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Tech shares climbed Friday to finish the week on a excessive observe, however CNBC’s Jim Cramer expects extra draw back within the tech cohort as buyers proceed to rotate out of high-growth names.
“Prefer it or not, shares are joined on the hip with the bond market proper now,” the “Mad Cash” host stated.
As bond charges rise amid early indicators of an financial restoration, buyers are fleeing from riskier development shares to cyclical ones, notably financial institution and industrial shares which have underperformed, Cramer stated.
The tech-heavy Nasdaq Composite has fallen in latest weeks and stays down 7% from its excessive a few month in the past. The rotation from tech to worth shares, nevertheless, will not final perpetually, Cramer stated.
“Both tech shares get too low … or long-term rates of interest get too excessive. Till that occurs, the rotation will simply proceed to play out,” he stated. “We aren’t there but, however I am assured that we’ll get there finally as a result of that is what at all times ends these vicious sorts of rotations.”
Cramer revealed what’s circled on his calendar within the week forward. Company efficiency projections are primarily based on FactSet estimates:
Tuesday: GameStop, Adobe
- Q4 earnings release: after market; conference call: 5 p.m.
- Projected EPS: $1.35
- Projected revenue: $2.21 billion
“The bulls hope to learn on this call more about [Ryan] Cohen’s plan when the company reports, and if there’s anything good at all about these results, well I expect to see a ton of buying the next day,” Cramer said.
Adobe
- Q1 2021 earnings release: after market; conference call: 5 p.m.
- Projected 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 a great quarter and rates are soaring that day, with the yield on the 10-year approaching 2%, then the earnings won’t matter at all.”
Wednesday: RH, GrowGeneration, General Mills
- Q4 earnings release: after market; conference call: 5 p.m.
- Projected EPS: $4.73
- Projected revenue: $797 million
GrowGeneration
- Q4 earnings release: after market; conference call: Thursday, 9 a.m.
- Projected EPS: 7 cents
- Projected revenue: $61.5 million
“You rarely hear those two mentioned in the same sentence, but right now they represent the most exciting parts of retail,” Cramer said about RH and GrowGeneration.
“I suspect they’ll both report excellent quarters,” he said. “Home furnishings are the most popular part of retail purchasing right now, as we saw from the incredible quarter Williams-Sonoma just delivered, and the cannabis culture … [has] been an unstoppable force as state after state embraces legalization.”
General Mills
- Q3 2021 earnings release: before market; conference call: 9 a.m.
- Projected EPS: 84 cents
- Projected revenue: $4.45 billion
“I like this one as a way to take the temperature of the pantry stocks,” the host said. “I think the reaction will be tepid, but then again Smucker surprised to the upside and I like Hormel very much. So let’s take a listen.”
Thursday: Darden Restaurants
- Q3 2021 earnings release: before market; conference call: 8:30 a.m.
- Projected EPS: 68 cents
- Projected revenue: $1.61 billion
“Do you know we have 150,000 [restaurants] that have closed? It means that the survivors should be in an incredible position, which is why I expect them to crush numbers,” Cramer said of Darden. “The stock’s had a big run, but I think the scarcity value of the stock and the last-man-standing thesis make it compelling.”
Disclosure: Cramer’s charitable trust owns shares of Facebook, Amazon, Goldman Sachs, JPM organ Chase and Wells Fargo.
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