The stock market doesn’t make judgment calls, investors do, Jim Cramer reminded his Mad Money viewers Monday. That’s how the major averages were able to rally on a day with protests and riots in major cities across America. The market has no eyes and no ears, Cramer said, it’s merely a place people go to make money.
There’s a big difference between the political world and the investing world. President Trump’s tough stance against China, for example, means a lot geopolitically, but outside of the stocks of Nike (NKE) – Get Report, Starbucks (SBUX) – Get Report and Apple (AAPL) – Get Report, isn’t likely to affect your portfolio.
As for the violent protests and civil unrest, Cramer said the likely outcome is that we’ll see a resurgence of COVID-19, which will cause businesses to stay closed longer. That means the stay-at-home stocks like Zoom Video (ZM) – Get Report, Amazon (AMZN) – Get Report and DocuSign (DOCU) – Get Report will still be in demand. So, too, will cybersecurity stocks like Zscaler (ZS) – Get Report, which rose another 12% Monday, Okta (OKTA) – Get Report and Crowdstrike (CRWD) – Get Report.
Remember that the stock market has no conscience, Cramer concluded. It should always be looked at through the prism of making money.
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Executive Decision: Chipotle Mexican Grill
In his first “Executive Decision” segment of the week, Cramer spoke with Brian Niccol, chairman and CEO of Chipotle Mexican Grill (CMG) – Get Report, the restaurant chain with shares up 35% over the past three months.
Niccol said Chipotle continues to invest in technology, innovation and its people and all of those efforts have paid off during this pandemic. Even as the company cautiously reopens some of their dining rooms, Niccol expected the bulk of their gains in digital ordering to remain.
As for their people, Niccol said everyone at Chipotle cares about cultivating a better world and no matter what they decide to do, they have a “get it done” attitude that is very powerful. New innovations like their “Chipotlanes” drive through service, which combines their great quality food with speed and convenience, is just one of the things that keeps them on the cutting edge.
When asked about the effects of the protests on their restaurants, Niccol said the damage to their restaurants hurts on many levels. He said all of their employees are safe, which is what matters. The damage, he said, will all be fixed.
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Executive Decision: Ulta Beauty
Dillon said Ulta is by no means a recession-proof stock, but they do have a strong business model that’s driven by the diversity of products and services they offer. When the pandemic hit in March, they were forced to become an online-only operation overnight and her team executed brilliantly. Currently, nearly 75% of Ulta stores are now open for curbside pickup, with 50% being fully open with new health and safety measures.
Dillon added that customers have shown they want to shop at Ulta’s stores and they’ve responded well to both curbside pickup and the new in-store protocols. In today’s world of online meetings, everyone wants to look their best, she said, and there is pent-up demand for beauty products.
Finally, Dillon reiterated that at Ulta, diversity and representation matter. Beauty in all of us, she said, and that’s something that Ulta celebrates.
In his “No-Huddle Offense” segment, Cramer said there are big businesses in America that are driving meaningful change in our local communities. He singled out companies like IBM (IBM) – Get Report, which has been investing in underprivileged kids through its P-Tech schools. He said that Lowe’s (LOW) – Get Report supports diversity and has donated $25 million to minority-owned businesses around their stores. And then there’s Target (TGT) – Get Report, which has offered up first aid supplies to protestors getting caught in the political crossfire.
There are countless businesses like these trying to make a difference, Cramer concluded. Business is stepping in where governments used to tread.
Off the Charts: Gold
In his “Off The Charts” segment, Cramer checked in with colleague Carley Garner over the chart of gold, which failed to rally in Monday’s session, despite the civil unrest.
Garner noted that the seasonal patterns for gold are not in the precious metal’s favor. Prices historically don’t firm up again for gold until September.
Garner then looked at gold prices versus the U.S. dollar. Typically, gold moves higher as the dollar weakens, but recently, the two have been moving in tandem. Garner felt this pattern many offer gold a floor of support.
But what most worried Garner was the commitment of traders report, which showed large speculators with a huge long position in gold. With so much bullishness, Garner felt there weren’t many investors left to buy. Given that gold has tried and failed to breach its ceiling of resistance at $1,800 an ounce, she felt that after another short leg higher, the next direction for gold would be down.
Here’s what Jim Cramer had to say about some of the stocks that callers offered up during the Mad Money Lightning Round Monday evening:
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At the time of publication, Cramer’s Action Alerts PLUS had a position in AMZN, SBUX, AAPL.