On Friday, Mad Money host Jim Cramer discussed this week’s main market drivers and placed emphasis on earnings reports and recent economic data.

“When you get a strong employment report like we did this morning, it does a lot of things that you need to know about. First, it takes a near-term recession kind of off the table. Very difficult to have recession with a 4.2% unemployment rate. That’s just too much demand for workers.”

READ ALSO: Jim Cramer’s Thoughts on These 13 Stocks and 8 Stocks on Jim Cramer’s Radar Recently.

Beyond that, Cramer pointed out that strong employment data also influences the Federal Reserve’s thinking, especially ahead of this week’s policy meeting. He explained that a tight labor market discourages the Fed from lowering interest rates.

Lastly, he noted that this kind of labor report can trigger a strong rally in stocks, provided that wage inflation remains under control. Cramer emphasized that while the government releases a constant stream of economic figures, none carry the same weight as the jobs report. He noted, “That is the real predictive power when it comes to the stock market.”

“So keep in mind that today’s rally may not be one off as we go through our game plan for next week. But first, let me just say we’re over the hump. We’ve now had companies that reported fabulous numbers.”

Furthermore, another driver behind Friday’s market surge, according to Cramer, was news out of China suggesting a possible diplomatic overture. He said the rally accelerated after reports surfaced that Chinese officials were considering a deal involving tougher action against fentanyl. If the proposed agreement materializes, Cramer believes it could extend the rally further. He said, “If that comes true, I expect this rally will have legs.”

“Here’s the bottom line: We know that we’re living through a time of great tumult. We could easily be thrown off if President Trump responds harshly to this Chinese olive branch this very weekend. If that happens, there could be some unwinding to do. Right now, though, it looks like the momentum can keep up as long as we don’t get a total breakdown in the nascent trade talks between the world’s two biggest nations.”

Our Methodology

For this article, we compiled a list of 21 stocks that were discussed by Jim Cramer during the episodes of Mad Money aired on May 2. We listed the stocks in the order that Cramer mentioned them. We also provided hedge fund sentiment for each stock as of the fourth quarter of 2024, which was taken from Insider Monkey’s database of over 1,000 hedge funds.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

21 Stocks on Jim Cramer’s Radar

21. DraftKings Inc. (NASDAQ:DKNG)

Number of Hedge Fund Holders: 65

DraftKings Inc. (NASDAQ:DKNG) was the last company in Cramer’s game plan for this week, and he remarked:

“Will DraftKings make a comeback here? We like this company very much, but the stock does seem stalled, doesn’t it? Maybe it needs more states to legalize sports betting.”

DraftKings (NASDAQ:DKNG) is a major digital sports entertainment and gaming company that provides online sports betting, casino games, daily fantasy sports, and retail sportsbooks. The company also offers sports betting and casino gaming software for both online and retail sportsbooks, as well as iGaming operators. Nightview Capital stated the following regarding the company in its Q4 2024 investor letter:

“DraftKings Inc. (NASDAQ:DKNG) has been a solid performer, benefiting from the growth of online sports betting (OSB) in the U.S. However, we recently decided to exit our position due to concerns about its long-term competitive positioning and an evolving risk/reward profile. While the company has shown impressive user growth and reached profitability, its reliance on high customer acquisition costs and a crowded competitive landscape raises questions about sustainability. The industry’s low barriers to entry mean DraftKings must continually invest to maintain its edge, which could compress future margins. Additionally, we see a ceiling on market expansion as OSB approaches saturation in key states.

Our decision was also influenced by the rising potential of alternative opportunities in more differentiated industries with structural advantages, which align better with our investment philosophy of long-term compounding.”

20. Cloudflare, Inc. (NYSE:NET)

Number of Hedge Fund Holders: 55

Praising Cloudflare, Inc.’s (NYSE:NET) CEO, Cramer commented:

“Two winners after the close, McKesson, the ultimate drug middleman with the target on its back that’s never, never been hit, and Cloudflare, yes, the cybersecurity firm brought to you by Matthew Prince, who gave you a superb number last time, remember. I bet he can do it again.”

Cloudflare, Inc. (NYSE:NET) delivers cloud-based solutions centered on security, speed, and connectivity. The company’s offerings include integrated protection, networking tools, and edge computing with AI accelerators for developers.