CNBC’s Jim Cramer on Monday said it’s “counterproductive” for stocks to rally into an earnings report. He pointed to Alphabet, among other stocks, to illustrate his case.

“A gentle dip ahead of earnings can be the best vaccination against a sell-off,” the “Mad Money” host said. When stocks, like Google’s parent, come in too hot, “that’s like a jet landing on an aircraft carrier that can often miss the decks and end up getting obliterated, as 3M did last week and Alphabet has done this very night. “

After reaching a new high of $1,296.97 in the session, shares of Alphabet plummeted nearly 8% in after-hours trading. The tech giant reported a first quarter earnings beat of $11.90 per share, compared with the expected $10.61. But, reported revenue of $36.34 billion fell below analysts’ projections of $37.33 billion.

Ahead of Monday’s close, the stock had run up nearly 10% in April. Cramer called it a “horrendous set up.”

“[It’s] another classic worst-case scenario, although the pattern of Alphabet’s stock is to get pummeled on earnings and then spend the next three months rallying until it gets pummeled on earnings again,” he said. “It’s the Sisyphus of modern growth stocks.”

Cramer said there was similar action in Intel’s run up ahead of its earnings call last Thursday, when the company revealed weaker-than-expected revenue expectations. The company’s data center and personal computer businesses did not perform well and the share price sank 9% in a day, he said.

“I don’t see Intel mounting a comeback any time soon, especially if their chief rival, AMD, tells a good story when it reports this week, ” Cramer said.

Nearly a third of all S&P 500 companies are set to report earnings this week. If a stock surges into the quarter and the earnings results turn out to be bad, investors could be set up for a tough decline, Cramer warned.

The major indexes on Monday all advanced. The Dow Jones Industrial Average added more than 11 points, the S&P 500 gained gained 0.11%, and the Nasdaq Composite moved 0.19%. The latter two averages both recorded new 52-week highs.

Disclosure: Cramer’s charitable trust owns shares of Alphabet.

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CNBC’s Jim Cramer on Monday took another look at the best stocks to play the years-long global rollout of the next generation of wireless technology.

In February, he declared that Skyworks Solutions, Intel, Qualcomm, Broadcom, and Xilinx were the top five semiconductor companies that stand to benefit from the building of 5G infrastructure. Nearly three months later, he reevaluated their movements and offered an updated outlook for each stock.

“If you want to play the 5G rollout, or any other huge secular trend, you need to keep doing the homework,” the “Mad Money” host said. “You gotta keep finding the right stocks, which is exactly why I’m trying to keep you up to date on this story.”


Since giving an “optimistic” forecast on Qualcomm in early February, Cramer noted that the share price has surged 69% with the help of its recent settlement with Apple. The deal paved the way for Qualcomm, which stands poised to lead the 5G rollout, to supply chips to the iPhone maker for the next six years, he said.

Cramer said the stock is still cheap, selling for 15-times next year’s earnings estimates.

“I like that. I think it’s a hold, though,” he said. “We gotta see what they have to say when the company reports on Wednesday.”

Skyworks Solutions

Cramer recommended Skyworks Solutions because it has major 5G exposure. Though the stock has been trading relatively flat since early February, he expects demand for its radio frequency chips for connected devices will pick up as phones adapt to 5G.

“I think it’s a phenomenal long-term story, and it doesn’t hurt that the stock sells for just 12-times earnings estimates,” he said. “Skyworks reports on Thursday night. I expect them to tell a good story, but if the company stumbles and the stock gets hit, [buy it].”


Intel’s share price is up more than 2% since the stock was recommended in early February, but there was a lot to dislike in its latest earnings call, Cramer said.

Furthermore, the company is dropping out of the 5G business.

“I think the competition is eating them alive. The stock isn’t even that cheap,” he said. “Hard pass.”


Though it’s not a pure play on 5G, Broadcom has some exposure to the industry and the company is in pretty good shape in the wake of its most recent earnings report in March, Cramer said.

The stock has rallied more than 13% in less than three months.

“You don’t buy Broadcom for its 5G exposure, which doesn’t really start to move the needle until next year or later,” the host said. “You buy it for [CEO] Hock Tan’s track record and the amazing margin expansion we’re now seeing, thanks to his acquisition of CA [Technologies]. “


In the last three months, shares of Xilinx have rallied less than 2.5%. Cramer said the programmable logic device maker is a high-risk, high-reward stock that has been on a rollercoaster ride.

The stock peaked north of $141 per share last Wednesday and has since fallen to its $117.08 close Monday. Cramer said it was because Wall Street turned sour on its plans to buy Solarflare, which makes cloud data center software.

“It’s attractive here, but if you’re going to own a wild-trader like Xilinx, you need to be prepared to sell the rips and buy the dips,” he said.

