Nike’s and FedEx’s quarters demonstrate important lessons for investors

Nike and FedEx earnings offer investors an important lesson, says Jim Cramer

CNBC’s Jim Cramer said Wednesday’s Wall Street reaction to Nike and FedEx’s quarterly results offers an important lesson for investors: It’s misguided to focus solely on the Federal Reserve’s comments and predictions about where the S&P 500 is headed as a will develop next.

Both companies reported better-than-feared earnings Tuesday night, which sent their respective shares higher and helped lift sentiment across the market. All three major US stock indexes posted strong gains on Wednesday, reversing some of December’s declines.

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“They have a contingent of professional commentators and money managers pretending that nothing matters but what the Fed is saying and the price levels of the S&P 500,” Cramer said. “You see, they’re dead wrong, but that mentality explains why so few of them saw today’s rebound coming.”

Cramer said it’s possible Wednesday’s more positive sentiment will quickly fade and bearish waves will sweep the market again. He said the unexpected rebound – driven in large part by corporate earnings – shows the benefit of focusing on individual companies that can beat expectations. Putting too much emphasis on the S&P 500’s next move can complicate that task, he said.

“Inventory isn’t just bushels of wheat or bales of hay or any other type of grain. There are big differences between individual companies,” Cramer said.

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Jim Cramer talks about Wednesday's stock market rally and explains its lesson for investors

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