There were a lot of new narratives on Wall Street today, Jim Cramer told his Mad Money viewers, and that's great news for the bulls. If the good news continues overnight, look for the rally to continue tomorrow.
The first bit of good news came from China, where Covid cases are beginning to decline. This is welcomed news for the likes of Apple (AAPL) and Tesla (TSLA) that need to keep factories running. Next, we got better-than-expected earnings from United Airline (UAL), a reassuring signal that the consumer is still in great shape.
We also learned that consumers at Home Depot (HD) aren't cutting back, they're trading up to more expensive items. This is in sharp contrast to Walmart (WMT), which reported abysmal earnings that sent shares down 11%.
Speaking of upgrades, Advanced Micro Devices (AMD) received one Tuesday that sent the entire semiconductor cohort higher. The banks were lifted by news that Warren Buffett is investing in Citigroup (C), making it the "must-have" stock.
Finally, Cramer said it looks like the selling may be subsiding in shares of Walt Disney Co. (DIS).
All eyes are back on China for Wednesday's session, however. If we receive more good news, and more good earnings, then look for the rally to continue. But if there's no good news, then all bets are off and look out below.
Executive Decision: Take-Two Interactive
In his first "Executive Decision" segment, Cramer spoke with Strauss Zelnick, chairman and CEO of Take-Two Interactive Software (TTWO), the game maker that saw its shares soar 11.7% after reporting better-than-expected earnings, but with weaker forward-looking guidance.
Zelnick said Take-Two is growing on the strength of its great titles, like the new NBA 2K22, which is exceeding expectations. They're also excited for many of its newer franchises, like Tiny Tina's Wonderlands, which has also outperformed.
When asked about the acquisition of mobile gaming company Zynga (ZNGA), Zelnick explained that Zynga has a ton of great mobile titles that are the perfect compliment to their existing games. Take-Two will operate Zynga as they do their other acquisitions, as an independent division that is free to follow their passions.
Walmart's Inflation and Supply Chain Woes
When you make $25 million a year, you better get it right, Cramer told viewers. Not only did Walmart's CEO, Doug McMillan, not get it right this quarter, he failed in spectacular fashion.
It was just a few short months ago that Walmart forecast mid-single digit growth at its stores. Just a few short weeks later, sales were down by 1%, sending shares sharply lower as a result, off 11.3%.
What went wrong? In a word, everything. Walmart, the one company that should've had a handle on inflation, supply chains and Covid, lost control of all there.
Cramer said it's hard to overstate how much went wrong for Walmart this quarter. This kind of humiliation would have never happened at Costco (COST) or Target (TGT), he said.
"When the going got tough, Walmart's management was nowhere to be found," Cramer concluded.
Off the Charts
In the "Off The Charts" segment, Cramer checked in with colleague Carley Garner over what's next for energy prices with oil topping $112 a barrel.
Looking at a weekly chart of WTI crude futures, Garner noted that oil has already seen a year's worth of price volatility in just the first five months of the year. What began as an expanding wedge pattern before the war in Ukraine quickly topped the trend line at the start of the war and hasn't looked back.
On the positive side, crude's relative strength indicator, or RSI, is in overbought territory, signaling that a decline in oil prices could be imminent. Cramer noted that if the war in Ukraine ends, that will definitely send oil sharply lower.
The monthly chart of WTI futures confirmed Garner's findings. The RSI on this chart was also overextended and the ceiling for crude sits at the current $120 a barrel, with downside protection down all the way at just $70 a barrel.
Lightning Round
In the Lightning Round, Cramer was bullish on DraftKings (DKNG).
Cramer was bearish on Fisker (FSR), Penn National Gaming (PENN) and GrowGeneration (GRWG).
Executive Decision: Caterpillar
For his final "Executive Decision" segment, Cramer checked in Jim Umpleby, CEO of Caterpillar (CAT), the machinery maker that just completed its first in-person investor day in two years. Shares of Caterpillar were up 2.8% after the company announced a $15 billion share buyback program.
Umpleby said Caterpillar is powering the green energy revolution, helping companies around the globe mine for the minerals needed to make the batteries we all need. Caterpillar has also committed to the electrification of its fleet, and is investing heavily in the technology to make it happen.
Umpleby was also upbeat about Caterpillar's service revenue stream, once again committing to doubling service revenues by 2026. At the end of the day, it's all about making customers successful, Umpleby said, and since some Cat equipment can last for up to 60 years or more, keeping everything running smoothly is a top priority for customers.
When asked about supply chain issues, Umpleby said that Caterpillar has a great team and has been able to work through many of their issues.
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