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Mad Money w/ Jim Cramer
Mad Money w/ Jim Cramer 7/25/24
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I'm here to level the playing field for all investors. There's always a more market summer, and I promise to help you find it. Man money starts now. Hey, I'm Kramer. Welcome to Man Money. Welcome to Craymarica. I'm here with my friends. I'm just trying to make you a little money. My job is not just to entertain, but to educate and teach you. So call me at 1-800-743-CBC-TWEET-BITCHUP-CRAVER. This market might actually be at a fulcrum here. Lately, we've seen relentless selling in the large cap technology stocks that had previously led us higher for years combined with the tremendous infusion of cash into the small cap, largely domestic companies. This rotation's been agonizing for anyone who's stuck with the long-standing winners, including today. But it's Nirvana for those who died with the losers, the worst-performing stocks. The stocks are buried in the Russell 2000, and it hasn't been small cap 600 index. Today, after a vicious crescendo of selling in the morning, we sold the large cap tips, actually trying to rebound from the lows, and it boosted the entire market. Even if we gave up much of those gains in the afternoon, now I was able to finish the day up 81 points. S&P dip.51 percent. And then as I filled with software, internet and semiconductor stocks once again got ugly, and it shed .93 percent. Sometimes it just comes down to who do you trust. This brutal change in market leadership started on July 11th. We got a cooler than expected consumer price index number for June. Decline inflation that makes it possible for the Fed to cut rates terrific. Maybe sooner than we thought. Was that weak inflation number really the cause of the switch, though? I think it started that way. But it's game momentum during that period where former President Trump seemed like the prohibitive front runner in the race for the White House, a moment where he doubled down on his protectionist economic instincts by picking JD Vance as his running mate. This GOP tandem is incredibly hostile to companies that move their manufacturing overseas. And they've been adding about wanting to slap tariffs on any and all imports. Terrible for international companies into shareholders. This rotation, out of large cap tech and into the small cap, went into overdrive nine days ago, when Bloomberg published an interview in which former President Trump questioned whether it was worth defending Taiwan from China, even though Taiwan manufactures most of our advanced semiconductors, because he believes they stole that business from us and he doesn't want to, doesn't want to give it away. And he doesn't want to protect them unless they pay up. With that, Trump poured gasoline on large cap bonfire, innovating the king of the tech rally in Vidya. He was in Vidya. Well, there you have all the chips made in Taiwan. Obviously, the presidential race is in a different place now that Democrats have changed candidates, but this remains a major consideration. Since then, the markets have been to the entire leadership cohort, crushing the so-called magnificent seven, as Wall Street began to question the future of artificial intelligence and doubting whether all these big data centers are ever going to pay off. I know I'm concerned about our government's policy toward tech. You know that, especially the semis, which are at the heart of accelerated computing and artificial intelligence. Those are the two most important tech themes on earth. That's why we need to go to the person in the administration who understands the sensitivity of these issues. The person that can articulate where this country is right now on the semis, on Taiwan and on trade with China, which used to be a major market for American chips, but now it continues to be hated by Republicans and, yes, Democrats alike. And that's why I'm thrilled to have Gina Ramondo. She's the U.S. Secretary of Commerce with us tonight to figure out the land, the state of place. Secretary Ramondo, welcome back to May of Money. Hey, Jim. Great to be with you. All right, Madam Secretary, until 10 days ago, I thought that what could happen in this country is that we would always defend Taiwan as our ally. They may not have -- they may have usurped us when it comes to high-end semis, but it's so important that they be our friend in terms of the military, in terms of what we can do with our supply chains, that it would be difficult to -- you don't want to endanger it. And yet I felt that the president, let's say President Trump, really when he said that Taiwan might have to pay for protection, put that relationship in jeopardy. Did you feel similarly? You know, look, I know that my boss, President Biden, has been crystal clear on this topic, and I think there's no place to be reckless here or play politics with this. Right now, Jim, you know 93% of our chips come from one company in Taiwan. You just mentioned NVIDIA. Every single AI chip that NVIDIA designs is made in Taiwan. And we need those in our cars, in our phones, in our military equipment. So to be sure, it's time to get serious and have serious solutions to these issues, which is exactly why we passed the CHIPS Act and exactly what we're doing and implementing it. At the same time, we know that the highest end chips require tremendous foundry capacity for particular specialized businesses. At the same time, we're building, as you said, with the CHIPS Act, lots of foundries here. But can't there be that mixture? Don't we need some in America and some made in Taiwan if we're going to be safe as a nation when it comes to being a military power versus, say, the Chinese? Yeah, absolutely. But right now, it's nearly 100% in Taiwan and zero in the United States. And that is untenable, unsafe, and makes us vulnerable. So our goal, I've set a goal, Jim, to have 20% of leading-edge chips made in this country by the end of the decade. And I hope we also have some