As a positive earnings report from Delta Air Lines boosted the averages on Thursday, CNBC’s Jim Cramer noticed some unusual trading action occurring that he pegged to the bull.
“Oil and airlines, they don’t mix. Jet fuel is the No. 1 cost for the airlines, so they shouldn’t be able to rally at the same time — unless it’s their stocks we are talking about,” the “Mad Money” host said. “I keep highlighting the bizarrely bullish ways that stocks are trading and sometimes they’re totally in your face, like this simultaneous move in the price of oil and the airline stocks.”
And it’s not like the market has forgotten the effects of rising oil prices on the airlines — shares of Boeing also got a boost because airlines can buy new jets that use less fuel from Boeing to lower their fuel costs.
But Cramer remained puzzled by the market’s obsession with volatile cryptocurrency bitcoin in the face of actual gains from stocks like Boeing.
He shared a story of two cigarette-puffing Wall Streeters asking him incessantly to comment on bitcoin. “No bitcoin,” he told them. “Boeing.”
“I might as well have said, ‘Put down those Marlboros and let’s go have some of my wife’s quinoa,'” Cramer said. “Their contempt was palpable. I’m chalking it up to millennial lunacy.”
Friday marks the unofficial start of earnings season, with big banks J.P. Morgan, Wells Fargo and PNC Financial reporting their quarterly numbers.
But Cramer knows the fourth quarter tends to be “messier” for financial companies, so he wanted to make sure investors were prepared for the big day.
“I’m not trying to predict which banks will do well and which ones won’t,” he said. “I simply want to help separate the signal from the noise so that you’ll be in a position to understand what’s actually happening as it happens.”
Cramer’s top concern? When it became clear in December that the tax bill would pass, major lenders like Citigroup started to incur one-time, multi-billion-dollar charges in order to offset future taxes, which could make these earnings look “horrendous,” the “Mad Money” host said.
A day of speaking with the retail industry’s top brass at the ICR’s Conference in Orlando, Florida made Cramer realize that Wall Street might be discounting the sector’s comeback.
“We’re being way too cavalier about the return of retail, including mall-based retail and what it really means,” the “Mad Money” host said. “We just can’t believe that any of these companies can really escape the clutches of the Death Star, Amazon.”
After hearing that Kohl’s delivered same-store sales of over 5 percent for the first time since 2001 and that Children’s Place logged an 8.5 percent gain in holiday-season same-store sales, Cramer sensed that these were more than just positive blips on the retail radar screen.
Then, when Target and Nordstrom’s earnings kicked into high gear and both companies raised their holiday sales forecasts, Cramer started to suspect a genuine turn in the group as a whole.
With that in mind, Cramer shared five factors that could be driving the retail sector back into Wall Street’s good graces.
Denny’s turnaround is all but a wholesale reinvention of the old-line diner chain, President and CEO John Miller told CNBC in an interview with Cramer.
“People said they want their old diner back,” Miller told Cramer at the ICR Conference. “It needed to be a place appropriate for dinner, so we warmed it up a little, divided the spaces.”
Now, about 67 percent of the Denny’s network has embraced the chain’s new image, with that number expected to rise to 80 percent by the end of 2018, Miller said.
Besides refurbishing the stores, Denny’s also introduced Denny’s On Demand, which lets customers order food for take-out or delivery; new packaging for its food; health-focused meal options; value-oriented menus starting at $2; and meal personalization.
“We believe … a great society runs best when you sort of push responsibility down,” Miller said. “Give people choice. Let them make their own decision. You want to indulge in a shake on Sunday, we’ll sell it to you. But Monday morning you can have a Fit Slam egg white omelet.”
Away’s digital-savvy luggage (complete with USB charging ports) has been exploding in popularity in two ways, co-founder and CEO Steph Korey told CNBC.
“The No. 1 way our customers find out about us is a recommendation from a friend,” Korey told Cramer at the ICR Conference. “We find that if we can create a special experience – like our web experience, our purchasing experience, our in-store experience, our product experience, how you travel – if we can create something that leaves a lasting impression with people, that’s so rare these days that they’ll tell everyone they know about it.”
The second-biggest way people hear about Away? Instagram. And Korey said that’s not only because of her company’s social media prowess.
“Everyone’s Instagramming when they’re traveling and when they’re seeing the world, so what we’ve really done is highly encourage our customers that when you’re traveling and doing cool things, share it,” she said. “Inspire your networks and share what you’re doing. So now, when people are traveling, they’re going somewhere new, they’re Instagramming themselves with their luggage and that’s how people are finding out about it.”
In Cramer’s lightning round, he zoomed through his take on some callers’ favorite stocks:
Core Laboratories: “I like Core Labs, but no need to go there if you own Schlumberger. Stick with that horse and buy more if it goes back to $72.”
Cedar Fair, L.P.: “You know what, I like them. I like how they’re very streamlined and, most of all, I like the 5 percent yield.”