CNBC’s Jim Cramer said Friday he did not expect 2020 to “start off with such a bang.”
The major U.S. stock averages all fell less than 1% during the session after stocks were dragged down by the latest developments in the Middle East. Late Thursday, reports came out that Iranian military leader Gen. Qasem Soleimani was killed by a U.S. airstrike in Baghdad.
“The Iran situation has given us something new to worry about,” the “Mad Money” host said, “but the economy remains strong, so strong that let’s just try to stay opportunistic, please, as we head into the first full week of a fabulous new decade.”
Monday: Iran response; manufacturing data
Stocks are likely to drop on Monday as investors anticipate Iran’s retaliation to the airstrike President Donald Trump ordered that killed Iran’s top military commander. The attack is a tipping point in increasing tensions between the U.S. and Iran.
Oil prices spiked in Friday’s session to their highest levels since April, but Cramer said there’s not much Iran can do to disrupt the global oil supply because the U.S. is able to offset potential shortages.
“While the averages could get hurt on Monday, I’m urging you please don’t panic,” he said. “No one ever made a dime panicking.”
Investors will get a read on the manufacturing economy when the Purchasing Managers’ Index for December comes out.
“I think we’ll see a continuation of the same trend: decent growth,” Cramer said, but “nothing too exciting.”
Tuesday: Durable goods orders
The U.S. Census Bureau is out with durable goods orders, an economic indicator of the amount of business that domestic manufacturers are doing.
“The biggest durable goods [are] airplanes, and the biggest airplane — in terms of sales — Boeing‘s 737 Max,” Cramer said. “Now, we don’t know if that plane will ever fly again … and I think that might be the biggest problem in the economy.”
Wednesday: Walgreens, Lennar, Constellation Brands, Bed Bath & Beyond earnings
Walgreens Boots Alliance reports first-quarter earnings from its 2020 fiscal year in the morning. The pharmacy is projected to deliver nearly $34.6 billion in sales and $1.41 in earnings per share, according to Factset. The company is losing market share because of competition from Amazon on the retail side and emerging ways consumers are buying drugs, Cramer noted.
“You want pharmacy exposure? Go buy the higher-quality CVS, which has its own pharmacy benefit manager, Caremark, and its own health maintenance organization, Aetna,” he said.
Lennar, one of the largest U.S. homebuilders, releases its fourth-quarter results before the market opens. The company is expected to bring in almost $6.5 billion in sales and $1.90 of earnings per share.
“This whole industry doesn’t get enough respect,” Cramer said. “Lennar’s incredibly well-run with seemingly endless margin expansion, and I think it’s in a great position now that millennials are finally starting to buy homes in large numbers.”
Constellation Brands reports third-quarter earnings for the 2020 fiscal year before the morning bell. The Corona maker is estimated to bring in $1.9 billion in revenue and produce $1.84 of profit per share. The company has been weighed down, however, by its $4 billion stake in Canopy Growth, which has taken a hit along with the rest of the cannabis industry.
“I think this company is too good to be written off,” Cramer said. “At some point the cannabis industry will be worth dominating, but that might not be very soon.”
Bed Bath & Beyond has an earnings release after the market closes. Analyst consensus estimates the embattled retailer will do $2.85 billion in business, while yielding 2 cents of earnings per share. The company is being led by former Target CEO Mark Tritton, who is trying to engineer a turnaround as activist investors look to revamp the stock’s direction.
“I’m inclined to be skeptical, too, although there are so many easy changes they could make,” Cramer said, “and the balance sheet is so robust that the stock makes sense for speculation.”
Friday: Jobs report
The U.S. Labor Department will reveal its non-farm payroll report for December, which could impact the market’s direction.
“Good or bad, I think the stock market will exaggerate either forecast. That said, if stocks run too much into the employment report and we get a strong number, expect the averages to get hit,” creating a “buying opportunity.”
Disclosure: Cramer’s charitable trust owns shares of CVS.