Outside the semiconductor space, Cramer also gave his opinion on two telecommunication equipment companies: Nokia and Ericsson.

He previously favored Nokia of the two. But since early February, shares of Nokia have slumped 12%, in part due to a mixed earnings report and privacy issues, he said.

Ericsson, on the other hand, has rallied more than 13% in the same time frame. The telecommunications software maker is executing better, Cramer said.

Nokia is trading at 13-times next year’s earnings estimates and sports a 4.2% yield, he pointed out. Ericsson, for that matter, trades at 18-times next year’s earnings estimates.

“If you want best of breed, Ericsson is the way,” he said. “And if you want a value stock that’s got a nice dividend, Nokia’s the way. I expect rising 5G tide to lift both boats.”

Disclosure: Cramer’s charitable trust owns shares of Apple.

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3M has adopted a more aggressive playbook to mitigate the challenges it faced during the first three months of 2019, CEO Michael Roman told CNBC on Monday.

“We were behind the curve in what we were doing to take costs down in Q1,” he said in a one-on-one interview with “Mad Money’s” Jim Cramer. “The actions we’re taking now get us ahead of that curve. That’s what we’re executing: Get ahead of the curve.”

Roman blamed challenges in China as well as in the automotive and electronics sectors for the manufacturing giant’s weak first quarter earnings. About 30% of the company’s revenue comes from those three segments and management is “disappointed” by the top and bottom line misses, he said.

Organic sales declined 1.1% year-over-year in the quarter.

The stock is down about 13% off where it closed on Wednesday before the company’s earnings call Thursday morning. Cramer noted its the worst plunge the equity has taken in more than three decades.

3M took action to get ahead of the headwinds in China, autos and electronics, but it was not enough to offset the declines, Roman said. He said the declines accelerated through the months of February and March.

The company’s guidance for 2019 earnings was also cut to a range of $9.25 to $9.75, from a range that topped out at $10.90.

“Our execution led to weak productivity, as the way we termed it, and so we are taking action,” Roman said.

The three markets are short-term challenges, but they are still a big part of 3M’s long-term strategy, he said. Management plans to execute better to protect its market share, while driving value across the broader portfolio, he added.

The 3M model is still “strong,” and the company will prioritize innovation and their best growth points, Roman said. The defensive action that leadership is taking to get around the headwinds include addressing operational costs and realigning manufacturing around demand in those markets, he said.

“Our team knows how to respond … We’ll get ahead of this as we go through the quarter and into the rest of the year,” Roman said. “Some of the restructuring will take longer to play out. That’ll take time and that’ll be more toward the end of this year.”

Shares of 3M traded less than 1% down Monday, settling at $190.21 by the end of trading.

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Let’s block ads! (Why?) Inc. expects to improve the delivery times for customers who sign up for its Prime subscription program, cutting free deliveries to one day instead of two, an executive said Thursday afternoon.

In a conference call related to Amazon’s

AMZN, +2.54%

 quarterly earnings report, Chief Financial Officer Brian Olsavsky explained that the company expects profit to take a hit in the second quarter as Amazon ramps up the change to its Prime program.

“We’re currently working on evolving our Prime free two-day shipping program to be a free one-day shipping program,” Olsavsky said, adding that Amazon expects to spend $800 million this quarter to make the change.

Amazon offers one-day delivery on some products now, and even same-day delivery for some purchases. But Olsavsky suggested that the company now expects that the standard free two-day shipping that is the biggest selling point for the Prime subscription plan will be improved to a one-day schedule globally.

See also: Does Amazon Prime’s 2-hour free food shipping make it a better deal than Costco?

“We have been offering obviously faster-than-two-day shipping for Prime members for years — one day, same day, even down to two-hour delivery for Prime Now — so we’re going to continue to offer same day and Prime Now morphing into, or evolving into, a free one-day offer,” he said in response to an analyst question.

Olsavsky said that one-day shipping expanded to more products in the first quarter, and that certain zip codes were receiving broader access to free one-day shipping. He did not say when the one-day shipping program would be available to all customers.

“It’s a significant step it and it will take us time to achieve, and we want to ensure we have good delivery experience for our customers as we evolve this offer,” he said.

“We expect to make steady progress quickly and through the year,” Olsavsky later added in response to a follow-up question from a different analyst. “We’ll have more for you at the end of Q2 obviously.”

Don’t miss: Is Amazon Prime worth its $119 price tag?

In the first-quarter earnings call last year, Amazon announced that it would increase the Prime membership price to $119 a year, a 20% hike. It was the first time Amazon had increased the price in four years. That increase followed the announcement that Prime had attracted more than 100 million members, a number that Amazon has not updated since.

