CNBC’s Jim Cramer said Monday that the Federal Reserve could raise interest rates in August, ahead of its next scheduled meeting in September, if economic data this week show inflation is not slowing .
“The Fed is still on top of this market. A week ago, it looked like they might relax, but after Friday’s hot jobs numbers and the approval of the [Inflation Reduction Act]I’m worried that they may reduce the boom even before September comes,” he said.
“If both numbers are blistering, we’ll have a surprise meeting in August,” he predicted, referring to consumer price index and producer price index data due this week.
The Senate passed the Inflation Reduction Act on Sunday, a Democratic-backed package aimed at fighting climate change and expanding health care coverage.
The legislation, among other provisions, allows Medicare to negotiate prices with drug companies and imposes a minimum tax of 15% on large corporations.
The July jobs report saw stronger-than-expected numbers last week, meaning the central bank may have to continue its path forward to raise interest rates aggressively.
“If I were Chairman Jay Powell … I’d be hard pressed not to call a special Fed meeting this month to hit us with another 75 basis point rate hike.” Cramer said. One basis point equals 0.01 percentage point.
Investors are also looking to the University of Michigan’s consumer sentiment index this week to shed more light on how consumers are coping with inflation.
Cramer also previewed this week’s earnings list. All earnings and revenue estimates courtesy of FactSet.
Tuesday: Emerson Electric, Ralph Lauren, Plug Power, Unity Software
Emerson Electric
Q3 2022 earnings release at 6:55am ET; conference call at 9 am ET Projected EPS: $1.29 Projected Revenue: $5.10 billion
Cramer said he expects Emerson to perform well in the long term after selling its InSinkErator waste disposal business to Whirlpool, but remains curious about how the company fares in the short term.
Ralph Lauren
Q1 2023 earnings release at 8am ET; conference call at 9 am ET Projected EPS: $1.71 Projected Revenue: $1.40 billion
Although Ralph Lauren is a high-end store, it could still face the same excess inventory that other retailers suffer from, he said.
Power plug
Release of second quarter 2022 results after closing; conference call at 4:30 PM ET Expected loss: 21 cents per share Projected revenue: $159 million
Plug Power will benefit from the Inflation Reduction Act because of the bill’s hydrogen tax credit, which could help the company become more than a niche fuel cell producer, Cramer said .
Unity software
Q2 2022 results release at 4:05 PM ET; conference call at 5:00 PM ET Estimated loss: 21 cents per share Estimated revenue: $300 million
Cramer predicted the shorted stock could fall further after Nvidia’s preliminary financial results on Monday revealed weak gaming.
Wednesday: CyberArk Software, Wendy’s, Disney, Dutch Bros
CyberArk Software
Q2 2022 earnings release between 7:00 and 7:10 am ET; conference call at 8:30 a.m. ET Expected loss: 30 cents per share Projected revenue: $138 million
The company should report strong results, as cybersecurity companies tend to be shielded from economic turbulence, Cramer said.
Wendy’s
Q2 2022 earnings release at 7am ET; conference call at 8:30 am ET Projected EPS: 22 cents Projected Revenue: $540 million
Cramer said he is concerned about how inflation could hurt Wendy’s performance.
Disney
Release of Q3 2022 results at 4:05 PM ET; conference call at 4:30 PM ET Projected EPS: 98 cents Projected Revenue: $20.99 billion
“It’s too hated to believe it can be sustained,” he said.
Dutch brothers
Release of second quarter 2022 results after closing; conference call at 5:00 PM ET Projected EPS: 5 cents per share Projected Revenue: $182 million
The company is a beloved brand, but it will have to convince investors that its stock is worth buying, Cramer said.
Thursday: Warby Parker, Toast, Rivian
Warby Parker
Q2 2022 earnings release at 6:45am ET; conference call at 8:00 a.m. ET Expected loss: 2 cents per share Projected revenue: $150 million
“I’m betting, like other recent IPOs, that it will go up in the quarter,” Cramer said.
Toasts
Q2 2022 results release at 4:05 PM ET; conference call at 5:00 PM ET Expected loss: 12 cents per share Projected revenue: $651 million
He said he’s surprised that many small companies like Toast see their shares rise, even without news, suggesting they should never have fallen so much in the first place.
Rivian
Q2 2022 results release at 4:10 PM ET; conference call at 5:00 PM ET Expected loss: $1.63 per share Expected revenue: $335 million
The electric vehicle maker will likely benefit from the Inflation Reduction Act because of the bill’s extension of income tax credits for consumers who buy electric vehicles, Cramer said. He added that he still prefers Tesla.
Disclosure: Cramer’s Charitable Trust owns Disney stock.
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