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Jim Cramer (0:33)
My mission is simple to make you money. I'm here to level the playing field for all investors. There's always a mo market somewhere and I promise to help you find it. Mad Money starts now. Hey, I'm Kramer. Welcome to Mad Money. Welcome to Cramerica. Other than my friends, I'm just trying to save you a little money here. My job is not just to explain, but to put in some sort of context. You can understand it. So call me at 1-800-743-CNBC we meet Jim Cramer. When I first heard the idea that stocks could actually go down in response to great job growth, I thought it was absurd. Who hopes for weak job growth? Who hopes for higher unemployment? The answer People own stocks, that's who. At least when they're worried about interest rates. And that's how you get a day like today with a labor report showed we created way more jobs than expected in December. And then for the market, roll over. Dow tumbling 697 points. S&P plunging 1.5%. Nasdaq plummeting 1.63%. Now there are two sides to the story. Given that I was worried about a hard landing and recession just six months ago, I saw strong job growth. You know what? I was grateful. But we're in a moment where my gratitude means nothing. The majority of investors were looking for slower job growth, lower long term interest rates and some rate cuts from the Fed. For them, the disappointment was palpable. So the stocks, they sold them hand over fist as you can see. Now this is an unusual Always remember that the bond market is a lot bigger than the stock market and the bond market gods are more powerful. So when rates go up, stocks tend to go down. And that's what happened today. The stock market won't improve until interest rates go down. We might get some better stocks, but not a better stock market, which is why so many investors are rooting for a weaker economy. Makes the Fed look better, makes you feel better that rates aren't going to be such big competition to stocks, which they're getting to be. So what happens now? Let's take a look at their game plan for next week with an eye towards seeing something positive to find that bull market somewhere. First of Monday, we hope to get some good news out of the wildfire situation. It's always disconcerting to hear that there could be anything good coming out of the fires. But like any natural disaster, our various governments and our insurance companies try to get things on a better footing. Usually that means an expanded economy in the areas that are hit, and I think you're going to start hearing about that thing pretty soon. I don't like profiteering off tragedy, but it's undeniable that retailers do better in this environment because people have to rebuild, meaning they need plumbing, kitchen supplies, washers, dryers, dishwashers, ovens, TVs, all the stuff of modern life. Sure, some of these retailers already went up, but they can go up further. So look for the possibilities, because when the insurance checks come in and the government starts spending some money, they're going to go toward rebuilding. How about the other side of the trade here? I'm talking about earnings. Can great earnings triumph over a sour bond market? We're going to find out for certain because this is a week we associate with bank earnings. And there's a lot of misconceptions about the banks. We know that when they make the wrong bets on the bond market like two years ago, their stocks can take some real nasty hits. But when their bond portfolios are good like they are today, they can withstand or even profit from higher rates. So let's not write these stocks off. Before we get to the banks, though, we need to talk about KB Homes is a homebuilder with a significant presence in California. When so many houses get burned down, you think that it might be good for the homebuilders, particularly KB Home. But there is a real mismatch here. Many of these homes are very expensive. That's not KB's niche. It makes the kind of homes where higher mortgage rates really hurt sales. Plus the possibility of a draconian immigration policy for the Trump administration will hurt the homebuilders in two ways. For first, they're going to have to pay higher wages, and then there are fewer customers. So even though KB Homes have put up some consistently good numbers all during this big, great period for housing, I fear that this stock could end up on the canvas. I hope to dispel the gloom a bit when I take a trip out west to the fabled J.P. morgan Health Care conference. This is where we hear from almost every drug and health care company and I'm going to do my best to bring you a highlight reel of the most important presenters. Get ready to be dazzled with some really terrific stories regardless of the economy. But remember, the drug stocks are indeed still hostage to interest rates which are a more powerful force than their pipelines or even their earnings in many cases. Tuesday we have the producer price index along with the consumer price index. On Wednesday it needs to come in cooler if there's any hope that interest rates could reverse and the Fed can regain some of its lost credibility stemming from cutting in a hurry when we now know there was no need to do so. I think it's possible that these numbers are going to be cooler than the labor report but not enough to justify repeal of today's losses. Wednesday. Well here it comes. Host of bank earnings and they'll get an initial boost from higher rates in the form of offering you rate based products like CDs that offer much lower rates than the banks can earn by sticking your money in the bond market. It's a short term windfall but it could make these stocks worth owning. On Wednesday we're going to hear from J.P. morgan, Goldman Sachs, Wells Fargo and Citigroup. I think they're all going to be pretty darn good. Plus given the environment has improved for mergers and acquisitions as we've seen already this year, we can have some excellent forecasts. I like these stocks and they're well off their highs with very low price turnings multiples. Could it be a real opportunity? I think so. We've been buying a bunch of them for the charitable trust because a robust economy often produces the best results for these companies regardless of the bond market or the Fed. We have less fewer credit problems. Thursday we have more of the same this time. Bank of America, US Bancorp, Morgan Stanley and PNC Financial. I actually expect all these to be good too. But the best one, the most admirable, likely pnc. You know PNC has become kind of a colt bank stock. The biggest health insurer UnitedHealth Group reports too. Now we know this company has been in the news sadly after one of its highest level executives was murdered. This group's had strong earnings of late, including really, I mean terrific. They just got some good news from from Medicare to this very evening. So they're no longer dealing with a post Covid hangover. They're getting better return from the government. And you know what I suspect UNH is going to have an excellent quarter. So what can I say? These stocks probably going to work at the close. We get results from one of my favorite companies. JP Hunt is the giant trucker. I see this company is more of a barometer business because it does such a tremendous job of breaking down the strong and weak parts of the economy line by line by line. These days, the transports everyone wants though are the airlines. Just look at the positive reaction to Delta's numbers this morning. I think we need to keep in mind that when you get really strong earnings like the ones from Delta, they can indeed transcend the market's negative gravitational bull. Stock look good that I finished up 9%. Finally on Friday, I'm watching out for SLB. That's the old slumber. They don't call it that anymore. As we've seen a few weeks of rising oil prices. I know that's not enough to turn around SLB's fortunes. It's been down the dumps for, for a year and four months. A few weeks of good oil news won't change that. But I think that the company might give us a more positive forecast given that there's certainly more drilling optimism around even as, as a very international company. Bottom line, if you're a bull or at least trying to make sense of this market, well, you know, a market that goes down on seemingly good news. All I can say is that the stock market gets surprised, may seem like it's reacting inappropriately until you see its master, the bond market, explain everything by the direction of interest rates. For now, that's the key determinant of the entire stock market, even as there are pockets of positivity that can escape the bond market's tyranny. Mark in Iowa. Mark.