Jim Cramer, the host of Mad Money, recently shared his thoughts on the upcoming earnings season, emphasizing that investors should tread carefully and avoid making any big moves.
“When people think about an exciting time for stocks, they think of the next two weeks, that’s when some of the most important consequential companies on Earth report, practically at the same time. Throw in the actions of the new president and all I can say is, we’re not gonna have any idea what the heck we’re doing until we have time, probably at night to sift through all the data points and study all the conference calls.”
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Cramer stressed that the current week, in particular, is too difficult for snap judgments. He warned that the Federal Reserve’s decision on Wednesday will only add to the uncertainty. At one point, it seemed like the market could expect a rate cut, which would push stocks higher, but then Amex reported that its customers were spending at a rapid pace. He said:
“But when American Express says today that its millions of customers are spending like mad, the Fed can’t possibly give us a rate cut, can it?”
He added that if the Fed does lower rates on Wednesday, it would likely be because Chairman Jerome Powell has caved to President Trump’s demand for immediate cuts. In this complex situation, Cramer advised investors to just sit tight and not act, pointing out that it would be a “no-win situation” for Powell.
As if the pressure of earnings reports and the Fed’s decision were not enough, Cramer also noted that this week would feature the release of the Fed’s favored inflation measure, the Personal Consumption Expenditures (PCE) price index. However, Cramer does not expect good news, given the high level of consumer spending.
“The exhausting bottom line: Look it’s a sheer hell week. Our heads will be spinning, swivel-like, lazy Susan even, as each day you can expect a flood of earnings and a sound bite from President Trump that upsets whatever order there might be. Like I always say, don’t try to make decisions during this part of earnings season, just listen. It’s too hard and I don’t want you to lose money just because this is one of eight super exciting weeks of the year.”
Our Methodology
For this article, we compiled a list of 14 stocks that were discussed by Jim Cramer during the episode of Mad Money on January 24. We listed the stocks in the order that Cramer mentioned them. We also provided hedge fund sentiment for each stock as of the third quarter of 2024, which was taken from Insider Monkey’s database of 900 hedge funds.
Why are we interested in the stocks that hedge funds pile into? 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).
14. Exxon Mobil Corporation (NYSE:XOM)
Number of Hedge Fund Holders: 86
Cramer noted the possibility that big oil companies might increase drilling under pressure from President Trump, who would likely target larger companies like Exxon Mobil Corporation (NYSE:XOM).
“Finally, Friday brings numbers from oil giant Chevron and Exxon. I don’t wanna own the oils here because who knows if they cave to President Trump and start drilling like mad. I think they’re gonna stay disciplined but if Trump wants more drilling, do you think he’ll pick one of the little guys? No way. He’ll go straight to Exxon and Chevron.”
Exxon (NYSE:XOM) is involved in the exploration and extraction of crude oil and natural gas. The company’s Corporate Plan for 2030, announced in December 2024, aims to boost earnings by $20 billion and cash flow by $30 billion over the next six years, with a focus on achieving 10% earnings growth and 8% cash flow growth.
The company plans to generate $7 billion in cost savings by streamlining operations and modernizing systems. Exxon’s (NYSE:XOM) capital allocation strategy prioritizes high-return investments, including a $140 billion commitment to major projects and Permian Basin development, expected to yield returns over 30%. This focus on strong investment returns has led to 42 years of consecutive dividend growth.
13. Chevron Corporation (NYSE:CVX)
Number of Hedge Fund Holders: 63
Chevron Corporation (NYSE:CVX) operates globally in the energy and chemicals sector, focusing on oil and gas exploration, production, transportation, refining, and the manufacturing of renewable fuels and petrochemicals. Talking about the company, Cramer commented:
“Finally, Friday brings numbers from oil giant Chevron and Exxon. I don’t wanna own the oils here because who knows if they cave to President Trump and start drilling like mad. I think they’re gonna stay disciplined but if Trump wants more drilling, do you think he’ll pick one of the little guys? No way. He’ll go straight to Exxon and Chevron.”
Early January, Cramer talked about Chevron Corporation (NYSE:CVX), noting its 4.5% yield as of the end of last year. He pointed out that the stock has essentially remained unchanged for the past two and a half years, staying relatively flat since the peak of inflation through mid-2022.
“That’s happened amid declining or stagnant energy prices and some company-specific issues like a major deal to acquire Hess, which has languished for a few reasons, including a dispute with Exxon over certain international projects but I think it’s going to be hard to keep Chevron stock down for much longer. At the end of the day, I’m less sanguine than most about the oil industry under Trump because of “drill baby drill” policy and that means more supply and more supply translates of course to lower prices.
However, there will obviously be some benefits for the integrated oils from a new regime in Washington that’s infinitely more fossil fuel-friendly than the alkaline Biden White House. Chevron, it currently sells for less than 13 times this year’s earnings estimate, offering good value in a market [that] looks increasingly stretched in places and that nearly 4.5% yield, I don’t know that seals the deal for me.”
