Cramer's Morning Take: Johnson & Johnson Settlement 4/5/23

Jim Cramer (0:01)

Jim Cramer here to share with you a sample of my take on the market from today's CNBC Investing Club morning meeting.

We got a lot of good news here, good news for our portfolio, and it starts with the idea that we are now day two of rotation into defensive stocks. And Jeff, you know, with the ADP number being weak, with something with the Joltz number yesterday, what you really have is the possibility that the portion of our portfolio that was geared for this slowdown, and in a diversified portfolio, of course, is working.

Jeff Marks (0:31)

Yeah, starting to see a slowdown in the labor market. Of course, Friday, the market will be closed, but the non-farm payroll report will still be released. So we'll get a little bit more of a confirmation there, but we're seeing interest rates fall in reaction yesterday to Joltz, in reaction to ADP today.

And it's giving a nice rally into some of these bond proxies, whether it's the Procter & Gamble is working on another strong day. J&J, but there's news around J&J. Really as well, really just that whole cohort, the staples, the healthcare names, and it's coming from a lot of cyclicals.

Jim Cramer (1:07)

When I was signing bottles at Total Wine & More with my wife for Fosforo, which my wife's brand of Mezcal, Procter was at 136 and someone asked me what's my favorite stock in Mezcal, 136, now be aware, at 152 it's not my favorite stock anymore.

J&J up a lot off this lawsuit is my favorite because I think people are misreading what's happening here. J&J had an existential threat to its entire company, AAA Boundary, but with 40,000 claimants on a TAL case, where the claim is asbestos for ovarian cancer, very sympathetic plaintiffs, they lost a big case in Missouri, it looked like for what we could tell it was more important than the big split up that J&J has been doing. Well, what J&J did was try to get, they went to court, they tried to get something made that what a lot of people felt was a cut corner, they put two billion dollars in. The plaintiff's bar has come back and said, listen, if you give us 8.9 billion, we're fine. And that's what's happened, 8.9 billion is a very big number, but now when it comes to J&J's balance sheet, now it's gonna go to a court in Philadelphia, Michael Kaplan, who agrees that this is the way to handle it. The Third Circuit Court that didn't like the way to handle it will not have any role because the plaintiffs will not appeal. Long story short, I am saying the existential threat is gone, J&J, and now we can focus on the consumer products and on pharma and medical advice, and I think they're the cream of the crop in all three.

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Jeff Marks (2:49)

Hey.