“We are very happy with not only the absolute membership levels of the Prime program but also the engagement,” Olsavsky said when asked about changes in Prime membership levels Thursday.

Amazon shares gained about 1% immediately after Amazon reported record profit for a fourth consecutive quarter Thursday afternoon, but fell to a slight decline throughout the after-hours session as the company’s prediction of smaller profit in the second quarter was digested. After Olsavsky explained that the Prime change was the key reason for guiding to smaller operating profit, shares returned to gains of about 1%. The stock was up 0.9% premarket Friday.

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The U.S. Department of Justice asked a federal court last week to put a hold on the Securities and Exchange Commission’s case against former Theranos Chief Operating Officer Sunny Balwani, arguing that a stay in the case would prioritize their criminal case against him.

The Justice Department told the judge that Balwani should be prevented from using his pending SEC case to benefit his criminal case. His lawyers’ discovery demands in the SEC case have included requests that are only relevant to the criminal indictment’s allegations that he defrauded doctors and patients.

For example, Balwani subpoenaed parties that appear nowhere in the SEC’s complaint against Balwani or his response to the charges including competitor laboratories who also had contracts with Theranos partners Walgreens

WBA, +0.32%

and Safeway.

The subpoenaed parties are instead associated with doctors and patients interviewed by federal investigators and prosecutors in the criminal investigation, the DOJ says.

The SEC’s civil charges and the DOJ‘s criminal charges overlap but are quite different.

The SEC alleges Theranos founder Elizabeth Holmes and Balwani “deceived investors by, among other things, making false and misleading statements to the media, hosting misleading technology demonstrations, and overstating the extent of Theranos’ relationships with commercial partners and government entities, to whom they had also made misrepresentations.”

Read: The last days of Theranos — the financials were as overhyped as the blood tests

More details: The investors duped by the Theranos fraud never asked for one important thing

The SEC also alleged Balwani, Holmes and Theranos lied to investors about many aspects of Theranos’ business, including the capabilities of its proprietary analyzers, its commercial relationships, its relationship with the Department of Defense, its regulatory status with the U.S. Food and Drug Administration, and its financial condition.

The criminal indictment against Holmes and Balwani alleges six counts of wire fraud related to the financial scheme to defraud investors, too, but also alleges that the two defrauded doctors and patients.

The SEC’s complaint doesn’t make any allegations about criminally defrauding doctors or patients.

See also: Theranos closes deal with Fortress to shut down embattled firm

Holmes, who settled the SEC charges in March 2018, now argues via her attorneys that the SEC is part of the government’s prosecution and, therefore, that the government must give Holmes any documents obtained by the SEC in the course of Balwani’s civil discovery for her defense against the criminal charges.

The SEC supports the request for a hold in its case against Balwani, according to the DOJ’s motion.

The DOJ says Balwani may object to the stay on two grounds: that he will be unable to clear his name if the civil case is deferred and that he is unable to take discovery he would otherwise be entitled to.

The DOJ says both objections are moot, since Balwani has acted with the assumption that the criminal case would be resolved first and Balwani will be entitled to take whatever remaining discovery is permitted under the civil rules after the criminal case is resolved.

Read on: Theranos founder Elizabeth Holmes may have used a fake voice, and MarketWatch spoke with professional voice coaches about why

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Spanish stocks fell Monday after no political party emerged with a majority in Sunday elections, while weak oil prices weighed on shares across the rest of the European continent.

How did markets perform?

The Spain IBEX 35

IBEX, -0.86%

led losses for regional indexes, falling 0.9%. On Friday, it had closed up 0.1%.

The Stoxx Europe 300

SXXP, -0.27%

 gave up modest gains to slip 0.3%, after a gain of 0.2% Friday. The euro

EURUSD, +0.0538%

 was changing hands at $1.1162 from $1.1149 late Friday in New York.

In the U.K., the FTSE 100

UKX, -0.08%

 was flat following Friday’s decline of nearly 0.1%. The pound

GBPUSD, +0.0387%

  rose again 0.2% to $1.2941 after climbing 0.2% Friday.

France’s CAC 40

PX1, -0.30%

fell 0.4%. At Friday’s close, it had risen 0.2%. Germany’s DAX

DAX, -0.32%

DAX, +0.52%

slipped 0.3% on the heels of its 0.3% jump Friday.

In Italy, the FTSE MIB

I945, -0.29%

 fell 0.4%, following Friday’s 0.1% increase.

What’s moving the markets?

Spain’s ruling Socialist party took the largest share of votes in elections Sunday, but that did not constitute enough to form a government without entering into a coalition. They are expected to join a group of smaller parties led by Podemos, a party firmly on the left of Spain’s political spectrum. However Reuters reported that the Podemos leader cautioned supporters that forming a coalition “will take much time and I would ask for your patience.”

