Cramer: Stay Long, This Bull Is Strong

On Wednesday's episode of "Mad Money," Jim Cramer told his viewers that he's tired of hearing about drinking the so-called Kool-Aid. Yes, the market continues to ramp higher, hitting new highs. But as he explained Tuesday, the economy is justifying the move.
Need more proof? Just look at the Dow Transports.
The segment continues to roar, as airline, railroad, and trucking stocks move higher. Would commerce and traveling be driving up commerce if the economy were weakening? Or would Warren Buffett -- arguably the world's most noteworthy investor -- have upped his airline holdings?
Cramer also pointed out that another important investor, activist Nelson Peltz, made a huge investment in Procter & Gamble (PG) .
Sure, some of the rally is being driven by animal spirits and the anticipation of tax reform from President Trump. But a large part of this rally is being driven by earnings, Cramer stressed.
He argued that instead of the indices being led higher by a handful of REITs, utility and biotech stocks, and FANG, we've got a broad base of rallying. Investors can see it in industrial, health care, technology and financial stocks.
Financials, and in particular, banks, can increase their profitability when interest rates go higher.
And when rates go higher because of a stronger economy, that's a good thing. The banks are inspired to increase commercial lending and fuel even more economic expansion, Cramer reasoned.
Best of all? Bank stocks still trade with a below-market valuation, he said.
Here's the bottom line: While some people may think the market is spiraling out of control to the upside, they need to realize there are several classic signs presenting themselves that the market may in fact know what it's doing and that this rally isn't out of control.
In the show's "Off the Charts" segment, Cramer took a closer look at copper. The metal is known as "Dr. Copper" on Wall Street because of its correlation with the global economy. So Cramer wanted to size up this helpful economic barometer.
When copper is in high demand, it generally means the economy is doing well because so many products require the commodity, likes cars, houses and factories. If copper's being bought, there's usually a reason for it.
According to the work from Real Money contributor Ed Ponsi, copper's breakout last week appears to be the real deal. Known as an ascending triangle, the commodity completed the bullish setup after it broke out to the upside and looks like it could rally from $2.80 per pound to $3.
It helped that the strong rally was done on heavy volume as well. And it was more than a coincidence that China recently reported a slew of strong economic results. The country buys more than 50% of the world's copper each year, and so when its economy heats up, copper will feel the spark.
Copper also tends to have a high correlation with the stock market. Cramer pointed out that the metal's rally proceeded the stock rally in November 2017, as well as two months before the 2009 low.
However, Cramer also pointed out that a shortening in supply could be driving prices up too, which would throw some cold water on the bullish case. So while investors shouldn't go all-in just because Dr. Copper is rallying, they should also pay attention to the metal's recent move.
What makes Procter & Gamble such a great consumer products company? Cramer pointed out the company's superior products, near-impervious business model regardless of economic times, and its capital return plans through its buyback and dividend.
So why does this stock trade with an above-market multiple, while a company like Apple (AAPL) sells at just 15 times earnings?
Cramer pointed out that Apple has a fabulous buyback and rapidly rising dividend, also creates market-leading products and has a business that can weather strong economic storms as well. Not to mention, its services revenue business has been on fire and provides the company with a stable, rising stream of income.
Perhaps if different analysts took a look at this stock -- perhaps the people that cover Newell Brands (NWL) and Clorox (CLX) rather than those who cover social, cloud and mobile companies, they would appreciate the company more.
Or what about Facebook (FB) and Alphabet (GOOGL)? Many label them as just online advertising companies.
But Facebook could seemingly become the world's largest entertainment company, while Alphabet is a data center and cloud behemoth, with a self-driving car unit in Waymo to boot.
Long-term investors would be foolish to discount these future earnings generators and should consider just how valuable these companies can be down the road.
Adobe Systems (ADBE) is a stock Cramer knows well, thanks to it being a holding in his Action Alerts PLUS portfolio. That's why he was excited to sit down with CEO Shantanu Narayen and discuss the business.
In the Lightning Round, Cramer was bullish on Nvidia (NVDA) , Hershey (HSY) , Accenture (ACN) , Cheniere Energy (CQP) , Inovio Pharma (INO) and Schlumberger (SLB) .

He was bearish on Emerge Energy Services (EMES) and Seaspan (SSW) .

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