made in our allied countries, for example, in Japan. But, you know, there will always continue to be production in Taiwan. We just have to get out of this place of extreme vulnerability. Do you think Taiwan stole those jobs and did they steal the business from our country? I know those were choices that American business people made. I mean, this didn't happen overnight, you know, as well as I did. You know, American businesses were in search of cheap capital and cheap labor and profits. So everything went overseas, China, Taiwan, et cetera, except we wake up now and we find that whether it's chips or critical minerals or components were vulnerable. Not everything's about short-term profits. You have to also have national security in your lens, primarily. If I were running Taiwan semi and there is a country that is 110 miles away from me and they would like my production run, and I felt that another country the United States would not protect me, I would call, I would call President Xi and say, "Listen, we got to make a deal. We got to give you more of our capacity." Isn't that what's at risk here while we figure out how to make as many chips in this country as we can? Yeah, that is at risk. But what I can tell you is I have had an excellent relationship with the executives at Taiwan semi. They are, first of all, it's an amazing company. And second of all, they're deeply committed to their investments in the United States. They want to be here. The U.S. leads the world in AI. And so I feel really great about where we are in implementing the President's Chips Act. And you're okay with that recent chip at the H20, Nvidia chip? That's still clear, right? That's the chip that's going to go to China with your blessing. I don't want to, I don't know that specific chip, but Nvidia's been a great partner and they only ship what we've blessed. All right, let's talk about what you've done in the United States. Where are we in terms of the build-out? Where are we in terms of production? We're steaming ahead, Jim. By the end of this year, we'll have deals done with all the major players, Intel, Samsung, TSMC. I think, you know, TSMC is ready to start having chips come off the line next year. So, as I said, we're right on path, if not ahead of schedule. We're also working on the supply chain. It's not just the factories. It's all the substrate, materials, etc. We're working on training. That's the other thing, you know, setting up training partnerships. So, we're right on path and it's an audacious goal to have 20% of the chips made in the US by 2030, but we're going to make it happen. There are people that I hear from the other party that are critical of the idea that you've anointed industries. I have looked at the people who do the picking and do the choosing and do the working with companies. I'd like you to just fill in. Just fill in the American people. Who is working with you within your team and their backgrounds? Because these are people that I know and I've worked for and worked with and hired, and they're really good. Yeah, absolutely. By the way, this is, there's no one political on the team, right? So, I have someone who was a partner for 25 years at KKR, folks who've come from, you know, Goldman and JP Morgan, Intel, TSMC, project managers from HP and IBM. We've put together a gold star team, totally committed to the mission to get this done. And by the way, we hear from companies. Every single company I've spoken to has said their interaction with our team has been top-notch professional and actually help these companies make their plans better. I've checked with almost everybody. I keep hearing the same terms, two words, trusted advisor. And we usually don't get that from the government. Now, we have had a change in who's at the top of the ticket. And I'd like to know whether so all systems go for chips or is it going to be, is there another plan in mind? All systems go. So, the president said last night in his beautiful, honorable address, we get a lot of work to do in the next six months. As I said, between now and the end of the year, we're going to sign our deals with all these major companies. And this is a Biden-Harris initiative, and I have absolutely no doubt that a president-Harris would continue to be strongly behind this initiative. She's been very involved in this from the beginning, and I have no doubt she'll take it home. No, there are two companies that I'm trying to figure out where they stand with you these days. One was Texas Instruments. They were asked on the conference call about where they are with you. And the other is Micron. Micron has spent a fortune in this country and hasn't, you know, and they did it without U.S. dollars. I mean, everyone else moved away, okay? And that did not happen with Sanjay Morotra. He was committed to the United States. What do you say to the guys who moved away or are getting a handout? Now, when you had Sanjay just saying, you know what, invented here in the U.S. Sometimes I feel like that they're not getting a fair shake. Micron's getting a very fair shake. We have a very generous deal on the table for them. And because of that, you know, tens of billions of dollars, they'll be able to expand to the United States, which is good for America. We need memory made in America. Texas Instruments is a great American company. You know, I talk about Intel as our U.S. chip champion, and they are. So is TI. It's understated. It's under the radar, but it's a great American company. I don't have anything to announce today on that, but, you know, we are working closely with them. I'm trying to get to this state of play with China right now. Do you think that we have to do more in this country to teach them a lesson? I know that a lot of the semiconductor capital equipment companies have told me, wow, they keep slapping us down. They keep slapping us down. We don't know exactly what we can and can't sell to them. When you talk to the KLA's and when you talk to the lambs, that's a little bit more difficult conversation