Technology stocks rose Friday to end the week on a high note, but CNBC’s Jim Cramer expects more disadvantages in the technology cohort as investors continue to come out of high-growth names.
“Like it or not, stocks are currently joining the bond market,” the “Mad Money” host said.
As bond rates rise amid early signs of economic recovery, investors are fleeing riskier growth stocks in the cyclical, particularly lower-yielding banking and industrial stocks, Cramer said.
The high-tech Nasdaq Composite has fallen in recent weeks and is down 7% from about a month ago. The rotation of technology to value stocks, however, will not last forever, Cramer said.
“Either the technology stocks are too low … or the long-term interest rates are too high. Until that happens, the rotation will continue to develop,” he said. “We’re not there yet, but I’m confident we’ll finally get there because that’s what always puts an end to this kind of vicious rotations.”
Cramer revealed what was around his calendar the following week. Corporate performance projections are based on FactSet estimates:
Tuesday: GameStop, Adobe
- Fourth Quarter Profit Launch: After Market; conference call: 5 pm
- Expected EPS: $ 1.35
- Expected Revenue: $ 2.21 million
“Bulls are waiting to learn more about this call [Ryan] Cohen’s plan when he informs the company, and if there’s anything good in those results, I hope he sees a lot of purchases the next day, ”Cramer said.
Adobe
- Launch of profits in the first quarter of 2021: after the market; conference call: 5 pm
- Expected EPS: $ 2.79
- Expected Revenue: $ 3,766 million
“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 go up that day, with a 10-year yield approaching 2%, profits won’t matter at all.”
Wednesday: HR, GrowGeneration, General Mills
- Fourth quarter earnings release: after market; conference call: 5 pm
- Expected EPS: $ 4.73
- Expected Revenue: $ 797 million
GrowGeneration
- Fourth quarter earnings release: after market; conference call: Thursday, 9 p.m.
- Projected EPS: 7 cents
- Projected Revenue: $ 61.5 million
“You rarely hear the two mentioned in the same sentence, but right now they represent the most exciting parts of retail,” Cramer said of HR and GrowGeneration.
“I suspect both will report excellent quarters,” he said. “Home furniture is the most popular part of retail shopping right now, as we’ve seen in the amazing Williams-Sonoma area we just delivered and to the cannabis culture … [has] it has been an unstoppable force as state after state embraces legalization. “
General Mills
- Launch of profits in the third quarter of 2021: before the market; conference call: 9 h
- Expected EPS: 84 cents
- Expected Revenue: $ 4,452 million
“I like this as a way to take the temperature of pantry reserves,” the host said. “I think the reaction will be lukewarm, but again Smucker surprised me on the downside and I really like Hormel. So let’s listen.”
Thursday: Darden restaurants
- Launch of profits in the third quarter of 2021: before the market; conference call: 8:30 am
- Expected EPS: 68 cents
- Expected Revenue: $ 1.65 billion
“You know we have 150,000 [restaurants] who have closed? It means survivors should be in an incredible position, and that’s why I hope they crush the numbers, “Cramer said of Darden.” Stocks have had a great run, but I think the scarcity of stock value and the latter – the current thesis makes it compelling. “
Disclosure: Cramer’s charitable fund has shares in Facebook, Amazon, Goldman Sachs, the JPM Chase organ and Wells Fargo.
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