Jim Cramer says the stocks that are winning in the market are those with companies in control of their own destiny. It is even worse if the companies are working against the cyclical patterns.
"They need a rising tide to lift their stocks and after this run, that is not something I want to bank on," the " Mad Money " host said.
Coca-Cola (NYSE: KO) was added to the list of companies not in charge of its own destiny because its main product, soda, is not the growth business that it used to be. Coke did take action to become leaner off-loading its bottlers, but Cramer said it doesn't have a model that can put the company in control.
On the other hand, PepsiCo (NYSE: PEP) has a snack business bringing in money and is a true growth company, Cramer said. CEO Indra Nooyi is in control of PepsiCo's destiny, and that is why Cramer thinks the stock should sell at a large premium compared to Coca-Cola.
Cramer hates talking about bonds. He knows they are boring, but on a day when the averages vaulted higher, bonds are all that matter .
"These days when rates go higher, it's game on for a host of stocks, particularly the ones that have languished as of late, like the cyclicals, the retailers and most important, the banks," the Cramer said.
Bonds are simple. When they are sold in large quantities, interest rates go higher. When they are bought aggressively, interest rates go lower.
Now, President Donald Trump just became a new outlier, Cramer said. When Trump seems to be in authority and talks about his tax plan, and investors start believing that the economy will heat up and sell bonds, he sends interest rates higher.
After all, if Trump gets his way, inflation will surge and money managers will look like idiots for holding bonds. Thus, the sellers are trying to get ahead of that scenario occurring.
To fully understand how the stock of private-label king TreeHouse Foods (NYSE: THS) surged more than 12 percent on Thursday, one must take a look at its history with Conagra Brands (NYSE: CAG).
TreeHouse has a long history of making smart acquisitions. However, some investors were displeased a little over a year ago when the company announced it was buying the private-label cereal business called Ralcorp from Conagra for $2.7 billion.
That was a lot less than what Conagra paid for it in 2013, but the view of Ralcorp was that it was not a winner. So, when TreeHouse last reported three months ago, the results were light, and shares of TreeHouse fell.
Hence, it was a huge surprise for Wall Street when TreeHouse knocked earnings out of the park on Thursday. CEO Sam Reed said that the company realized it was too focused on the carve-out from ConAgra in the previous quarter.