Five companies were able to push past Wall Street’s negativity on Tuesday by reporting earnings results that weren’t as bad as investors thought, CNBC’s Jim Cramer said.
“When you have expectations that are through the floor, and you don’t get huge blowups like you did with Nvidia, then you have tinder for a fire,” Cramer said on “Mad Money.” “That’s just what we got from these five stocks.”
Shares of 3M, for one, were immediately met with selling after the diversified manufacturer reported its results. Investors balked at the company’s sales guidance cuts, some of which were tied to China.
But less than an hour after the report, the stock turned as investors realized that health care, a key division that many had deemed stagnant, saw higher sales globally in 3M’s fourth quarter.
“Expectations were about as low as you can get” ahead of the report, Cramer said. “So now, instead of a stock that you would expect would go down on the shaded forecast, you had one that surprised.”
The same thing happened with pharmaceutical giant Pfizer. The company also slashed its guidance, but the stock rebounded on what Cramer called a “fine-print triumph” investors hadn’t initially noticed.
“Pfizer reported some amazing fourth-quarter operational growth [of] 5 percent,” Cramer said. “I was blown away by how strong that was. It means that the future will be brighter than the past.”
“The wildest and most wacky” reversal came from Whirlpool, an appliance maker that topped consensus earnings estimates, but cut its forecast, sending Wall Street into a tizzy as analysts raced to lower their price targets.
“It was hideous and the stock looked like the biggest loser of the day,” the “Mad Money” host said. “But upon further review, the company ended up telling a compelling story on its conference call [that] explained why it shaded its forecast.”
AMD also disappointed the bears who assumed it would experience a similar shortfall to Nvidia’s. The rival chipmaker pre-announced a weaker-than-expected quarter Monday that dragged much of the stock market lower.
“People assumed the very worst from AMD. They didn’t get it,” Cramer said. “What they got was a quarter that met estimates and a guide-down that was much less than we got from Nvidia.”
Finally, there was Apple, which pre-announced weaker first-quarter results in early January. Expectations for the iPhone maker’s Tuesday evening report were so low that the company managed to top them, with its stock popping nearly 5.5 percent in after-hours trading.
To Cramer, it meant “no more new ammunition” for the Apple bears.
All in all, this action has set the market up well for the days ahead, the “Mad Money” host said.
“If [Federal Reserve Chair] Jay Powell doesn’t blow us up tomorrow, … I think we may be set for a decent finish to this week,” he said.