In this article, we will look at the stocks Jim Cramer discussed during Mad Money, as he called the growing wave of stock offerings and debt issuance a threat to the bull market. The host of CNBC’s Mad Money said on Wednesday that while the market has managed to absorb the recent wave of new stock and bond issuance, he is becoming increasingly concerned that the volume of new deals could eventually outpace investor demand.
I’m worried about the supply, specifically the flood of new equity and bonds that have been inundated. This market’s sopping up a lot of sideline capital. I’m a lot more concerned about that than I am about the traffic in the Strait of Hormuz. Let me explain. You know I’ve always said that excess supply, too much stock than the market can handle, can kill any bull market, and I do fear it’s getting to be too much right now. If the issuers and the investment banking minions don’t rein things in, pull it back a little, I think the bull is going to get hurt.
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Cramer also said the amount of equity and debt issued since the beginning of June has been unusually large, making him more cautious. He noted that the market is being flooded with both new and secondary offerings, and the scale of issuance has become difficult to ignore.
Here’s the bottom line: We haven’t reached the danger zone yet, but if these offerings keep coming at this pace, we will not be saved from oversupply. We need to see more new money in this market, too. We need some big takeovers… and we need to see a break in the IPO and secondary action already. IPO abstention and heightened M&A activity can still save the bull. But if we keep getting this new level of supply for a few more weeks? The bull will suffocate under the weight of all that new paper.
Our Methodology
For this article, we compiled a list of 13 stocks that were discussed by Jim Cramer during the episode of Mad Money aired on July 8. We listed the stocks in the order that Cramer mentioned them.
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13. LyondellBasell Industries N.V. (NYSE:LYB)
LyondellBasell Industries N.V. (NYSE:LYB) was among the stocks Jim Cramer discussed during Mad Money, as he called the growing wave of stock offerings and debt issuance a threat to the bull market. Toward the end of the lightning round, answering a caller’s query about the stock, Cramer said:
Okay, I think it’s going to bounce back. It sells at six times earnings. It’s a heavy commodity stock. It actually depends on China. China’s not ordering that much, but I will say this: it’s inexpensive right here with a 5% yield. I’m not worried about what’s happening with it, but if it bounces, please make a move and [sell, sell, sell].
LyondellBasell Industries N.V. (NYSE:LYB) produces chemical solutions, polyolefins, and compounding plastics used in food packaging, automotive components, and home furnishings. The company also creates and licenses chemical processing technologies and supplies polyolefin catalysts.
12. Amprius Technologies, Inc. (NYSE:AMPX)
Amprius Technologies, Inc. (NYSE:AMPX) was among the stocks Jim Cramer discussed during Mad Money, as he called the growing wave of stock offerings and debt issuance a threat to the bull market. A caller mentioned that they sold 40% of their position and asked whether they should take gains on the remainder, hold, or add to it on weakness. Cramer replied:
No, this is a good situation. This is good. I like it. No, I would actually be thinking about getting back in, buy some more. It’s a good spec.
Amprius Technologies, Inc. (NYSE:AMPX) creates advanced silicon-based batteries designed to power high-performance flight tech like drones and satellites. A caller asked about the company during the May 1 episode, and Cramer responded:
You know, okay, this is another spec. It’s a storage spec, and it’s got, it makes a lot of sense. Once again, two specs that I’m willing to go with. You’re allowed to have one spec in your portfolio of five.
