Cramer’s week ahead: Markets need a strong job market, tame inflation to stay up

CNBC’s Jim Cramer on Friday told investors that stocks could see another strong week of trading, given the right economic conditions.

“As the year winds down, the holidays will become more and more of a focus. Right now, the forecast is cloudy – too many cross currents. But if the job market stays strong and inflation stays tame, we could be in for still one more very good week,” he said.

Stocks closed up for the week on Friday, marking the first time since October the three major indexes saw consecutive weekly gains. 

Markets were volatile this week as investors digested Federal Reserve Chair Jerome Powell’s indication that the central bank could start slowing down its pace of interest rate hikes soon and the hot wage and labor data.

Cramer said that he has his eye on the producer price index and University of Michigan Consumer Sentiment Index reports set to release next week, and is worried that sentiment might be too cold.

“Right about now, we need a boost, a big boost, if only to save Christmas for retail,” he said.

He also previewed next week’s slate of earnings. All earnings and revenue estimates are courtesy of FactSet.

Tuesday: AutoZone, Toll Brothers, SentinelOne 

AutoZone

• Q1 2023 earnings release at 6:55 a.m. ET; conference call at 10 a.m. ET
• Projected EPS: $25.3
• Projected revenue; $3.86 billion

He said the stock’s been a favorite of his for years.

Toll Brothers

• Q4 2022 earnings release at 4:30 p.m. ET; conference call on Wednesday at 8:30 a.m. ET
• Projected EPS: $4.01
• Projected revenue: $3.17 billion

While it’s generally advised not to buy housing stocks going into a tightening cycle that could set off a recession, Powell’s recent remarks could make the stock an interesting investment, Cramer said.

SentinelOne

• Q3 2023 earnings release after the close; conference call at 5 p.m. ET
• Projected loss: loss of 11 cents per share
• Projected revenue: $180 million

He said he’s unsure when the stock will bottom.

Wednesday: Campbell Soup, Ollie’s Bargain Outlet Holdings, Brown-Forman, Lowe’s

Campbell Soup

• Q1 2023 earnings release at 7:30 a.m. ET; conference call at 8 a.m. ET
• Projected EPS: 88 cents
• Projected revenue: $2.45 billion

He said that the company has been “reinvented” by CEO Mark Clouse.

Ollie’s Bargain Outlet Holdings

• Q3 2022 earnings release before the bell; conference call at 8:30 a.m. ET
• Projected EPS: 40 cents
• Projected revenue: $429 million

The company is a “terrific” bargain store, meaning its quarter should have standout results, Cramer said.

Brown-Forman

• Q2 2023 earnings release at 8 a.m. ET; conference call at 10 a.m. ET
• Projected EPS: 55 cents
• Projected revenue: $1.08 billion

Cramer pointed out that liquor sales tend to do well in a recession, which is good news for the Jack Daniel’s distiller.

Thursday: Broadcom: Costco, Lululemon Athletica

Broadcom

• Q4 2022 earnings release at 4:15 p.m. ET; conference call at 5 p.m. ET
• Projected EPS: $10.3
• Projected revenue: $8.90 billion

The semiconductor company will report great earnings even though cloud growth is slowing, Cramer predicted.

Costco

• Q1 2023 earnings release at 4:15 p.m. ET; conference call at 5 p.m. ET
• Projected EPS: $3.12
• Projected revenue; $58.36 billion

While the retailer’s quarter will likely be solid, the better bargain stock is TJX, he said.

Lululemon Athletica

• Q3 2022 earnings release at 4:05 p.m. ET; conference call at 4:30 p.m. ET
• Projected EPS: $1.96
• Projected revenue: $1.81 billion

Cramer said he’s betting Lululemon will beat Wall Street expectations in its latest quarter.

Disclaimer: Cramer’s Charitable Trust owns shares of Costco and TJX.