In addition, the election saw the emergence of the far-right Vox party, which captured 10% of the vote for 10 seats in parliament. It was the first significant victory for a far-right party since the country’s dictatorship ended in the 1970s.

“We expect a prolonged standstill, at least until the May regional and European elections. But we continue to think that political instability will have only a modest effect on the performance of the Spanish economy,” said analysts at Oxford Economics, in a note to clients.

Oil prices stepped lower again on Monday, extending a selloff from late last week after U.S. President Donald Trump said he had personally intervened to pressure the Organization of the Petroleum Exporting Countries to lower prices of the commodity. Those losses extended to the heavily-weighed oil sector.

U.S.-China trade talks continue in Beijing this week, and then back to Washington D.C. on May 8. The reassuring tone from the U.S. Treasury was countered with a degree of sabre rattling from an anonymous source who told Bloomberg that President Donald Trump would walk away from the negotiating table if he was not satisfied.

China kicked off a busy week of economic developments Saturday with news that recovery in key sectors had sparked a 13.9% year over year increase in industrial profits in March. The rebound, reported by the National Bureau of Statistics, was significant coming after a slump in that figure in January and February.

This week’s economic reports will include both a U.S. Federal Reserve meeting on Wednesday and the Bank of England on Thursday.

Which stocks are active?

Tracking those oil prices lower, France’s Total SA

FP, -1.25%

 fell 1.1%, while BP PLC

BP, -1.48%

BP., -0.73%

 fell 0.5% and Italy’s Enel SpA

ENEL, -1.13%

 slipped 0.8%.

Shares of Dutch technology firm Koninklijke Philips NV

PHIA, +2.52%

climbed 2.1% after it reported strong first quarter earnings based on both cost-cutting and sales increases. Net income in the quarter rose 31% and the group reaffirmed its guidance through 2020.

British Airways parent International Consolidated Airlines Group

IAG, +1.29%

 was 2.6% higher after an upgrade by UBS from neutral to buy, with a price target of 705 pence. The company will report earnings May 10.

Deutsche Bank AG

DBK, -0.91%

 fell 1.1% after Credit Suisse downgraded the financial group to underperform from neutral. Analysts took a tough line on what they called “no plan B” following lackluster earnings and the collapse of the Commerzbank AG merger discussions.

“Despite DBK’s weak profitability, it declined (for now) to offer any strategic update to improve returns. We think it will continue to lose market share in trading as it needs to continue to cut expenses amid elevated funding costs and improve its leverage ratio,” the analyst said.

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European stocks were mixed Monday morning, amid lingering concerns over the outlook for the global economy.

European Markets: FTSE, GDAXI, FCHI, IBEX

The pan-European Stoxx 600 was flat during early morning deals, with sectors and major bourses pointing in opposite directions.

Europe’s banking index led the gains shortly after the opening bell, up around 0.8%. It comes after S&P Global affirmed Italy’s credit rating at BBB on Friday. The agency is giving more time for Rome’s populist government to implement policies to address the country’s economic woes. Banco BPM, Ubi Banca and Unicredit were all up more than 2% on the news.

Looking at individual stocks, Germany’s Bayer slumped toward the bottom of the European benchmark. On Saturday, the firm’s supervisory board said it stands behind the management after a majority of shareholders refused to ratify management’s actions in 2018. Shares of Bayer slipped over 2%.

Sticking with Germany, chemicals maker Covestro said Monday core profit tumbled 58% over the first three months of 2019, with product prices under pressure as rivals bolster their output. Shares of the company fell 1.5%.

Spain’s socialists win snap election

Market participants eagerly await a meeting of the U.S. Federal Reserve and Chinese factory data for further clues on policy direction in the world’s largest economies.

It comes after the U.S. reported stronger-than-anticipated growth over the first three months of the year. Official data showed gross domestic product (GDP) stood at an annualized rate of 3.2% in the first quarter of 2019, beating analyst expectations.

The U.S. central bank’s Federal Open Market Committee (FOMC) is due to announce its latest monetary policy decision on Wednesday.

MSCI’s broadest index of Asia-Pacific shares excluding Japan, rose approximately 0.4% Monday. Japan’s financial markets are closed for a long national holiday this week.

Back in Europe, Spain’s ruling socialists clinched victory in the country’s general election Sunday.

The Spanish Socialist Workers’ Party (PSOE) won the most seats over the weekend but fell significantly short of a majority needed to form a government alone.

The election result also saw Spain’s Vox party gain 24 seats, making it the first far-right party to enter parliament since military rule ended in the 1970s.

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