than it is to talk to one of our American semis. What are the conversations like? Difficult, exactly as you say, Jim. Look, I never want to deny any American company any revenue, not a penny of revenue. I want them to have the revenue and reinvest the profits in research and development. But sometimes national security, you know, has to take a front seat and profits have to take a back seat. And so they're tough decisions. I try to be surgical about them. But I do want to say something. This isn't about teaching China a lesson, you know, not at all. It's about protecting Americans, right? It's about protecting Americans. China will do what it's going to do and I need to protect the American people. See, a lot of times I feel like say, applaud materials. The intellectual property that they put out is really the guts of technology. And I feel like they have to be, I don't want to say you have to treat them better because that sounds like, well, listen, I want to treat your parent and their kids. But these are great American companies. And they are really committed to being great, great citizens of our country. And sometimes I feel like it's really not their fault. It just doesn't matter. Does it? We have to worry about defense and military and what the Chinese do. Exactly right. By the way, we love those companies. We do help them. I want to support them in every way that I can. But not at the expense of getting advanced technology into the hands of the Chinese military that they can use against America. That's not in those companies' interest or the interest of their employees or their families. Okay. Dialogue between you and all these great American companies about Vice President Kamala Harris. What it means is that she's more pro business, less business. I'm sure these people give you some scottle, but how are they feeling? I think they're feeling good. I mean, she is. I've known her for three and a half years. It's been an honor to work with her. She's energetic. She's brilliant. They know that she will be interested in working with them, listening to them. And most important, she'll bring stability, which every business leader wants stability and predictability. Is it fair to use the word sophisticated? She's very sophisticated about the ways of Silicon Valley because where she's from and that makes the dialogue all, let's say, worth even more? Yes. I have worked with her on AI, on broadband. She is sophisticated. She is smart. She grasped the issues and she's a good listener and learner. Okay. That's terrific. I'm so good you came on. I am very concerned about this Taiwan situation, as you know, and you are too. And you're really, well, I don't have to tell you you're more than to think of it than anyone in America. That is the U.S. Commerce Secretary, General Muddah. Gene, it's just great to have you on the show. Thank you for calling it. Thank you for coming in. Really. Thanks, John. Appreciate it. Good to see you. Thank you. Thank you. All right. You got much more med, Maria. Don't miss my exclusive with the heads of Dow Hasbro. Plus, I'm sitting down first interview with cracker barrel CEO. Listen, this is a brand new story. Stay with Kramer. Don't miss a second of Mad Money. Follow @chimpcramer on X. Have a question? Tweet Kramer. #MadMensions. Send Jim an email to madmoney@cnbc.com. Or give us a call at 1-800-743-cnbc. Miss something? Head to madmoney.cnbc.com. Trading a Schwab is now powered by Ameritrade, bringing you an expanding library of education with even more ways to sharpen your trading skills. Access new online courses, insightful webcasts, articles, engaging videos and more, all curated just for traders. Plus, guided learning paths with content designed to fit your unique interests. No sifting to find exactly what you need, so you can spend your time learning to trade brilliantly. Learn more at Schwab.com/trading. At EverNorth Health Services, we believe costs shouldn't get in the way of life-changing care. And we're doing everything in our power to make it possible. 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That division was the big driver of this quarter. In response, Hasbro stock rally 3.5% today, but giving this already up more than 20% for the year, you might be wondering it's got still more room to run. So let's take a closer. This is exciting with Chris Cox. He's the CEO of Hasbro to find out what the Chicago's welcome to have money. Jim, thanks for having me. You know, Chris, it's been a long time. We had your predecessor on. He was a great man, did great things. This is a different company from that. So if you don't mind, if you can just give some of our viewers about a look at the, since the big transformation you've had since 2022, because this is a very different company from many people might be used to. Well, I think what's the same is we really care about play. We really care about bringing joy to consumers and we really care about bringing people together. I think the biggest changes you might see is the growth in our gaming business. We have one of the biggest gaming businesses on the planet, whether that's physical games or digital games. We're one of the biggest licensers in entertainment. We're the third biggest licenser in all of entertainment behind only Disney and Warner Bros. And we're the biggest in digital video games. And we're one of the largest toy companies with literally board games and toys found in almost every home across the US. Now, I think that I mentioned it to the office, because I'm a little older than you. I'm not a kid old. I'm sorry. We'll get to that in a second. But I ask people. Everyone is on the inside. Well, okay. Yes. I'm laughing on the inside about being a kid old. I do think that monopoly go is something that I guess I should have known about. Everyone has it. Everyone's downloaded. When I looked at it, I said, darn, this is really cool. Tell us about what is really a hundred million dollars just kind of fell into your lap, but not really, because you had the wisdom to know