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Before “Mad Money” host Jim Cramer laid out his “Game Plan” Friday, he noted that “the week ahead will be determined largely by what occurs this weekend,” especially as it relates to Europe’s debt crisis.
As it stands, Cramer noted Spain’s economy is teetering not on the brink of a recession, but of a depression. Spain is not rich enough to stem the declines in both employment and production, as well as the bank runs, that are a result of a depression. So Cramer thinks someone needs to come to Spain’s rescue, otherwise the troubled country could become “the destroyer of the euro and European Union.”
To prevent such an event, Cramer thinks Spain and the EU must release a joint statement Sunday, which announces an agreement on federal deposit insurance that guarantees savings deposits in euros, effectively ending security risk for banks. Such a statement could cause the markets to rally, Cramer said, but he worries a lack of an agreement could cause stocks to fall, too.
Looking forward to Monday, Cramer hopes to get a read on telecom spending when Ciena holds an analyst meeting and Finisar reports earnings. Cramer suspects Ciena could say spending is coming back, but questions whether Finisar will say the same. Either way, he said both companies need to say something positive for the telecom stocks to push higher.
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