CNBC’s Jim Cramer broke down the looming week of earnings reports with quarterly results coming from the likes of Facebook, Apple, Amazon and Microsoft. The coronavirus outbreak will cast a shadow over the week and could discount stocks for investors to pick from, the “Mad Money” host said. Later in the show, he broke down L Brands’ predicament and explained why he thinks multiple analyst upgrades on the stock are misguided.
Earnings season and coronavirus
As fears of the coronavirus grow, stock prices are likely to contract and investors should be prepared for buying opportunities, CNBC’s said Friday.
“We’ve got a huge number of companies reporting next week, but the biggest story by far will be the coronavirus outbreak,” the “Mad Money” host said. “If a high-quality stock gets slammed, and that stock has nothing to do with travel or with China, then use the overall decline to pounce on it.”
The Dow Jones Industrial Average finished the week of trading in the red as worries about the spreading deadly disease helped bring the index down 170 points during the session. The S&P 500 and Nasdaq Composite also posted down weeks, declining almost 1% the same day a second person was diagnosed with coronavirus in the U.S.
The flu-like virus originated in China and has led to the death of 41 people and spread to more than 1,000 others globally.
“In the end, this market wants answers and the Chinese government is not being forthcoming about how the disease is contracted or how it can be treated,” said Cramer, who has warned that the epidemic could put a dent in the travel industry and associated businesses.
“Going into next week, this illness could eclipse the many earnings stories that we have coming up, because it is a big week,” he said.
Cramer went on to present his game plan for the week ahead.
L Brands’ precarious position
Cramer said that he is perplexed by the bullish reviews , the holding company of Victoria’s Secret and Bath & Body Works, has received from the analyst community.
Four analysts have turned positive on the downtrodden stock since the beginning of the trading year, forecasting that a shakeup is on the horizon.
“See, L Brands is practically a disaster area,” the host said, noting the stock has lost most of its value since late 2015. “They have a major presence in shopping malls all over the country, especially Victoria’s Secret, so the steady decline of the mall has crushed them.”
Cramer’s lightning round
In Cramer’s lightning round, the “Mad Money” host delivered his thoughts about callers’ favorite stock picks in rapid speed.
: “Oh, that quarter was beautiful. … and they did it with millennials. Millennials are really signing up, 50% of the new cards. So that business is great.”
: “I do not know Inseego. Wish I did.”