Raphael Stevens

Monday – Friday, 6:00 – 7:00 PM ET

“Okta versus Deere is the best way to understand this market,” CNBC’s Jim Cramer said Tuesday.
The “Mad Money” host said those two stocks illustrate Wall Street’s ongoing sector rotation.
“At this point in the business cycle, the playbook says you have to go with more tangible companies that make real things and generate real profits,” he said.

CNBC’s Jim Cramer on Tuesday stressed to investors that Wall Street is going through a sector rotation, turning away from formerly high-flying growth stocks in anticipation of tighter monetary policy.
To illustrate his point, the “Mad Money” host pointed to recent trading in shares of identity management software firm Okta and agriculture giant Deere.

“Okta versus Deere is the best way to understand this market,” Cramer said. ‘”At this point in the business cycle, the playbook says you have to go with more tangible companies that make real things and generate real profits. … Conceptual is out, tangible is in,” he added.
A year ago, Cramer said investors were willing to pay up for Okta’s strong revenue growth even as the company remained unprofitable. However, now money managers are reacting to high inflation readings and preparing for likely interest rate hikes from the Federal Reserve, Cramer said.
Cramer said that shift helps explain why Okta shares are down 4% over the past five days, while Deere is up 6.2% in that same stretch.
“I don’t mean to pick on Okta. We all know anything can bounce. There are literally dozens upon dozens of these nosebleed valuation stocks; Okta’s just among the best of them,” Cramer said. “At the moment, though, that makes it the best house in an awful neighborhood.”
By contrast, Cramer said he expects the market to be very forgiving toward stocks such as Deere, Boeing and Honeywell. Banks, which benefit from higher interest rates, are also in favor at the moment, he said.

“It’s not as simple as tech versus non-tech. There are plenty of cheap, tangible tech stocks out there” such as IBM and Hewlett Packard Enterprise, Cramer said. “Again, though, these are easily valued businesses that have a John Deere-like feel, and that’s what you need.”
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Ford on Tuesday said it plans to nearly double annual production capacity of its upcoming electric F-150 pickup to 150,000 vehicles per year at a plant in Michigan.
The company cited strong consumer demand for the pickup as the main reason for the plans to increase output.
Ford’s production plans come ahead of the automaker beginning to take actual orders for the vehicle on Thursday.

DETROIT – Ford Motor on Tuesday said it plans to nearly double annual production capacity of its upcoming electric F-150 pickup to 150,000 vehicles per year by mid-2023, citing strong consumer demand.
The increase is a positive sign of demand for the F-150 Lightning as well as electric vehicles in general but also shows Ford significantly underestimated demand for the truck, causing it to now scramble to boost manufacturing of it. This is the second time Ford has said it plans to double production of the vehicle, which is due out in the spring. Initial output was set for about 40,000 units.

“The reception of this vehicle has been absolutely incredible,” Kumar Galhotra, Ford president of the Americas & international markets, said Tuesday on CNBC’s “Squawk Box.”
Ford’s stock reached a new 52-week high day of $24.56 a share Tuesday before closing at $24.31, up by 11.7%. It was the stock’s highest daily percentage increase since June 2020, according to FactSet.
BofA Securities analyst John Murphy increased the price target for Ford Tuesday to $26 a share, up from $22, citing the automaker’s production increase. In a note to investors, he called it “an encouraging proof point” in the company’s previously announced Ford+ turnaround strategy.

Ford’s production plans come before the automaker starts taking orders for the vehicle on Thursday. The company received about 200,000 nonbinding reservations for the truck before it stopped taking the preorders last month.
At that time, Ford CEO Jim Farley told CNBC that the company was doing “whatever it takes” to double production capacity for the F-150 Lightning.

“We had to stop reservations, we got so many,” Farley told CNBC’s Jim Cramer. “We stopped at 200,000, and those are orders. Hard orders.”
Ford said it will be implementing a “wave-by-wave reservation process,” with reservation holders being asked to watch for an invitation via email from Ford or to log into their Ford.com account over the next few months to place an order for their vehicle.

Read more about electric vehicles from CNBC Pro

This week is the final pre-build phase before transitioning into mass production of F-150 Lightning trucks for retail customers and F-150 Lightning Pro for commercial customers, the company said.
Ford’s production plans come a day before General Motors is scheduled to reveal an electric version of its Chevrolet Silverado. The pickup is expected to compete more directly with the F-150 Lightning than its GMC Hummer EV, which recently started shipping to consumers. The Silverado isn’t expected to go on sale until 2023.
Pricing for the F-150 Lightning, much like the traditional pickup, has a wide range. A work-oriented version of the truck will start at $39,974. More consumer-centric models will start at $52,974 and top out at around $90,000.
– CNBC’s Michael Bloom contributed to this report.

