CNBC's Jim Cramer knew he had to explain the stark weakness in shares of United Rentals after the stock of the largest equipment rental company in the United States lost 15 percent on Thursday and hit another 52-week low Friday.
"October has been a Freddy Krueger-esque nightmare for United Rentals. The darned thing is down 28 percent just since the beginning of the month," the "Mad Money" host said.
Part of the problem? United Rentals is "incredibly cyclical," meaning that its success is tied to the state of the economy. And the Federal Reserve's interest rate hike agenda isn't exactly boding well for the industrial giant, Cramer said.
"When the Fed signals that it's going to keep raising interest rates, making new building more expensive, everybody on Wall Street knows that's bad for business," he said. "In a potential Fed-mandated slowdown, stocks like United Rentals … become totally toxic."
And even though Cramer thought the company was actually doing "just fine," he warned that the actual earnings results don't matter to Wall Street in the same way they used to.
"Investors [are] looking for any excuse to bail because they know the numbers will be a crushed in a slowdown," he said. "So be careful, because until the Fed relents, we could see many more cyclicals that get crushed after reporting good quarters that just happen to have a slight amount of hair on them."
Cramer's game plan: Beware of companies tied to China, Fed
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Soldiers wait for a container ship to berth at Qingdao Port on March 8, 2018 in Qingdao, China.
The upcoming week of earnings reports may be the "toughest of all," Cramer warned after Friday's trading produced "the most treacherous up day" he'd seen in years.
And strong earnings reports aren't the only things working in investors' favor, Cramer said.
"It's the companies that can't be crushed by the Fed or by the trade war with China. And, in fairness, that is a shrinking group," he said. "My watchword remains the same: if a company has any of its fortunes tied to China or the Fed, then its stock is going to be guilty until it is proven innocent, and even then, I wouldn't expect the jury to acquit."
Click here for the full game plan.
PayPal CFO: 1 in 4 Venmo users' actions can be monetized
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John Rainey, chief financial officer of PayPal.
A quarter of Venmo users are currently using PayPal's millennial-friendly payments app in a way that the financial technology company can monetize, PayPal Chief Financial Officer John Rainey told CNBC on Friday.
"If we look at the most recent quarter, roughly one in four Venmo customers are using Venmo in a way today that we're able to monetize," Rainey said in an exclusive interview with Cramer.
"That could be with using Venmo to shop online, it could be using our physical card in a store, or it could be using the instant cash withdrawal so they can transfer funds immediately into their bank account," the CFO continued.
Speaking after PayPal's strong earnings report sent shares of the payments giant up more than 9 percent in Friday's trading session, Rainey reiterated CEO Dan Schulman's comments about Venmo reaching a "tipping point."
"It's a bit of an inflection point for us," Rainey told Cramer, whose charitable trust owns shares of PayPal.
To watch and read more about John Rainey's interview, click here.
Cramer's memo to Fed: Think about jobs being crushed by tech
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WASHINGTON, DC - JULY 17: Federal Reserve Board Chairman Jerome Powell.
The Federal Reserve isn't paying enough attention to the jobs being wiped out by technological innovation, Cramer said Friday.
"Right at the moment when Silicon Valley is laying waste to white-collar jobs and many factory positions — that's why companies love the cloud, it lets them fire people — the Fed is obsessed with the disaster that is full employment," the "Mad Money" host said.
"Never mind that we're not at full employment," he added. "The labor force participation rate is below 63 percent; it was above 66 percent before the financial crisis."
Reflecting on his recent trip to San Francisco, Cramer once again lamented that the Fed was so eager to raise interest rates, which it does in an effort to combat inflation, without considering the less obvious forces slowly transforming the U.S. employment landscape.
Click here for his full analysis.
Lightning round: MAR's weakness is all about the Fed
In Cramer's lightning round, he whipped through his take on callers' favorite stocks:
Marriott Intl.: "This is just people just saying the business cycle's reaching a conclusion. It's all about the Fed, otherwise Marriott would be higher because [CEO] Arne [Sorenson]'s doing a great job."
General Mills Inc.: "They bought this Blue Buffalo. Here's the problem: I don't like the stock because they took down too much money to pay for Blue Buffalo. They overpaid. They've bought a lot of stock much higher and then they're selling lower. That is not my kind of company."
Disclosure: Cramer's charitable trust owns shares of PayPal, Amazon and Alphabet.
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