this was something big. Yeah. Well, we've been in digital licensing for decades. You know, when you think about all the projects that we have in the hopper on digital, there's over a hundred and fifty that are either active in the market or in development, which I think is a big reason why we're so big in the space. Monopoly goes, the latest collaboration we have with Scopely, which is one of the biggest and best mobile game developers and publishers on the planet. They've done games for us, for Scrabble as well as Yahtzee. And Monopoly go, I think, just really hit a chord with consumers. It's a really fun game. It's a ubiquitous brand. And I think the team at Scopely just did a terrific job really capturing that iconic play that Monopoly is known for. At the same time, a lot of the big retailers have told me that their toys are really a very bright spot. Now, people know these and apparently they're selling well. I mean, I'm talking about Furby, G.I. Joe Play-Doh. These are just iconic brands that keep making money. Yeah, they're great annuity businesses. You know, the funny thing about toys, the toys that stay the most similar are the ones that tend to do the best over time. The scent of Play-Doh is the same today as when we were kids back in the 70s and 80s. Well, I have to tell you that when I see some of these brands and I just think, you know what, I saw Transformers say there's another movie coming out. There's one last year, another business. You just keep making money off the Transformers franchise. Oh, yeah, that's fantastic. Really, that's the genius of my predecessor. Brian is, well, I set the Transformers to franchise apart with the first Transformers movie with Michael Bay and Steven Spielberg. And it's, you know, I think one of the top seven or eight blockbuster movie franchises of all time and literally just like separated that from just a mere kid's toy to truly a blockbuster franchise. All right, well, give us a little knowledge that you have from more than anyone, I think, of the whole world about Wizards of the Coast, Magic the Gathering. Some of these franchises that didn't exist when we were growing up that are now really bread and butter for you guys. Yeah, well, I'm lucky enough to have been a longtime fan of Wizards products. I started playing D&D when I was a kid back when I was 10 or 11 at my best friend's house. I started playing Magic when I was in college back in the mid-90s. And this is just a wonderful business. I mean, 40, 50% operating profit margins, huge fan bases, like tens of millions of people around the world, a play system that has literally over 20,000 cards associated with it. And it just keeps growing. It's grown from 14 out of the last 15 years. And just in the last four years alone, it's doubled in size. You can't say that about too many brands that have been around for over 35 years. Most things are down from then, unfortunately, because of 2019. But I do know that one thing that's happened is that people worry about the consumer. I'm not worried. I think we have a frugal, discerning consumer. And I think they think that your products represent great bargains because they're using, using, using, using, and you do have adults who age up. These are all things that have changed, haven't they? Yeah, you know, I think Hasbro is unique inside of the toy space and that 60% of our sales go to consumers over the age of 13. We're really positioned in where play is going. Whether it's aged up consumers and collectors, mega games like Magic the Gathering, or increasingly digital, which I think everyone is playing. Well, I've got to tell you, I think that these things have tremendous gross margins. And we didn't even mention theme parks. And I have to do that because I would partner with you if I were doing a theme park. Well, you'd have to get in line behind Universal Studios and Merlin Entertainment. But I think we'd be up for the Mad Money theme park. Just let us know which brands you want. I'm part of Universal. Maybe we can make it happen. Who knows? Anyway, synergies. Yes, why not? Chris, you've done a fantastic job. And I think it's very early on in the transformation. I want to thank Chris Cox, CEO of Hasbro. Really great to have you on the show. Thanks, Jim. Absolutely. We have money to back in for the break. Coming up. An old country chain going after a new look. Can Cracker Barrel serve hungry investors? Stick with Kramer. Shop the Sherwin-Williams 4-D Super Sale and get 40% off paints and stains from August 16th through the 19th. 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Back in May I answered a question about Cracker Barrel, country stores, off-highway restaurant chain, telling you I felt optimistic about the new CEO's turnaround efforts, but also wanting you to stay away from this talk because it seemed just like for a nasty dividend cut. Sure enough, a couple weeks later, Cracker Barrel slashes dividend by roughly 80%. They had telegraphed it, stock instantly lost to nearly 15% of its value, for spending the next two months trending lower. By the time it bought about about two weeks ago, this thing was down more than 30% from where I covered it in early May and down 50% for the year. So keep your bet on the shoulders, been the right call so far. But what about now? Cracker Barrel's gotten the dividend cut out of the way. We've learned more details about the turnaround plan. I think it's real. It includes a store modeling program and a menu refresh. Both have to be done. It's only 23 years to play out. That's emphasis. You've got to give them that time. The story doesn't mean the stock won't rally ahead of time, anticipation to come back, especially after this huge pullback. Don't take it from me. Let's go straight and source the very exciting for me. Julie Vasino, she's the new president and CEO of Cracker Barrel, Old Country Store, to learn more. This is welcome to my buddy. Thanks for having me, Jim. It's such a pleasure to be here. It's exciting that you're here because this is iconic. Everyone