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Monday – Friday, 6:00 – 7:00 PM ET

CNBC’s Jim Cramer on Tuesday examined the worst-performing stocks in the Nasdaq 100 in 2021.
“There are a lot of names that should keep losing now that the Fed is your foe, but also some opportunities if you’re willing to be patient,” the “Mad Money” host said.

CNBC’s Jim Cramer on Tuesday examined the worst-performing stocks in the Nasdaq 100 in 2021, reaching a mixed conclusion on their possible trading trajectories this year.
“There are a lot of names that should keep losing now that the Fed is your foe, but also some opportunities if you’re willing to be patient,” the “Mad Money” host said.

Peloton

Cramer said so much went wrong for Peloton in 2021 that he’s surprised the stock didn’t fall even further than its 76% decline last year. “Now, tax loss selling here is horrific … so a bounce cannot be ruled out. But, in the end, exercise equipment has never been a great business, and it will be difficult for Peloton to compete as people start feeling safe enough to return to the gym,” Cramer said.

A trio of Chinese stocks

A security personnel stands guard at the opening session of Baidu’s annual AI developers conference Baidu Create 2019 in Beijing, China, July 3, 2019.
Jason Lee | Reuters

Pinduoduo, Baidu and JD.com were the second-, sixth- and eighth-worst performers in the Nasdaq 100 last year, respectively, Cramer said. He recommended investors stay away from this trio of stocks, as well as other Chinese firms, because of Beijing’s increasingly tough regulatory posture.

Zoom Video

Cramer said he thinks investors shouldn’t completely give up on Zoom, even after a tough 2021, because the company has tremendous potential to grow as a player in the enterprise software category. “However, as long as Zoom tries to go it alone, its price to earnings multiple will keep shrinking,” Cramer said. “Currently it trades at roughly 40 times earnings, and I bet it can get even cheaper.”

Splunk

Even after last year’s 32% decline, Cramer said he views Splunk’s stock as a sell until the company offers greater transparency into the departure of former CEO Doug Merritt, who stepped down in November.

DocuSign

The Docusign Inc. application for download in the Apple App Store on a smartphone arranged in Dobbs Ferry, New York, U.S., on Thursday, April 1, 2021.
Tiffany Hagler-Geard | Bloomberg | Getty Images

“Like Zoom, DocuSign needs [to do] something to show that it’s taken advantage of its newfound size and reach. So far, it has not done so,” Cramer said. “This is not a niche company, but I fear it could end up being like fintech — destined to fall back to earth — and it still might have a long way to go.”

MercadoLibre

MercadoLibre, which is seen as “the eBay of Latin America,” is doing incredibly well from a business standpoint, Cramer said. However, he said valuation concerns were a major reason why the company’s stock fell about 20% in 2021.
“The stock sells at more than 400 times last year’s earnings, and nobody wants that kind of high-flier in this new environment where the Fed is no longer your friend,” Cramer said.

PayPal

Cramer said he’s sticking with PayPal in his charitable investment trust, even though it was a rough 2021 and fintech stocks remain out of favor on Wall Street. “Be careful for now. This stock is one step forward and then one step back, as we’ve seen almost exactly in the last couple days,” he said.

T-Mobile

Cramer acknowledged the competitive and capital intensive nature of the telecommunications industry. However, he said, “on this list, I think T-Mobile gives you the best chance of a bounce now that it’s arguably the best network in the nation.”
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KFC restaurants nationwide will add Beyond Meat’s plant-based chicken to menus, starting Monday for a limited time.
Fast food companies have recently tested or added plant-based items as more customers look to trim meat consumption.
KFC and Beyond Meat say they are bullish on the product despite the launch coming amid the surge in the Covid omicron variant.

KFC restaurants nationwide will add Beyond Meat’s plant-based chicken to its menus, starting Monday for a limited time.
The launch comes after years of testing from the Yum Brands chain and Beyond Meat to create a meat substitute that mimicked the taste and texture of whole muscle chicken, like chicken breast.

The two companies first tested plant-based chicken at an Atlanta restaurant in August 2019 — and sold out their limited supply in less than five hours. KFC then tested the new item in Nashville, Charlotte, N.C., and southern California two years ago.

