Jim Cramer, host of Mad Money, recently weighed in on the factors that will shape market movements this week, pointing to the Federal Reserve’s upcoming meeting and a slew of corporate earnings reports as key developments. However, despite the importance of these earnings, Cramer believes that the presidential election will take center stage and dominate the market’s attention.

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While acknowledging the significance of the election, Cramer emphasized that the Federal Reserve’s next decision is perhaps even more crucial for the markets. He noted that the bond market has been moving in an unfavorable direction, with the situation further complicated by a disappointing non-farm payroll report.

Though this report was skewed by hurricanes and labor strikes, it initially sparked a positive reaction in the bond market, pushing rates lower. Cramer had hoped that this would signal a positive shift, but the optimism was short-lived, as bond sellers quickly drove rates back up to their highest levels since early July.

“In my opinion, the Fed needs to cut rates again. In the last couple weeks, we’ve heard from too many businesses that have made it clear that we have a real slowdown on our hands. Economy’s a little shaky.”

Cramer also reflected on the Fed’s decision to reduce rates in September. He acknowledged that the bond market reacted negatively to the rate cuts at the time despite an economy that appeared relatively strong and a healthy labor market. Cramer discussed the possibility that if the Fed were to cut rates again, the market could see another unfavorable response. However, he remained unconcerned about this potential backlash, arguing that a rate cut could help to generate optimism in certain sectors.

“At this point in my view, if the Fed cuts rates next week, psychologically there’s some hope that we could see a pickup, particularly in housing and autos, two industries that seem to be losing strength by the day.”

Cramer highlighted that both presidential candidates appear willing to expand the federal budget. His main concern, however, was whether either candidate would be able to push their proposed agendas through Congress, a process he described as extremely difficult. Cramer noted that, in his opinion, presidential candidate Trump would likely be a bigger proponent of increasing the budget deficit than presidential candidate Harris, particularly due to the tax cuts Trump favors, which tend to result in larger deficits.

Stating his bottom line, Cramer said:

“… At the end of the day, the market’s still going to be hostage to the election, and perhaps more important, to the Fed meeting.”

Our Methodology

For this article, we compiled a list of 15 stocks that were discussed by Jim Cramer during the episode of Mad Money on November 1. We listed the stocks in ascending order of their hedge fund sentiment as of the second quarter, which was taken from Insider Monkey’s database of more than 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).

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15. Fluor Corporation (NYSE:FLR)

Number of Hedge Fund Holders: 30

Cramer mentioned that Fluor Corporation (NYSE:FLR) is set to report on November 8 and said:

“Finally on Friday, here’s a company I haven’t talked about in about maybe 30 years, we hear from Fluor… It’s an engineering construction company that I’m actually starting to hear good things about. Makes sense, given all the infrastructure spending over the past couple of years.”

According to S&P Global, infrastructure spending is expected to increase in 2024, with around $1.8 trillion in federal grants, loans, incentives, tax credits, and other financial assistance being directed into the U.S. economy.

Fluor (NYSE:FLR) is a global provider of engineering, procurement, and construction services, serving a variety of industries through its diverse business segments. In energy solutions, it supports sectors like chemicals, liquefied natural gas (LNG), nuclear project services, and production and fuels. The company’s urban solutions division caters to advanced technology, infrastructure, life sciences, and mining and metals sectors.

In October, it was announced that the company, as part of a joint venture, had been approved by the U.S. Department of Energy (DOE) to begin work on the Hanford Integrated Tank Disposition Contract. The contract, with an estimated ceiling of $45 billion over a 10-year period, involves environmental management operations at the Hanford Site in Washington state. The company is set to recognize its share of earnings from this contract beginning in the fourth quarter of 2024.

On October 22, TipRanks reported that Citi upgraded Fluor (NYSE:FLR) to Buy from Neutral with a price target of $65, up from $52. The firm noted that the company’s backlog has increased in recent quarters and its execution continues to improve. It also highlighted the company’s equity stake in Nuscale Power, which Fluor holds 50% of, suggesting that it could monetize hundreds of millions of dollars from this investment. The analysts expect the company’s book-to-bill ratio to strengthen as 2025 approaches, indicating further positive momentum for the company in the near future.

14. Ferrari N.V. (NYSE:RACE)

Number of Hedge Fund Holders: 30

Calling Ferrari N.V. (NYSE:RACE) “the king of vehicles”, Cramer said:

“I’m actually talking about Ferrari, which is a monster of a stock. Everything luxury, and I mean everything, has been doing poorly because of China. See, it doesn’t matter for Ferrari because Ferrari’s more of an American stock. It would be shocking if it didn’t have more upside surprise. People keep betting against it, that’s been a sucker’s bet.”

Ferrari (NYSE:RACE) is a renowned Italian company engaged in the design, engineering, production, and global sale of luxury performance sports cars. Known for its high-performance vehicles, it offers a diverse lineup that includes special series, Icona models, supercars, limited-edition cars, and bespoke one-off creations. The company also manufactures racing cars and provides a wide range of after-sales services, such as repair, maintenance, and restoration.

In its third-quarter earnings report, released on November 5, the company revealed a 12.5% increase in adjusted earnings, reaching €2.02 per share, which slightly exceeded analysts’ expectations of €1.99 per share, as reported by Barron’s, citing data from FactSet. The company’s net revenue for the quarter came in at €1.64 billion, aligning with Wall Street’s forecast.

However, Ferrari (NYSE:RACE) faced a slight dip in shipments, with a 2% decrease in the total number of cars delivered compared to the same period last year, amounting to 3,383 vehicles. The decline in shipments was particularly sharp in mainland China, Hong Kong, and Taiwan, where sales dropped by 29% year-over-year. The slowdown in these markets has been attributed to ongoing challenges in China, where efforts to revive growth after the stringent zero-COVID lockdowns have been sluggish, leading to weaker demand for luxury products.

Despite these challenges, the company has largely been able to weather the downturn in its key markets, and its stock price had largely remained resilient prior to the earnings report. The company reaffirmed its guidance for the full year, projecting that annual sales would grow by more than 9%, reaching approximately €6.55 billion by the end of 2024, a forecast it initially issued in August.