knows your chain. I have mine on Clinton in New Jersey '78. Really good one. All we know is that we want it preserved, but we also want it fixed. Difficult to do both, isn't it? It is. That's our goal. Our goal is to take what people love about Cracker Barrel and open the aperture a little bit so that more people love Cracker Barrel. So we want to appeal to all generations. Right now, the greatest turn I've seen in restaurants was Panera, where Ron Shake, legend early, said, "Listen, can't want to show. I thought it was going to cry." He said, "Look, my son said my place is a march, but I can't look at my own place." We're redoing everything. I kept begging him to tell me, "How's it going? How's it going?" He did a whole new redo. He went to Charlotte. You're doing something similar when it comes to your company. Yeah. Well, as you mentioned, we're in the beginning phases of our three-year plan. So, fiscal '25, which starts for us in a couple of weeks, is going to be an investment year. And we're investing around a couple of key pillars. So, one, as you mentioned, is the remodels. We've got four right now in Tennessee. Four different versions of it because we want to get the algorithm right for our shareholders. You guys help people with the algorithm is because they're not all in the game. Okay, we are spending different levels of money on those remodels to make sure that we can understand what level of investment is going to drive the right return. So, very, very important. So, we've got four remodels and I'm so excited to share that not only are sales and traffic up and all four of them, but people are loving them. So, not only are guests loving them, they're saying things like lighter, brighter, fresher. So, it feels like my cracker barrel. But they're also saying it's still the warm hospitality. It's still the food that I love. The decor is still on the walls. They love it. And our team members love them as well. So, we're super optimistic. So, you are. You're going all in in Indianapolis. Oh, so, yes. No, I'm allowed to. I check the notes. Plus, I've done my own work. Okay. I've got that. So, I go into a cracker barrel. Yep. And I see, well, I still see on my menu. You're meatloaf? Well, or my pie with vanilla ice cream on top. And, well, they still have that, that, that, that, okay. A slice of cheese, too. A slice of, well, you can put cheese on anything. I love people added to their eggs. Well, I know. It's just that when I went, they always looked at me. So, you could use a slice of cheese. I'm just saying is that same kind of like, you know, look, we'll play with it a little. Absolutely. I always love the fact that they would make the dish for you, even though it's on the menu. They'll still give you that. They'll still do that, absolutely. I mean, one of the, one of the things people love to order the most, doesn't make our operations team happy, but they like plain hash browns. We're known for our hash brown casserole, which is one of our signature delicious items, but we also sell plain hash browns, not on the menu. But you can get it. Now, you've done some, some testing of the menu in Texas. Can you give us a sense of how people's tastes have changed. I feel, I thought the cracker barrel did need to catch up a little bit, not just with this GOP dash. One thing, but it's not necessarily known for things that aren't fattening, but you know what? Cheesecake. Cheesecake factory has a lot of stuff that's not fattening. So, I mean, I figure you guys have room. Well, the menu innovation that we're focused on right now is really about things that we've heard from guests in the research for the last year. So we talked to people who love cracker barrel, people who've never been to cracker barrel. That's really the foundation of this plan that we put together. How do we make sure that we appeal to people who love us, because we want them to keep loving us, but how do we welcome even more people into the brand? So, we embarked on the largest menu test in the history of the brand, over 20 items, Jim. So, huge shout out to my ops team for learning those items, getting rid of some items and really welcoming them into the cracker barrel family. Some of them are such great successes that we're actually going to go ahead and launch them on August 6th, company-wide. Really? So, things like, yeah, we've got a delicious chicken and rice, we've got a wonderful savory pot roast dish, and then a signature hash brown casserole shepherd's pie riff on that hash brown casserole. Now, do I still want to walk through the merchandise and get through it? Of course, of course. And that still works, right? You've been able to keep the price points correct. Everything got so inflated in the last four years. Look, one of the things cracker barrel is known for is our great value. And all that research that we did to really build the plan, one of the things that resoundingly came back is people said, "You actually have great price points." And not only do you have great price points, but we get an abundance of great, delicious quality food for that price point. And that's actually the most important thing to them about cracker barrel. It's that quantity and quality of food at that great price point. You've been, in your period, we call it a great coaching tree. You've been at Yum, you've been Starbucks. These are a restaurant. Y'all had a big transformation. I mean, this is a gigantic transformation, and it is going to take time, right? I mean, we are not starting to look from numbers from you within the next six months that are going to surprise me. Yeah. No, we've been really clear, and thanks for bringing that up. It is a three-year plan. Fiscal 25, which starts for us in another week or two, is really an investment year. We've got five pillars in our plan. We're really bringing those together, starting to get those rocking and rolling. And then we'll start to see the benefits in the back half of our fiscal 26 and into 27. How much money do you have to spend on technology? I did think