KFC’s new Beyond Fried Chicken

The popular fried chicken chain is counting on customers making healthier choices to fulfill typical New Year’s resolutions. “This is really about where the customer is going; they want to eat more plant-based proteins,” said Kevin Hochman, U.S. president of KFC. “It’s January, so it’s a time of New Year’s resolutions and wanting to do something different in your diet.”
More Americans are embracing a so-called flexitarian diet in which consumers cut down on their meat consumption for health and environmental reasons. That has driven the growing popularity of plant-based substitutes.
“From a supply perspective, we feel really good about it, and it’s something we have experience with in initial trials,” said Beyond Meat CEO Ethan Brown.
Hochman and Brown are so bullish on the product that they’re not deterred by the current nationwide surge in the Covid omicron variant.

The partnership hits at the time of national labor, with many eateries running short staffed. To run smoothly even with fewer workers, some chains have been reluctant to add new items or even scaled back their menus. Surges in new Covid-19 cases exacerbate those issues as workers call in sick due to positive tests or exposure to infection.
Nearly a year ago, Beyond Meat announced a formal partnership with Yum to make exclusive plant-based substitutes for Pizza Hut, Taco Bell and KFC. Chipotle Mexican Grill rolled out plant-based chorizo Monday at its restaurants nationwide. It also is targeting customers who are trying to eat less meat in 2022.

Ramping up for launches

In preparing for launches to come in the new year, Beyond Meat poached industry veterans from Tyson Foods for its C-suite in December, adding Doug Ramsey as chief operating officer and Bernie Adcock in a new role of chief supply chain officer.
Ramsey spent three decades at Tyson, overseeing its poultry and McDonald’s businesses. Adcock also spent 30 years at Tyson with a focus on operations and supply chain management.
“We’re continuing to grow the operations team; they did a lot of work to help the team get ready in these final days,” Brown said, adding the Yum tie-up has been years in the making. “They’ve helped us prepare for this and we brought in, I think, some of the top executives in the industry.”
Beyond Meat is looking to get its stock back on track. In the last 12 months, shares have lost half their value, dragging the company’s market value down to $3.9 billion. The stock closed Tuesday down 5% at $61.62 and short sellers betting against the stock represent 37.2% of available shares, according to Factset.
On the other hand, shares of Yum have climbed 30% in the last year, bringing its market value to $40.3 billion. Strong demand for KFC’s fried chicken has helped lift the price. The chain’s U.S. same-store sales jumped 13% on a two-year basis during its third quarter.

Synergies with retail

The partnership does provide an opportunity, however, for “Beyond” restaurant sales. The company is hoping to attract more customers to its grocery store products, which sold briskly early in the pandemic, but then saw declines in subsequent quarters.
“It has great synergies with what we are trying to do in retail,” Brown said.
To promote the new menu item, YouTube star Liza Koshy will star in the plant-based chicken’s ad campaign, in the latest partnership between fast food chains and influencers. However, KFC will not be targeting vegans and vegetarians directly with its marketing because the Beyond Fried Chicken is made using the same equipment as KFC’s traditional fried chicken.
Customers can buy KFC’s Beyond Fried Chicken in six- or 12-piece orders, with dipping sauce included. Prices start at $6.99, excluding tax.

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Monday – Friday, 6:00 – 7:00 PM ET

CNBC’s Jim Cramer on Tuesday broke down some of the best-performing stocks in the Nasdaq 100 in 2021.
“Many of these Nasdaq winners have fallen out of favor and become incredibly dangerous,” the “Mad Money” host said.
However, he said he believes some stocks on the list can still see further upside in 2022.

CNBC’s Jim Cramer on Tuesday broke down some of the best-performing stocks in the Nasdaq 100 in 2021, offering his thoughts on how investors should approach them in the new year.
“Many of these Nasdaq winners have fallen out of favor and become incredibly dangerous, but the more tangible ones … can work here,” the “Mad Money”‘ host said.

Lucid Group

Lucid Group shares rose 280% in 2021, and Cramer said he knows many investors are justifiably looking for “the next Tesla.” However, he cautioned that Lucid is still in the early stages of scaling up production.
“As much as I love the story, I hate the timing, especially with another lockup expiration … coming later this month,” he said. “The last one crushed the stock.”

Marvell Technology

Cramer jumped to the fifth-best performer, Marvell Technology, because he discussed numbers 2-4 — Moderna, Fortinet and Nvidia, respectively — on Monday’s episode of “Mad Money” as part of a segment on the top S&P 500 stocks.
For Marvell, Cramer noted he’s long been a fan of the semiconductor company, which has undergone a reinvention under the leadership of President and CEO Matt Murphy. “I think it can keep working in 2022 because this is a real company with real products and real profits. Notice, it was barely off today even as the rest of tech melted down,” Cramer said.

