecasts this quarter, which Cramer said was a good sign."The best predictor of a stock's direction" is whether or not the underlying company can beat analysts' earnings estimates and raise its guidance, Cramer said. So far this quarter, companies from Apple to Disney have delivered earnings beats and seen their stocks soar in response.

Cramer pinpoints what sparked the rally : China, 60 Minutes, short-covering and Facebook. " How does a market go from dismal and dejected on Friday to beyond exuberant on Monday?" the "Mad Money" host said. With that question in mind, Cramer explained the four drivers that brought stocks

With stocks pulling back modestly as the S &P 500 and Nasdaq slip from their 7-day rallies , Jim Cramer said one index will prove whether the rally still has legs: the Dow Jones Transportation Average .

That's exactly what happened with Micron and Macy's, Cramer argued. Before Wednesday, both stocks were widely disliked. Short positions had built up in both, especially Macy's, he said.

Cramer added that both companies "are total bellwethers" in their respective spaces: Micron because its semiconductors are building blocks in a host of technologies, and Macy's because the brick-and-mortar retailer carries a wide variety of merchandise.

Read more from Jim Cramer and other top money experts

Still, investors were concerned because they saw Micron as beholden to a boom-bust cycle in dynamic random-access memory and flash chips, its flagship products, which are widely viewed as commodities.

But on Wednesday, RBC Capital analysts turned that thesis on its head, issuing a "buy" call on Micron and arguing that the fears were overblown in a note titled "Rationality in Cyclicality."

Cramer: If you want bigger gains, buy stocks that are selling off on panic

  Cramer: If you want bigger gains, buy stocks that are selling off on panic Jim Cramer uses Amazon's stock to explain why buying broken stocks can boost investors' earnings."Most people prefer to chase what's hot in the hope that they can get in on the next big thing, not before it's happened, but while it's happening," the "Mad Money" host said on Tuesday.

If Micron Holds This Level a Tech Rally Could Be Sparked , Jim Cramer Reveals. Micron Could Still Rocket Nearly 50%, Stock Offering Aside. Investing Stocks Technology Opinion Jim Cramer Industrials How -to.

A December rate hike -- and the perception among investors that a new rate will come in December -- is what' s needed for the bank stocks to continue their rally , reasoned Cramer , who also manages the Micron Stock Is Cheap and Earnings Results Pop. How to Spend. Financial Advisor Center. Autos.

Sure enough, shares of Micron rallied, spurring positive moves in related stocks like Western Digital, Lam Research, Applied Materials, Texas Instruments, Intel and more.

"The semiconductors are a powerful leadership group, and today they took their rightful place at the front, all because of these [Micron] recommendations," Cramer said.

In the world of retail, Macy's first-quarter earnings report topped analysts' expectations, with accelerating sales and earnings underscoring CEO Jeff Gennette's turnaround plans, Cramer said.

Six days before the report, Morgan Stanley analysts downgraded the stock of Macy's on declining sales and other pressures.

"I've gotta ask: what the heck are they smoking at Morgan Stanley?" Cramer joked.

"Gennette did so much good here, like creating a team of merchants and technology experts that have melded brands with e-commerce and private label to produce some incredible results," the "Mad Money" host continued.

Cramer: FANG isn't dead, just giving the market a breather

  Cramer: FANG isn't dead, just giving the market a breather Jim Cramer explains the pain in the FANG cohort and why headstrong investors should stay the course.All four major indices declined after the closely watched 10-year Treasury yield rose to its highest level since 2011 and home improvement retailer Home Depot missed its earnings estimates.

/ Stocks . Micron Stock Can Rally 85% From Current Levels. Subscribe on Youtube for extended interviews, Cramer Replays, feature content, and more! Investing Stocks Technology Industrials How -to Analyst Actions Growth Investing Software & Services.

That news sent shares of Micron Technology (MU) rallying 1.2%. On Real Money, Cramer says we cannot forget how important Warren Buffett is to this market. Beyond all of that, Cramer said Macy ' s is also smartly fixing its balance sheet, retiring 0 million in debt, instead of chasing stock buybacks.

Shares of Macy's surged more than 10 percent in response, boosting shares of brick-and-mortar retailers like Target and Walmart and apparel makers like PVH.

"The bottom line? Micron and Macy's, two companies with nothing in common except that they'd been written off by the naysayers, managed to ignite a rally when we figured today could bring another sell-off," Cramer concluded. "Feels good, doesn't it?"

Questions for Cramer?

Call Cramer: 1-800-743-CNBC

Want to take a deep dive into Cramer's world? Hit him up!

- - Facebook - Instagram - Vine

Questions, comments, suggestions for the "Mad Money" website?

US stocks set to rally at the open as trade concerns abate .
U.S. stock index futures pointed to triple-digit gains at the open Monday morning, amid hopes of a potential breakthrough in trade tensions.At around 04:55 a.m. ET, Dow futures rose 99 points, indicating a higher implied open of 113 points. The Nasdaq and the S&P 500 futures also indicated an upbeat start to the session for their respective markets.

—   Share news in the SOC. Networks
This is interesting!