that cracker barrel hadn't kept up with a lot of the different things that people started doing about pick up and where were you there. That's a key pillar in our plan, Jamie. That's pillar four. We are really focused on making sure that we're taking the friction out of that to-go experience. About 20% of our business is to-go, and we can be so much better at that. We're working on missing item rates as well as the technology behind that. The other key part of that pillar is our digital and loyalty program rate. And for me, our loyalty program is off to a great start. I'm so excited about that, but I'm also even more excited about how we'll be able to use the data. To better market to our guests and really meet their needs. You did not have a loyalty program? We did not. How did you stay in business without a loyalty program? Everyone else got a loyalty program. You know from Starbucks, they got a few people in their loyalty program. That is a good loyalty program, yeah. But ours is great. No, it literally hasn't even been a year and we've got over 5 million people in the program. That's very good. Yeah, it really is. And so it just, it again, it just, this is a brand that people love, Jim. I have been so overwhelmed in the last year by how much people love Cracker Barrel. It's so rewarding to work on this brand and to really help usher in the next chapter of growth. Because 5 million people signing up in less than a year, we serve almost 200 million guests a year across our three day parts. I mean, it is, it is a brand that people love and I'm so excited to help it grow for the future. Well, I mean, they've got the right person, both from execution and enthusiasm. And I'm really thrilled that you came on. I'm showing you both both. Well, thanks for having me, Jim. Absolutely. That's really Lucino. You're going to be hearing her name many times. She's president of Cracker Barrel, CBRL. Remember what you said? It's going to take a while. Don't jump the gun. I did that with Panera. Ron Schake was furious at me. I say give her time. That's how the big money's made. May have money is back in for the break. Coming up, investors face headwinds a plenty. Global challenges in focus. Next. We've got a surprisingly strong gross domestic product number. It's just that the economy's holding up well, which is not necessarily what we want to see when everybody's hoping that the Fed's going to cut. But I think you get a better sense of the economy from great American industrial companies. Like Dow, the giant commodity chemical outfit they reported this morning. Dow delivered a top and bottom line miss. Net sales were down a little bit, 4% your rear. But the slight uptick in volume was overwhelmed by weaker pricing. Imagine it's mostly qualitative outlook for the rest of the year. Well, it's just say it made me feel that things are sluggish. But here's what did inspire confidence. Every Dow stock dropped roughly 5% at the open. A wave of buyers came in and the darn thing rebounded, finishing the day nearly flat. Now I'm wondering if all the bad news might be baked into the stock here in the low 50s. Let's check in with Jim Fertile. He's the chairman and CEO of Dow to get a better sense of the seemingly tough quarter and where the company's headed. Mr. Fertile, welcome back to Bad Money. Great to be with you, Jim. Thanks for having me on. Oh, I'm thrilled to have you, Jim. And one of the things that I thought happened today was the people are beginning to realize, you know what? If the Fed is coming to the rescue and we get cuts, then what you want is a quality industrial that has a very big dividend. And the Dow might be fitting the bill. Is that true, Pat, or is there more to it do you think? Well, I think we've got a lot of positive signs. As you mentioned, volume, we've seen in three of our leading growth businesses, our plastics and specialty packaging business, our silicones business, our industrial solutions business, very solid consecutive growth numbers. It is our third consecutive quarter of year over year volume growth. And when you look at the derivatives demand downstream, those numbers are in the four to seven percent range in those businesses. So that's good. I'd say the biggest drag on the quarter and the miss was on the basis of consumer durables and the housing market, which we know has been slow. And I think we need to see mortgage rates get to something with a five-handle on them so that we can see people being able to get mortgages and being able to move into that market. When that happens, the part of the business that's slow will pick up pretty quickly, both from construction and then all the knock-on effect from appliances, carpets and other things that go into the housing market. Can we get a good read from China from you because it seems like China, I don't know, maybe I'm a little optimistic, but it didn't seem like China's not getting worse with you, maybe getting a little bit better? I'd say for us, China has been good and in a couple of our businesses, China was up again this quarter, industrial solutions and coatings both saw strength there. Plastics was a little bit muted because pricing's come off there, so the volumes did not move as much into China. And China has been focused on obviously moving exports out of China, especially electric vehicles into Europe and into the U.S. and Canada before tariffs take hold, and that kind of clogged up the ports. I think we're working through that, but exports are flowing well from the U.S. Gulf Coast, and you know we're very cost-advantaged, so we continue to see a strong, cost-advantaged position, high operating rates, and good export markets from the U.S. For those who aren't that familiar, why don't you talk about what natural gas prices mean and the cost advantage versus the rest of the globe, because this sure didn't exist when you first got in this business. Well, natural gas and natural gas liquids are our main feedstock advantage, and when natural gas is production is up like it is today, almost 