Jim Cramer looks ahead to next week's market game plan

Key Concepts:

• Tariffs and their impact on the market
• Stagflation and recession fears
• Consumer sentiment and spending
• Homebuilder stocks and housing market trends
• Retail sector challenges (Dollar stores, Walmart)
• Earnings reports and company-specific analysis
• Mergers and acquisitions (Capital One & Discover Financial Services)
• Importance of profitability and growth in stock selection
• The Fed's role and inflation indicators (PCE)

1. Market Overview and Sentiment:

• Initial Market Reaction: The market initially reacted negatively to earnings updates from Nike and FedEx, and overnight investor sentiment turned negative on Micron despite a positive initial reaction.
• Trump's "Flexibility" on Tariffs: President Trump's indication of "flexibility" on tariffs provided a glimmer of hope and helped the market recover from a negative opening.
• Overwhelming Negativity: Cramer emphasizes that there is too much gloom in the market, creating buying opportunities that are being ignored.
• Stagflation Concerns: The analyst hedge fund Journal Complex is emphasizing a stagflation moment, but Cramer is not buying it.
• Late Friday Selling: Investors have been booking profits due to the fear of weekend truth social posts that could roil the market.

2. Next Week's Game Plan (Company Analysis):

• KB Home (Reports Monday):
  • Homebuilder facing inflation and high mortgage rate issues.
  • Stock is down significantly, but Cramer doesn't see a bottom yet.
  • Recommends Toll Brothers as a better option in the homebuilding sector.
• McCormick (Reports Tuesday):
  • Spice company expected to perform well during a recession as people cook at home more.
  • Dominates the spice and seasoning aisles.
• GameStop (Reports Tuesday):
  • Stock tends to rise before and during earnings but lags afterward.
  • Cramer advises against trying to "game GameStop."
• Dollar Tree (Reports Wednesday):
  • No longer represents the value it once did due to price increases and reduced sizes.
  • Cramer recommends staying away from the stock.
  • Even Walmart is struggling.
• Cintas (Reports Wednesday):
  • Uniform and services provider for small to medium-sized businesses.
  • Cramer is worried about small business formation and its impact on Cintas.
• Paychex (Reports Wednesday):
  • Payroll processor with many bearish analysts covering it.
  • Cramer believes Paychex will continue to do well.
• Chewy (Reports Wednesday):
  • Online pet food store that has been performing strongly.
  • "Crushing it" since calling the bottom on Mad Money.
• Lululemon (Reports Thursday):
  • Battleground stock with many short sellers betting against it due to its high price point.
  • Cramer believes it's a remarkable company and recommends buying on weakness.
• Dutch Bros (Investor Day Thursday):
  • Expensive stock, but a regional and national growth story for the coffee chain.
  • Can be bought on weakness.

3. Economic Indicators and Events:

• Pending Home Sales (Thursday): Used to assess the slowdown in housing.
• Personal Consumption Expenditure (PCE) Numbers (Thursday): The Fed's favorite inflation indicator.
• University of Michigan Consumer Sentiment Index (Friday): Will confirm the negative sentiment seen in the last couple of weeks if it's real negative.

4. Listener Questions and Stock Recommendations:

• Ford Motor (F): Cramer is not positive on Ford due to warranty problems and prefers GM.
• Costco (COST): Cramer is bullish on Costco, stating that the stock is too low and recommends buying some now and next week. He dismisses concerns about the company's stance on Trump's ideas.
• Discover Financial Services (DFS): Cramer believes the Capital One merger with Discover Financial Services will go through and recommends sticking with Capital One.

5. Conclusion:

• Expect more uncertainty and volatility until there is resolution on the trade front.
• There is too much negativity in the market, but it creates opportunities to "pounce" when it gets extreme for no reason.
• Next week is packed with earnings reports and economic data that could move the market.