Jim Cramer, host of Mad Money, recently shared his thoughts on the market’s movements this week, focusing on the economic data that’s shaping the outlook. He highlighted the upcoming nonfarm payroll report on Friday, noting its potential to sway market sentiment. Cramer pointed out that the market has been shaken by the persistently high 10-year treasury bond yields, which refuse to drop.

“Friday’s employment numbers need to show lower wage growth and disappointing hiring. Now that could bring down the yield in the 10-year and therefore make people feel that the Fed will be back on schedule to start cutting the rates again. We gotta get them back into that groove, you know. On the other hand, if hiring and wages remain hot, well then anything good that happens next week could be repealed.”

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The labor report is especially critical, according to Cramer, because despite the strength in sectors like autos, housing, and materials, the overall economy may still be running too hot for the Fed to slow it down as needed. He turned his attention to other economic indicators, such as the Purchasing Managers’ Index (PMI), which is offering strong signals of economic activity. Cramer mentioned a recent report, including Monday’s release of the PMI composite index, as an important barometer for the economy.

This data, he explained, provides valuable insights into how the economy is performing across different sectors, with particular attention to manufacturing, which has shown particularly strong performance. In addition to these key reports, Cramer also mentioned the implications of the Job Openings and Labor Turnover Survey (JOLTS), specifically focusing on job openings.

“I’ve been mulling over these job openings numbers and I keep thinking about how President-elect Trump might reverse the high levels of immigration we’ve seen under the Biden administration.”

Cramer warned that mass deportations could create a labor shortage that would drive wages even higher, especially if the country cannot rely on enough workers to fill the gaps. In that case, Cramer mused, “robots may be our only hope,” alluding to the role of automation in addressing potential labor shortages.

“So here’s the bottom line: It’s a light week, but still impactful, accept that people will be on edge ahead of Friday’s employment report. Still, I think you should do some buying if the market gets hammered. As we saw today, it’s not nearly as bad out there as so many think.”

Our Methodology

For this article, we compiled a list of 7 stocks that were discussed by Jim Cramer during the episode of Mad Money on January 3. We listed the stocks in ascending order of their hedge fund sentiment as of the third quarter, which was taken from Insider Monkey’s database of 900 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

Jim Cramer Discussed These 7 Stocks

7. ServiceTitan, Inc. (NASDAQ:TTAN)

Number of Hedge Fund Holders: N/A

Ahead of ServiceTitan, Inc.’s (NASDAQ:TTAN) third-quarter fiscal 2025 earnings release, Cramer said:

“There’s not a lot of corporate news of any consequence, but a recently minted IPO ServiceTitan, which is [a] software as a service company to help tradespeople, is going to report and I think it’s gonna give us a great quarter, maybe one that is so good that it’ll worth be buying ahead of.”

ServiceTitan (NASDAQ:TTAN) is a provider of cloud-based software designed to assist businesses with a variety of tasks including advertising, scheduling jobs, dispatching, invoicing, and processing payments. In December, the company announced the pricing of its initial public offering (IPO).

From fiscal 2021 to fiscal 2024, the company’s revenue grew from $179.2 million to $614.3 million, marking a compound annual growth rate of 51%. Despite this significant revenue growth, the company reported net losses of $269.5 million in fiscal 2023 and $195.1 million in fiscal 2024. The markets the company serves represent roughly $650 billion of the total $1.5 trillion annual industry spend. The company captures, on average, approximately 1% of its customers’ Gross Transaction Volume (GTV) as revenue from the usage of its software products.

ServiceTitan (NASDAQ:TTAN) estimates that by offering its full suite of products, it has the potential to capture around 2% of its customers’ GTV as revenue. With its current product offering and serviceable industry spend, the company estimates that its total addressable market opportunity is approximately $13 billion.

6. Walgreens Boots Alliance, Inc. (NASDAQ:WBA)

Number of Hedge Fund Holders: 33

While Cramer commended Walgreens Boots Alliance, Inc.’s (NASDAQ:WBA) CEO, he mentioned that it is difficult to bet on the stock.

“Finally, there’s Walgreens Boots Alliance. That’s the ailing drugstore chain. It needs to do something, anything to reverse its forces. And now I believe, and I have tremendous faith in CEO, Tim Wentworth. I don’t think he’s sitting idly. I think he’s working on a change and he might even have buyers lined up for some parts of the company and maybe not all. I would not bet against this man, but it’s still pretty hard to bet on Walgreens.”

Walgreens (NASDAQ:WBA) is a prominent name in the retail pharmacy sector, with a diverse range of brands under its umbrella, including Walgreens, Boots, Duane Reade, No7 Beauty Company, and Benavides in Mexico. However, the company has faced significant financial challenges, with its stock losing more than 80% of its value over the past five years.

The company is facing increased competition from tech-driven retailers like Walmart and Amazon in the pharmacy sector. The company reported a $526 million operating loss in the fourth quarter, largely due to a $332 million impairment charge. The company is undergoing a turnaround, considering asset sales and cost-cutting measures. As part of a turnaround, it plans to close 1,200 underperforming stores, focusing resources on its more profitable locations.

CEO Tim Wentworth highlighted that, despite challenges, around 6,000 of its 8,000 stores remain profitable. Additionally, Walgreens (NASDAQ:WBA) made a significant move in early 2024 by cutting its dividend yield by 48%, with a focus on prioritizing capital allocation. In early December 2024, The Wall Street Journal reported that the company is in talks with private equity firm Sycamore Partners regarding a potential go-private deal, which could be completed in early 2025. However, neither Walgreens nor Sycamore has officially commented on these discussions.