105 B.C.F. a day, more liquids get extracted, and that's the feedstock for us to convert to chemicals. Natural gas has been good, it's been a strong LNG export market because the world needs more reliable power and more reliable electricity, and natural gas is what they turn to, and the United States is a world leader in low-cost natural gas production. Canada also a very advantage position. When natural gas is low, obviously the frags spreads to get the ethane out or low, and the only thing that's been really causing some slowness there has been free-port LNG being out due to Hurricane barrel, but with that being gone, free-port LNG will come back and we'll start to see LNG moving around the world. Jim, you're the leader when it comes to a net-zero ethylene cracker, and for a disaster catch one, things you're trying to do to be able to make it so that we fight global warming, it's been ever since you took the job. Does it matter who's president, or is that just a mission that you feel, or your board feels is important, regardless of who has the White House? It's a no regrets move, it's definitely something that's going to continue to be driven by the consumers and by the brand owners. They're responding to the market needs, and the globe is pulling for that change as well. And both sides of the aisle, I think, are looking at how to deal with this issue, but also deal with it in a cost-effective manner. And the way we're doing it with circular hydrogen from our own production and being able to do it at the lowest possible cost makes this an early win for us when we start up in 2027. Now, I think what you're doing is quite elegant in how you're approaching. At the same time, if I were a shareholder, I said, "Look, why does he just cut that out and give me a big dividend boost?" Because the dividend has been the same. What do you say to a shareholder that says, "Look, I know I have a bond, but bonds don't raise their coupon, but Dow could." Yeah, what we're trying to do is bring our mid-cycle and our peak earnings up to the point that we can get into that position to do it. As we spun out from Dow to Pont, our big mantra was cash flow generation and being able to support that large dividend, we need to continue to build that capacity and plastics, get the margins in our silicon's business, bring those higher value industrial solutions products to light, and when we bring that floor EBITDA up and bring that mid-cycle from $9 billion up, then that's going to give us the capability to be able to do that dividend raise in the future. Well, when that happens in the Fed's cutting, your stock will be a rocket ship, I think, to go up very, very quickly. But Jim, thank you so much for coming on this show. To me, you're being paid away for the big term. Thank you. Thanks, Jim. That's Jim Finalees, the Chairman's sale of Dow Inc. It's a very big yield, and if you think the Fed's going to cut and the economy's going to come back and the mortgage rate's going down, well, I think you get a very big game that money's back after that. Coming up, you call the shots. A fast-fire lightning round is in the forecast. Next. It is time to start with a light round. I'm going to do a flexible round for those runners. I'm going to say in the name of the talk I told you about, but I'm going to tell you the story. I'm going to start with the horse guard. I'm going to say, I'm going to do it by myself. And then the lightning round is over. Are you ready? I'm going to start with the light round. I'm going to start with Joe New Jersey. Joe! Hello, Mr. Kramer. Thank you for taking my call, and I'd like the segment that you did on explaining cyclical and secular stocks. So I have them both in my portfolio. Excellent. That's what I want. I want diversity of growth and what its labor to. How can I help you now, Joe? What's going on? With Dell off its recent highs of 180, and with it being a great brand, is it a buy? Yes, absolutely. You know, I saw the stock today, and I told my officer that I cannot believe that this thing has given up to so many points. It is such a good company, even without most of this AI. So the answer is yes, Joe, you want to buy it. Edna in New York, Edna. Hi, Mr. Kramer. And say that sometimes we need to take the law. Is it now time to move on from five below? I am very mystified by five below. I don't know what happened there. I know there were many operational problems. CEO leaves. They don't really explain what's going on. And I got to tell you, I think that they rushed open stores until they get their act together. I have nothing good to say about them. Other than the fact that they are located in the building where my mom sold hats for lits. Let's go to Bill in Massachusetts, Bill. Jim Bull, a Boston bullion from your friend up here in New York. And you are my friend, Bill. And it's glad to have you on the show. How can I help you? Jim is a club member. You already prepped us a month ago about what was going to happen here. A healthy 10% collection. It's very good for the market. I feel at this point, I don't want to see a dog come bubble. So you're right. You're absolutely right, Bill. We want shake out. We want people to think it's easy money to go. We want people to start looking at the app. We want people to start looking at the app a bit so they haven't looked at it in a long time. How can I get a stock? Give me a stock. I got your toy order, my man. Look, I don't really want the auto stocks right here. I've got to tell you, they just become way too dicey. Prices are coming down. Let's say no to the autos. And other than GM, which continues my back stock. I don't regard Tesla as an auto company more now. I'm just calling it technology. And I like it for tech. Richard and Florida. Richard! Richard! This is Richard from Naples. I'd like your view on CrowdStrike. I think CrowdStrike is going to bottom here. I think they're 97% through this problem. George Kurtz is doing an admirable job. I don't want to write this company off Kurtz. It's too good. There I go. Tom