We recently published a list of Jim Cramer Recently Discussed These 13 Stocks Interest Rates And Recession. In this article, we are going to take a look at where The Home Depot, Inc. (NYSE:HD) stands against other stocks that Jim Cramer recently discussed.
In his appearance on CNBC’s Squawk on the Street earlier this month, Jim Cramer commented on the Labor Department’s December employment report. The report saw the US economy add 256,000 new jobs which was significantly higher than the 155,000 jobs that economists were expecting. It was the last jobs print of the Biden administration, and the data also showed unemployment dropping to 4.1%.
Cramer’s remarks for the jobs report focused on its impact on the stock market as stocks fell. Stocks had dropped because investors believed that the fresh data would disincentivize the Federal Reserve from reducing interest rates. However, Cramer had “trouble being really negative on that. 25 cents maybe, 30 cents. But when I see this number what I say to myself is, okay, would you prefer earnings to be good? Cause this isn’t earnings to be good. Or would you prefer rate cuts?” The CNBC host prefers positive earnings over potential rate cuts. He shared, “Anytime I can get earnings to be good, I vastly prefer that to rate cuts because rate cuts don’t necessarily translate into EPS. We are in the end, preachers of what makes stocks move. I know that if you want to pay more for bonds, we get an interest rate that’s higher, that’s supposed to be really bad for stocks.”
According to Cramer, “What’s really bad for stocks is employment. Is recession.” Consequently, his optimism stemmed from the fact that “These numbers are so far away from [a] recession that the only thing I conclude, David, is this that the Fed got it wrong. But that doesn’t mean necessarily, that, CEOs are gonna get it wrong. That businesses are going to get it wrong. We do not have a number that’s going to wipe out companies. We have a number that’s going to keep this economy afloat regardless of what the Fed does.”
As investors re-calibrated their expectations to higher for longer once again, bond yields rose since bonds with current rates were sold. Cramer commented on the yields rising and stated, “We’ll get to readjust. This is a reset moment. The question is . . do we have to say, like John Gibson [CEO of a payroll processor] said to me. . . that none of this stuff ever factors in the small to medium-sized business. Of which he said there was a huge flood of optimism, after the election. Now, to say well what happened is people were waiting to see whether Vice President Harris was elected and therefore they wouldn’t expand versus President-elect Trump would expand.”
The positivity in the market after the elections was because investors “had a resolution to” the perceived differences between former Vice President Kamala Harris and President Donald Trump’s policies. Cramer added that “once they had a resolution, they wanted to hire again. Now this isn’t me talking. This is the guy whose, whose the largest payroll processor in the country of small to medium-sized businesses, and he was talking about getting involved, and being on the Fed and saying that the Fed really is out of touch. Well, I think that what we saw, I don’t wanna, you know I respect Jay Powell greatly, but maybe they didn’t understand that once you got the election out of the way there could be bullishness no matter what.”
Even as investors briefly fled from the market following the jobs report, Cramer didn’t mind that the data had massively overshot economist expectations. He outlined, “I vastly prefer that we have more people being hired. Forty-six thousand healthcare. Forty-five, forty-three thousand in retail. Are these things, that really are inflationary, when we have mining, quarrying, oil and gas, construction, manufacturing, wholesale trade, transportation, warehouse, information, financial activities, professional and business, no change.”
As a result, Cramer pinpointed, “We can decide that bonds should control the whole dialogue. Or we can look at” data from airlines and retailers and discount it. Delta. “And what are we supposed to say, you know what, I don’t count those earnings because of the ten year? No of course not,” he asserted.
Commenting further on the rate cuts, he shared:
“Look, the rate cut was ill-advised. In retrospect. The last one was. I did fifty, and then twenty five, then twenty five. Though twenty five was not data dependent. They’re supposed to be data dependent. That was not data dependent. They made a mistake. Really.”
Subsequently, Cramer concluded, “I’m not going to hold what I feel about the S&P, hostage, for this increase in yields.”
Our Methodology
To make our list of the stocks that Jim Cramer talked about, we listed down all the stocks he mentioned during CNBC’s Squawk on the Street aired recently.
For these stocks, we also mentioned the number of hedge fund investors. Why are we interested in the stocks that hedge funds invest in? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here).
A home improvement store overflowing with a variety of products and supplies.
The Home Depot, Inc. (NYSE:HD)
Number of Hedge Fund Holders In Q3 2024: 82
The Home Depot, Inc. (NYSE:HD) is one of the biggest home improvement retailers in America. Its exposure to the home building and home improvement market means that the firm is dependent quite a bit on interest rates for its performance. Consequently, the fact that The Home Depot, Inc. (NYSE:HD)’s shares have gained a modest 17.5% over the past year is unsurprising as high rates have dented demand for its products. On the day Cramer commented on the firm, its shares were down. However, he remained optimistic:
“[On HD being down] Well that’s a mistake. It’ll be up soon. we’re buying it right now for the charitable trust.”
Overall, HD ranks 4th on our list of stocks that Jim Cramer recently discussed. While we acknowledge the potential of HD as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than HD but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
