As President Donald Trump prepares to meet with Chinese President Xi Jinping and other world leaders at this weekend’s G-20 summit, CNBC’s Jim Cramer wanted to help investors hedge against the risk of U.S.-China trade talks going south.
While reports have suggested that Trump will seek a truce at the Buenos Aires, Argentina gathering, Cramer thought he might use more of a stick-and-carrot approach, keeping with his plan of raising the existing 10-percent tariffs on Chinese imports to 25 percent at year-end, then offering a “carrot” by holding off on an additional round of duties.
“When we come in on Monday, you need to be ready in case President Trump spends the whole night back from Argentina tweeting about how his best friend … President Xi forced him to ignite the 25-percent tariff fuse,” the “Mad Money” host said Thursday. “If he does, you’re going to get a down market.”
So, ahead of the summit, “you need stocks with built-in catalysts, the stocks of companies that are willing to reinvent themselves into something the market likes more than their current form,” Cramer said as the major averages traded higher.
Cramer’s four picks were the stocks of Dollar Tree, CVS Health, McDonald’s and Constellation Brands. The common thread? All four companies are going through some sort of reinvention or restructuring that he thinks will create value going forward.