Cramer's lightning round: I would sell Dropbox

• It's that time again! "Mad Money" host Jim Cramer rings the lightning round bell, which means he's giving his answers to callers' stock questions at rapid speed.

Kellogg: "I like Kellogg. I think it's OK. Not my favorite food stock. There are others that I like even more, but it's not bad. It's not as bad as it used to be."

Smartsheet: "No. If you're going to do cloud-based workflow, you're just going to need to do ServiceNow or … Salesforce.com."

Uber Technologies: "I think Uber's OK. I mean, look: Uber has to get rid of anything that is not making money … and I think they have a capability of doing that, but if they don't" it's just not going to work.

Dropbox: "That's a tougher one … The stock is almost at its high, but I'm a seller, not a buyer.

Disclosure: Cramer's charitable trust owns shares of Salesforce.com.

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SEC Probes Over Kodak Loan Disclosure And Stock Movement : WSJ

The U.S. Securities and Exchange Commission is investigating the circumstances around Eastman Kodak Co.’s (KODK) announcement of a $765 million government loan to make ingredients for Covid-19 drugs, the Wall Street Journal reported citing people familiar with the matter.

The company’s stock closed down 3.61 percent at $14.40 after the Journal report.

On July 27, a day before Kodak’s official announcement of the loan, the company’s trading volume skyrocketed and stock price rose about 25 percent. After the official announcement on July 28, the stock jumped over 200 percent. Shares continued to surge by over 300 percent the next day to close at $33.20 per share on July 29, 2020.

The Journal said that the agency is also investigating additional allegations of insider trading, specifically involving 1.75 million in stock options granted to chief executive officer Jim Continenza the day before the official loan announcement.

However, the company reportedly said those were regularly scheduled purchases and Continenza has not yet cashed in by selling off any shares.

Fitch Lowers Japan’s Rating Outlook

Fitch Ratings downgraded Japan’s sovereign rating outlook citing the sharp economic contraction caused by the coronavirus pandemic.

The outlook on ‘A’ rating was lowered to ‘negative’ from ‘stable’.

The agency observed that a downturn in consumer spending and business investment has been exacerbated by a steep decline in exports associated with weak external demand.

The economy is forecast to contract 5 percent in 2020, before rebounding to 3.2 percent growth in 2021 due partly to the low base effect. However, the economy would not recover to its pre-pandemic level until the fourth quarter of 2021, Fitch said.

“The Negative Outlook indicates that the higher debt ratio and downside risks to the macroeconomic outlook will nevertheless exacerbate the challenge of placing the debt ratio on a downward path over the medium term,” the agency added.

According to Fitch, Japan’s gross general government debt ratio will rise to around 259 percent of GDP this year, and stabilize just above 260 percent in 2021-22, before turning to a gradual downward path.

The rating agency projected the deficit to narrow to 10.9 percent of GDP in 2021 and 5.3 percent in 2022, as the recovery gradually solidifies and the authorities seek to return to their path of debt reduction.

Last month, S&P Global Ratings had lowered its outlook on Japan’s rating to ‘stable’ from ‘positive’ citing government spending amid pandemic.

American Financial Q2 Profit Down

American Financial Group Inc. (AFG) reported 2020 second quarter net earnings attributable to shareholders of $177 million or $1.97 per share, down from $210 million or $2.31 per share in the 2019 second quarter.

Core net operating earnings were $95 million or $1.05 per share, compared to $192 million or $2.12 per share in the 2019 second quarter. The year-over-year decrease was the result of negative adjustments to the Company’s $2.2 billion of alternative investments that are marked to market through core operating earnings. The COVID-19 pandemic has had widespread financial and economic impacts, which adversely affected returns on alternative investments.

Excluding the impact of alternative investments, AFG’s second quarter 2020 core net operating earnings decreased $12 million or $0.13 per share year-over-year.

Total revenues were $1.95 billion down from $1.96 billion in the prior year.

Analysts polled by Thomson Reuters expected the company to report earnings of $1.39 per share and revenues of $1.25 billion. Analysts’ estimates typically exclude special items.

Ethan Allen Interiors Q4 Loss Widens

Ethan Allen Interiors Inc. (ETH) reported that its fourth-quarter net loss widened to $12.07 million or $0.48 per share from $3.31 million or $0.12 per share in the prior year.

ETH closed Tuesday regular trading at $13.89, up $1.63 or 13.30 percent. However, in the after-hours trade, the stock dropped $0.89 or 6.41 percent.

Adjusted loss per share was $0.15 compared with adjusted net income of $0.46 in the prior year. Analysts polled by Thomson Reuters expect the company to report a loss of $0.54 per share for the quarter. Analysts’ estimates typically exclude special items. The decrease was primarily from net sales being negatively impacted as a result of the COVID-19 pandemic partially offset by expense management.

Net sales were $91.6 million, a decrease of 50.2% or $92.4 million compared to the same prior year period. Analysts expected revenue of $95.17 million for the quarter. Net sales were negatively impacted as a result of disruptions from the COVID-19 pandemic, which included the closing of the Company’s design centers and manufacturing plants for most of the first two months of the fiscal fourth quarter as well as lower order backlog entering the quarter.

The company declared a regular quarterly cash dividend of $0.21 per share, which will be payable to shareholders of record as of October 8, 2020 and will be paid on October 22, 2020.