Technology stocks rose on Friday to end the week on a high note, but CNBC’s Jim Cramer expects to have more disadvantages in the technology cohort as investors continue to spin on high-growth names.
“Like it or not, the shares are tied at the hip with the bond market right now,” said Mad Money host.
As bond rates rise amid early signs of an economic recovery, investors are fleeing riskier to cyclical growth stocks, especially poorly performing banking and industrial stocks, Cramer said.
Nasdaq Composite, with a technological intensity, has decreased in recent weeks and remains down 7% from the maximum of a month ago. However, the rotation from technology to value stocks will not last forever, Cramer said.
“Either the technology stocks become too small … or the long-term interest rates become too high. Until that happens, the rotation will continue,” he said. “We’re not there yet, but I’m confident we’ll get there eventually because that always puts an end to these kinds of vicious rotations.”
Cramer revealed what was around his calendar the following week. Corporate performance projections are based on FactSet estimates:
Tuesday: GameStop, Adobe
- Launch of Q4 earnings: by market; phone call: 17:00
- Designed EPS: $ 1.35
- Projected revenue: $ 2.21 billion
“The bulls hope to learn more about this call [Ryan] Cohen’s plan when the company reports, and if there’s anything good about those results, I expect to see a lot of shopping the next day, “Cramer said.
Adobe
- Launch of earnings for the first quarter of 2021: by market; phone call: 17:00
- Designed EPS: $ 2.79
- Projected revenue: $ 3.76 billion
“Unfortunately, the results are less important than the state of the Wall Street fashion show,” he said. “If Adobe reports an extraordinary quarter and rates rise that day, with a 10-year yield close to 2%, then earnings won’t count at all.”
Wednesday: RH, GrowGeneration, General Mills
- Launch of Q4 earnings: by market; phone call: 17:00
- Designed EPS: $ 4.73
- Projected revenue: $ 797 million
GrowGeneration
- Launch of Q4 earnings: by market; conference call: Thursday, 9 am
- Designed EPS: 7 cents
- Projected revenue: $ 61.5 million
“You rarely hear the two mentioned in the same sentence, but right now they are the most interesting parts of retail,” Cramer said of HR and GrowGeneration.
“I suspect they will both report excellent places,” he said. “Home furniture is the most popular part of retailing right now, as we saw from the incredible Williams-Sonoma neighborhood just delivered and from the cannabis culture … [has] it has been an unstoppable force, as state after state embraces legalization. “
General Mills
- Launch of earnings for Q3 2021: before the market; conference call: 9:00
- Designed EPS: 84 cents
- Projected revenue: $ 4.45 billion
“I like this as a way to take the temperature of pantry stocks,” the host said. “I think the reaction will be warm, but again Smucker surprised me to the end and I really like Hormel. So let’s listen.”
Thursday: Darden Restaurant
- Launch of earnings for Q3 2021: before the market; phone call: 8:30 am
- Designed EPS: 68 cents
- Projected revenue: $ 1.61 billion
“You know we have 150,000 [restaurants] which closed? It means survivors should be in an incredible position, which is why I expect them to crush the numbers, “Cramer said of Darden.” The shares had a great evolution, but I think that the value of the rarity of the stock and of the last man – the thesis in force makes it convincing. “
Disclosure: The Cramer charity holds shares in Facebook, Amazon, Goldman Sachs, JPM Chase and Wells Fargo.
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