in New York, Tom. Hey, Jim, what's going on, Tom? Hey, Jim. I've got a question for you on AT&T Networks. AT&T. Okay, it's network security. If you're going to network security, I'm still going to say Palo Alto. Palo Alto. And Palo Alto stock is not even up now since what happened with CrowdStrike. And yet they are chief rivals. That seems wrong to me. I know Sentinel's been the winner so far from that. But I like, I do like Palo Alto. Let's go to Jerry and Illinois, Jerry. Hello, Jimmy. Hey, love your energy and love the show. Trying to bring it every day. How can I help? All right, Jim. Hey, about 15 months ago, my son Nick opened a decent-sized position for us in three finders homes. D-U-H. Well, you know, it's kind of interesting. It's a single-family home. I like that business very much. You know, people really don't know the company. I think your kids got horse sense. And that, ladies and gentlemen, conclusion of the lightning round. The lightning round is sponsored by Charles Schwab. Coming up, how Ford lost its way. Kramer is devastated in Dearborn. Next. Ooh, yah, for the emperor of Cranberryka. Honorable Jay-Shake Kramer. You got me jumping around my office right now. Thank you so much for all you do for us. I enjoy your show in the kind of very entertaining and informative. I watched your first ever episode of Mad Money back in 2005, and I've been watching every single episode ever since. Don't miss mad money every night at 6 p.m. Eastern. Plus, join the CNBC Investing Club and stick with Kramer around the clock. This business is not about making friends. It's about making money. That's how I feel about the disaster that is Ford Motor, a company I've championed for ages. I'll be the first to admit I got it wrong. I kept thinking that this was a new fort, one that had put its warranty issues behind it, a Ford that could finally make money on every vehicle they manufacture. And what's happened? As of last night, it's clear that the warranty issues are very much a thing of the present, not the past. Still a major problem. The Ford is not making money on every vehicle, either they're being questioned in the EV category. All disappointing. Extremely disappointing. But you know what's really infuriating? Management clearly doesn't believe the stocks were buying here. And I know that because Ford's not willing to repurchase its own shares. They settle in the conference call that there are other things they'd rather put their money into. Oh, I guess it's an expensive stock. Excuse me? If your stock is one of the five lowest price journeys ratios in the SP500 like Ford and you don't want to buy it back aggressively, then I don't want to buy it either. In fact, I want to sell it. Sell it for my travel trust as soon as we're unrestricted. Many as soon as the rules say we can get rid of the darn thing. I can't hide my disappointment here about what I thought was a cheap stock, but obviously I was wrong because I couldn't have imagined a better investment than the stock at 12 bucks. My bad. You might ask yourself, is that too tough? Am I being too tough? No. Let me tell you something. I'm not. I'm not being tough at all. I'm being realistic. I want to make this clear. The problem with Ford is not that they let me down. That's a given. The problem is that I believe them. I trusted them. I wanted to trust. I was hopeful and had nothing to base that hope on because the company, well, they think they're doing well. When management's words don't match up with their actions, you should believe their actions. That I invested in Ford for my travel trust as an indictment, not a fan, but it's a me. Which brings me to the concept of culpability. Whenever this travel trust, the thing I run owns a stock that's down this big, I ask myself, how the heck did I believe? What was I doing wrong? What were the clues? What did I miss? With Ford, I blew it. And not just because the stock plunged 18 percent, 18 percent. 18 percent. This is very different from the recent declines to, say, alphabet or Nvidia. Both those stocks have had very big long-term winners. There have been huge winners for the trust. They're just being hit by a battle of profit-taking of incredible proportions. Nvidia, though, is still the second best performer in the SB500 for everything. Should I have known that alphabet would sell off on a big quarter? No, absolutely not. You know, why? Because the quarter was actually amazing. It's the rotation of crushed alphabet. The notion that YouTube was a shortfall is fatuous and printed in a huge number. Sellers just didn't want to see so much money spent on data centers. They didn't want to see so much money going into Nvidia, which is the expense of guts of the data center. But those stocks, they've been, they've been roaring for ages. They're winners. They can sell off and I can still hold my head high because they're still in huge winning positions for the challenge. Once I am proud of, and once I'm taking profits on it, on the way up, locking some big gains. But there's no such vindication for Ford, though. I screwed up. I made the mistake of buying this one. And now I'm mad as hell. I'm not going to take it anymore. Small solace to those who listen to me. And I feel that I should have known better. The answer is, they're right. I like to say this always in one market somewhere. I promise I'll find it just for you right here. And I'm in money. I'm Jim Kramer. See you next time. All opinions expressed by Jim Kramer on this podcast are solely Kramer's opinions and do not reflect the opinions of CNBC, NBC, Universal, or their parent company or affiliates, and may have been previously disseminated by Kramer on television, radio, internet, or another medium. You should not treat any opinion expressed by Jim Kramer as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. Kramer's opinions are based upon information he considers reliable, but neither CNBC nor its affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. 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