Tech stocks climbed to end the week at high levels on Friday, but CNBC’s Jim Cramer expects more downward moves in the tech cohort as investors continue to turn away from high-growth names.
“Like it or not, stocks are currently on the hip with the bond market,” said the Mad Money host.
As bond rates rise amid the first signs of economic recovery, investors are fleeing riskier to cyclical growth stocks, particularly banking and industrials that have underperformed, Cramer said.
The tech-heavy Nasdaq Composite has fallen in recent weeks and is still 7% below its high about a month ago. However, the rotation from technology to value stocks won’t last forever, Cramer said.
“Either tech stocks are getting too low … or long-term interest rates are getting too high. Until that happens, the rotation will just continue,” he said. “We’re not there yet, but I’m confident we’ll be there sometime because that’s what always ends these vicious rotations.”
Cramer revealed what was circled on his calendar for the coming week. Company performance forecasts are based on FactSet estimates:
Tuesday: GameStop, Adobe
GameStop
- Publication of results for the fourth quarter: after market entry; Conference call: 5 p.m.
- Projected earnings per share: $ 1.35
- Estimated Revenue: $ 2.21 billion
“The cops hope to find out more about this from this call [Ryan] Cohen’s plan, if the company reports, and if those results are any good, I expect a lot of shopping the next day, ”Cramer said.
Adobe
- Earnings publication for the first quarter of 2021: after market start; Conference call: 5 p.m.
- Projected earnings per share: $ 2.79
- Estimated Revenue: $ 3.76 billion
“Unfortunately, the results are less important than the state of the Wall Street fashion show,” he said. “If Adobe has a great quarter and rates go up that day and the return approaches 2% for 10 years, the bottom line doesn’t matter at all.”
Wednesday: RH, GrowGeneration, General Mills
RH
- Publication of results for the fourth quarter: after market entry; Conference call: 5 p.m.
- Projected earnings per share: $ 4.73
- Estimated Revenue: $ 797 million
GrowGeneration
- Publication of results for the fourth quarter: after market entry; Conference call: Thursday, 9 a.m.
- Projected EPS: 7 cents
- Estimated Revenue: $ 61.5 million
“You rarely hear these two in the same sentence, but they represent the most exciting parts of the retail industry right now,” Cramer said of RH and GrowGeneration.
“I suspect they will both report excellent quarters,” he said. “Home furnishings are the most popular part of retail shopping right now, as we’ve seen from the incredible neighborhood Williams-Sonoma just delivered and cannabis culture … [has] was an unstoppable force as state after state advocates legalization. “
General Mills
- Q3 2021 Results to be published: before the market; Conference call: 9 a.m.
- Projected EPS: 84 cents
- Estimated Revenue: $ 4.45 billion
“I like this to take the temperature of the pantries,” said the host. “I think the reaction will be lukewarm, but then again, Smucker is pleasantly surprised and I really like Hormel. So let’s listen.”
Thursday: Darden restaurants
Darden restaurants
- Q3 2021 Results to be published: before the market; Conference call: 8:30 a.m.
- Projected EPS: 68 cents
- Estimated Revenue: $ 1.61 billion
“You know, we have 150,000 [restaurants] that have closed? It means the survivors should be in an incredible position, which is why I expect them to crush numbers, “Cramer said of Darden.” The stock has had a big run up, but I think the scarcity value of the stock and the last man’s standout thesis makes it compelling. “
Disclosure: Cramer’s charitable foundation owns shares in Facebook, Amazon, Goldman Sachs, JPM Chase Organ, and Wells Fargo.
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