CNBC’s Jim Cramer on Friday said the start of earnings season next week will give investors a clearer picture of corporate performance and the strength of the artificial intelligence trade.
“No more guesswork,” the “Mad Money” host said. “We’re about to go into the wide world of earnings season, so we don’t need to hang on every little data point to figure out where to put money into the market.”
Stocks rose on Friday, led by the tech sector, as traders rebounded from a volatile week marked by elevated Treasury yields and oil prices, and declines in AI stocks. With that backdrop, Cramer turned to the week ahead, when major banks kick off earnings season alongside key semiconductor reports and inflation data.
Tuesday brings earnings from Goldman Sachs, Wells Fargo, JPMorgan Chase and Citigroup. Cramer said recent weakness in bank stocks could set the stage for a rally if results exceed expectations.
He remains bullish on Charitable Trust holdings Goldman Sachs and Wells Fargo. Goldman’s strength in bond issuance and trading could offset slower deal-making, while Wells Fargo’s attractive valuation and potential for improving metrics make it particularly appealing.
Cramer was more cautious on JPMorgan, which he said is priced for near-perfect execution, and wants to see whether Citigroup can rebound.
Club holding Johnson & Johnson also reports Tuesday. Cramer said the stock often sells off during its earnings call despite strong underlying results, creating a potential buying opportunity. “With 18 potential blockbuster drugs in the pipeline and among the best cardio and oncology franchises, J&J needs to be bought when it gets crushed,” he said.
The consumer price index is released Wednesday morning, with Cramer looking for signs that inflation is easing outside of energy.
Semiconductor equipment maker ASML also reports. “If ASML raises guidance and talks about solid demand, then you need to be ready to do some buying, picking up some Lam Research or Applied Materials, my two favorite semiconductor capital equipment stocks.”
Bank of America, Morgan Stanley and BlackRock round out Wednesday’s financial earnings. Cramer especially likes Morgan Stanley’s growing wealth management business, which provides an important growth driver beyond investment banking.
Thursday could be the biggest day for semiconductor stocks, with chipmaker Taiwan Semiconductor Manufacturing reporting earnings. “If it’s strong, then we could have a rally of immense proportions,” Cramer said.
The producer price index and retail sales figures, also Thursday, will offer fresh clues on inflation and consumer spending.
Brokerage firm Charles Schwab reports and holds an analyst meeting Thursday. Cramer said the events could shed light on the growing influence of individual investors in the market.
Despite the busy earnings calendar, Cramer warned that rising bond yields remain a major risk.
“We have earnings, we have to worry about oil, and we have to start accepting that we’ll have a plus 6% long bond because of demand for money, from both the Treasury department and private enterprise, chiefly data center investments,” Cramer said. “When it comes to bonds, there’s too much supply and not enough demand for the moment. It’s coloring everything and we need to respect how challenging the market can be when interest rates head inexorably higher.”