Strong labor report could bring bigger Fed hikes

CNBC’s Jim Cramer on Monday told investors that a key labor report could help drive the Federal Reserve’s inflation strategy.

“We need to see the unemployment rate go higher, while wages remain stable and we get meaningful layoffs in some industries. If that doesn’t happen, if the numbers are truly strong, then the Fed heads will come out of the woodwork and start talking about how we need more enormous rate hikes,” he said.

Stocks slid on Monday to start the week, weighed down by protests against Covid restrictions in China that erupted over the weekend. 

The Labor Department is set to release the November nonfarm payrolls report on Friday and could cap off what could be a tough week for the market, according to Cramer. “Seasonally, it tends to be a little bit weaker, before things really take off again come December,” he said.

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

Tuesday: Workday, CrowdStrike

Workday

• Q3 2023 earnings release at 4 p.m. ET; conference call at 4:30 p.m. ET
• Projected EPS: 84 cents
• Projected revenue: $1.59 billion

Cramer predicted it’ll be difficult for the company to top its last “spectacular” quarter.

CrowdStrike

• Q3 2023 earnings release at 4:05 p.m. ET; conference call at 5 p.m. ET
• Projected EPS: 48 cents
• Projected revenue: $788 million

He said he’s interested in seeing if the company can change from a pure growth play to a profitable growth name.

Wednesday: Hormel Foods, Petco, Salesforce, Okta

Hormel Foods

• Q4 2022 earnings release at 6:30 a.m. ET; conference call at 9 a.m. ET
• Projected EPS: 50 cents
• Projected revenue: $3.38 billion

Hormel might follow other food stocks that have stopped going down, Cramer said.

Petco

• Q3 2022 earnings release at 7:30 a.m. ET; conference call at 8:30 a.m. ET
• Projected EPS: 16 cents
• Projected revenue: $1.49 billion

He said he’s worried the company will report disappointing results.

Salesforce

• Q3 2023 earnings release at 4:05 p.m. ET; conference call at 5 p.m. ET
• Projected EPS: $1.22
• Projected revenue: $7.83 billion

Cramer said he doesn’t expect co-CEO Marc Benioff to “tolerate” the fact that the stock is one of the worst performers in the Dow Jones Industrial Index.

Okta

• Q3 2023 earnings release at 4:05 p.m. ET; conference call at 5 p.m. ET
• Projected loss: loss of 8 cents per share
• Projected revenue: $591 million

“Like so many companies in Silicon Valley, I think Okta’s going to have to learn to live with less [workers],” he said.

Thursday: Dollar General, Kroger, Ulta Beauty, Marvell Technology

Dollar General

• Q3 2022 earnings release at 6:55 a.m. ET; conference call at 10 a.m. ET
• Projected EPS: $2.54
• Projected revenue: $9.42 billion

Cramer pointed out that while analysts love the stock, products at the company’s stores are more expensive than they used to be.

Kroger

• Q3 2022 earnings release at 8 a.m. ET; conference call at 9 a.m. ET
• Projected EPS: 82 cents
• Projected revenue: $33.99 billion

While the company will likely deliver a good quarter, people will only care about the status of the company’s planned merger with Albertsons, he said.

Ulta Beauty

• Q3 2022 earnings release at 4 p.m. ET; conference call at 4:30 p.m. ET
• Projected EPS: $4.13
• Projected revenue: $2.21 billion

Cramer said he expects a huge earnings beat from the company.

Marvell Technology

• Q3 2023 earnings release at 4:05 p.m. ET; conference call at 4:45 p.m. ET
• Projected EPS: 71 cents
• Projected revenue: $1.80 billion

While he’s a believer in the stock, it likely won’t soar until the industry-wide chip glut becomes resolved, he said.

Disclaimer: Cramer’s Charitable Trust owns shares of Salesforce.