Applied Materials

Technicians work on machinery at the Applied Materials facility in Santa Clara, California.
David Paul Morris | Bloomberg | Getty Images

Cramer said he believes investors should look to own Applied Materials, shares of which rose 82% in 2021, or one of its fellow semiconductor equipment makers such as KLA Corp. and ASML. KLA was the ninth-best performer in the Nasdaq 100, while ASML was No. 11.

Cramer cited the long-term demand trends, as semiconductors become integral to a growing number of products from cell phones to automobiles. “Think of them as the limited arms dealers in the semiconductor cold war. I’d buy them on any dip, however shallow,” he said.

Datadog

Cramer said even though Datadog is considered a best-of-breed company in the world of cloud-based data analytics and monitoring, he believes investors are better suited in a different part of the stock market right now.
“This thing lost 8% of its value yesterday for no particular reason and then tumbled another 3.7% today. … It’s not the kind of stock you can afford to own when rates are on the rise,” Cramer said.

Intuit

Cramer said he believes Intuit —which has TurboTax, QuickBooks and Credit Karma in its product suite — has the best chance of any company on the list to repeat its “terrific” 2021 performance this year. Cramer touted Intuit’s aggressive acquisition strategy in recent years and said it’s become an indispensable company for small and medium-sized businesses. It rose nearly 70% in 2021.

Alphabet

Sundar Pichai, chief executive officer at Google LLC, speaks during the Google Cloud Next ’19 event in San Francisco, California, U.S., on Tuesday, April 9, 2019. The conference brings together industry experts to discuss the future of cloud computing.
Michael Short | Bloomberg | Getty Images

Google-parent Alphabet saw its stock jump 65% last year. While some may say it’s just catching up to its mega-cap tech peers, Cramer said the stock’s story is more complicated than that. The company benefited from the rebound in advertising spending from industries such as travel, Cramer said, adding that investors are also expecting big things from the Google Cloud division.

Atlassian

Cramer said he’s a fan of Atlassian, which makes tools for software developers, as a company.
“I like the product, seems indispensable to many,” Cramer said. “But this is one that’s just totally out of style, so if you want to stick with it, you need to get used to pain.”

Zscaler

Similarly to Atlassian, Cramer said he likes Zscaler as a company but believes the cybersecurity stock, which rose 61% in 2021, is tough to own at this current moment.

AMD

Chipmaker AMD rose 57% last year, and Cramer said he thinks the stock has become one that investors should own, not trade.
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Disclosure: Cramer’s charitable trust owns shares of Nvidia, Marvell Technology, AMD and Alphabet.

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Toyota outsold GM in 2021, marking the first time since 1931 that the Detroit automaker wasn’t the best-selling car company in the U.S.
The historic change occurred as Toyota was able to manage supply chain issues better than GM, including an ongoing shortage of semiconductor chips.

Toyota vehicles are offered for sale at a dealership on November 04, 2021 in Chicago, Illinois.
Scott Olson | Getty Images

DETROIT – Toyota Motor has dethroned General Motors as America’s top-selling automaker in 2021, marking the first time since 1931 that the Detroit automaker wasn’t the best-selling car company in the U.S.
It also marks the first time a non-domestic automaker has taken the top spot in America.

Toyota was able to manage supply chain issues better, allowing it to take away GM’s throne for the first time in 90 years. An ongoing shortage of semiconductor chips caused sporadic shutdowns of plants and led to record-low vehicle inventories in 2021.  

GM said Tuesday it sold 2.2 million vehicles in the U.S. in 2021, down by 12.9% compared to the year earlier. Toyota, by comparison, said it sold 2.3 million vehicles in the U.S. last year, up by 10.4% compared to 2020. The difference in sales between the two automakers was 114,034 vehicles.
Jack Hollis, Toyota North America’s senior vice president of automotive operations, downplayed the company’s No. 1 ranking.
“Yes, we did surpass General Motors in sales,” he told reporters during a call Tuesday. “But to be clear, that is not our goal, nor do we see it as sustainable.”
GM has been the largest seller of vehicles in the U.S. since 1931, when it surpassed Ford Motor, according to data from industry publication Automotive News.

GM’s stock achieved a new 52-week high Tuesday of $65.98 a share before closing at $65.74 a share, up by 7.5%. The jump followed the automaker saying the chip shortage was easing and it increased production at the end of the year.
GM said its fourth-quarter production and wholesale deliveries were up significantly from the third quarter as supplies increased. Dealer inventory, including in-transit vehicles on their way to dealers, was 199,662 at the end of the fourth quarter, up from 128,757 cars and trucks at the end of the third quarter.
Toyota was able to achieve the milestone by increasing sales of both cars and trucks last year, despite a 25% decline in sales of its full-size Tundra pickup. Sales of its smaller Tacoma pickup increased by 5.7% to 252,520 units.
It was a rough sales year for GM due to the semiconductor chip shortage. Sales of its highly important Chevrolet Silverado pickup – its best-selling vehicle – were down by 10.8% to less than 530,000 units.

