Technical stocks climbed on Friday to end the week on a high note, but CNBC’s Jim Cramer expects there will be more downsides in the technology cohort as investors continue to spin their names with high growth.
“Like it or not, stocks are currently linked to the bond by the bond market,” the ‘Mad Money’ host said.
As bond prices rise amid early signs of an economic recovery, investors are fleeing more risky growth stocks to cyclical stocks, especially bank and industry stocks that have underperformed, Cramer said.
The technology-heavy Nasdaq Composite has fallen in recent weeks and remains 7% lower than the high point of about a month ago. However, the transition from technology to value stocks will not last forever, Cramer said.
“Either tech stocks are getting too low … or long-term interest rates are getting too high. Until that happens, the rotation will just keep playing,” he said. “We are not there yet, but I am confident that we will finally get there, because that is what always ends the evil kind of rotations.”
Cramer revealed in the coming week what has been circulated on his calendar. Corporate performance predictions are based on FactSet estimates:
Tuesday: GameStop, Adobe
- Quarterly earnings release: to market; conference call: 17:00
- Projected EPS: $ 1.35
- Projected revenue: $ 2.21 billion
‘The bulls hope to learn more about this call [Ryan] “Cohen’s plan when the company reports, and if there is anything good about these results, I expect to buy a lot the next day,” Cramer said.
Adobe
- Q1 2021 release of earnings: to market; conference call: 17:00
- Projected EPS: $ 2.79
- Estimated revenue: $ 3.76 billion
“Unfortunately, the results are less important than the state of the Wall Street fashion show,” he said. “If Adobe reports a big quarter and rates rise that day, with returns on the 10-year 2%, then earnings will not matter at all.”
Wednesday: RH, GrowGeneration, General Mills
- Quarterly earnings release: to market; conference call: 17:00
- Projected EPS: $ 4.73
- Predicted revenue: $ 797 million
GrowGeneration
- Quarterly earnings release: to market; conference call: Thursday, 09:00
- Projected EPS: 7 cents
- Predicted revenue: $ 61.5 million
“You rarely hear the two mentioned in the same sentence, but at the moment they represent the most exciting parts of retail,” Cramer said of RH and GrowGeneration.
“I suspect they will both report excellent quarters,” he said. ‘Home furniture is currently the most popular part of buying from retailers, as we saw in the incredible quarter that Williams-Sonoma just delivered, and the marijuana culture … [has] an unstoppable power as a state after the state accepts legalization. ‘
General mills
- Q3 2021 release of earnings: before market; conference call: 9 am
- Projected EPS: 84 cents
- Estimated revenue: $ 4.45 billion
“I like this one as a way to take the temperature of the pantry supplies,” the host said. “I think the reaction will be lukewarm, but then Smucker is upside down again and I like Hormel a lot. Let’s just listen.”
Thursday: Darden Restaurants
- Q3 2021 release of earnings: before market; conference call: 08:30
- Projected EPS: 68 cents
- Estimated revenue: $ 1.61 billion
‘Do you know we have 150,000 [restaurants] what closed? “That means the survivors have to be in an incredible position, so I expect them to crush numbers,” Cramer said of Darden. The stock has had a great run, but I think the scarcity of the stock and the last man-understanding thesis make it fascinating. “
Disclosure: Cramer’s charity owns shares in Facebook, Amazon, Goldman Sachs, JPM organ Chase and Wells Fargo.
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