Aside from Ford, which sold 1.7 million vehicles through November, most major automakers are scheduled to report their fourth-quarter and 2021 total domestic sales on Tuesday. New light-duty vehicle sales are expected to be about 15 million in 2021.
Industry analysts and forecasters are mixed on their sales forecasts for 2022 due to the volatility in the market. They range from about 15.2 million vehicles to around 16 million vehicles or better.
GM North America President Steve Carlisle said the automaker plans to increase its sales and marker share next year, potentially regaining its sales title.
“In 2022, we plan to take advantage of the strong economy and anticipated improved semiconductor supplies to grow our sales and share,” he said in a release Tuesday.

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Airlines have blamed cancellations on a combination of bad winter weather and omicron infections among crews.
Carriers have canceled more than 20,000 U.S. flights since Christmas Eve.
Investors have shrugged off the disruptions, though, forecasting a rise in travel demand this year.

Travelers wait in line to check-in for flights at Newark Liberty International Airport (EWR) in Newark, New Jersey, U.S., on Monday, Jan. 3, 2022.
Christopher Occhicone | Bloomberg | Getty Images

Airlines canceled hundreds of additional U.S. flights on Tuesday in the wake of winter storms and as the fast-spreading Covid omicron variant hamstrings crews.
As of 2 p.m. in New York, more than 1,400 flights around the country were canceled, according to airline data provider FlightAware. More than 2,300 were delayed. Since Christmas Eve, airlines have scrubbed more than 20,000 flights, disrupting holiday plans for tens of thousands of customers during what were expected to be the busiest travel days since the start of the pandemic.

Monday’s cancellations totaled 3,225 as a winter storm hit the mid-Atlantic after causing a weekend of disruptions in the Midwest. It was the largest daily total since Feb. 15 of last year, when 3,899 flights were canceled, according to FlightAware.
On Tuesday, Southwest Airlines canceled 395 out of its more than 3,600 scheduled flights. The Dallas-based airline faced bad weather that forced it to scale back operations at major airports, including Denver, Chicago and Baltimore. An airline spokeswoman said the carrier was working to get planes and flight crews back in place to resume some of its flights.
More than a fifth of the departures at Baltimore/Washington International Thurgood Marshall Airport and at Ronald Reagan Washington National Airport were grounded as of midday. The winter storm also snarled rail travel and roads throughout the eastern U.S. Drivers were trapped in an hourslong traffic jam after officials closed an icy stretch of I-95 in Virginia.
JetBlue Airways canceled 105 flights, or 10% of its Tuesday schedule. A spokesman said the majority of those cancellations were due to schedule cuts it announced last week to help ease staffing constraints as omicron infections sideline flight crews. The New York-based airline will trim close to 1,300 flights through mid-January.
JetBlue, United, Southwest and others offered crews extra pay to pick up open trips. United pilots’ union and the company agreed to triple compensation to fly extra trips through much of January.

Regional airline SkyWest was also offering extra pay to pilots who pick up trips through the month to help boost staffing that has been strained by omicron and plans to trim its January schedule.
“Given the ongoing surge in COVID cases and related sick calls, we’ve been working with each of our major partners to proactively reduce the remainder of our January schedules to ensure we’re able to adequately staff our remaining flying as we work to recover in the coming weeks,” the airline said in a statement.
SkyWest, which flies smaller planes for Delta, United, Alaska and American, canceled 94 flights or 9% of its Tuesday schedule.
Airline investors have shrugged off the disruptions, though. Analysts have forecast a further rebound in travel demand this year, particularly in trans-Atlantic trips that many customers skipped during the pandemic because of a host of travel restrictions aimed at curbing the spread of the virus.
Carriers have struggled to ramp up their networks to match travel demand, facing labor shortfalls and higher costs.
“We believe 2022 will be another year of lumpy results as airlines continue to struggle to add capacity to their networks as demand is likely to remain strong,” Cowen airline analyst Helane Becker wrote in a Tuesday note. “We expect inflationary pressure in fuel and labor cost, as well as high interest costs, to lead to higher ticket prices.”
Stocks of major U.S. airlines traded higher Tuesday for a second straight day. Southwest, American and United each rose more than 1%, while the S&P 500 fell less than 0.1%.

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