Listen to Jim Cramer’s personal guide through the confusing jungle of Wall Street investing, navigating through opportunities and pitfalls with one goal in mind - to help you make money.
Mad Money w/ Jim Cramer
Mad Money w/ Jim Cramer 7/16/24
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When you get these kind of rallies and you get them very rarely, it reminds you that you have to stay in this market to make big money. You can't flit in and flit out. When I say stay in, I mean that you have to be as invested as you possibly can be. So you don't miss monster moves, like the Russell 2000, 3.5% today. Well, we always talk about the Dow, which had its own explosion, up 743 points, to a new record, by the way. S&P 500, up 0.64, also new record. Now that's that up just 0.2%, thanks to being pulled down by the mega cap tax. But today's market is now being led by some real oddball stocks. It's definitely non-tax, a totally different kind of rally than what we're used to. We've very few people even seem to know about the leaders. Hey, and don't I know it. The biggest winners in the Russell today, since it's an amazing rally to be getting this week, are all companies I either don't know or that I barely heard of them. You know, I know thousands of stocks. How's this all possible? What happened to the Magnives in seven tax? Is it a breather or are they finished? Are we too overboard to get in now? This is too late. These are important questions we must solve right now. Let's unpack this move and make some sense of it. First, this is an all eccentric, amazing, really began to, when did this really start? It started when we got that cool consumer price index reading we got last Thursday. No inflation in the month of June. That's what triggered it. That's the first pop of the small cap rally. Most people are surprised to see that lowering of inflation could trigger a gigantic rally among so many small cap stocks. But when you take a look at the ones that are running almost all our biotechs, and by the way, almost all are losing money. If you look at the top 35 performers, all of which are up more than 35% since in a week, less than a week, including 11 that are up more than 50%. You'll see that roughly half our biotechs and healthcare companies almost all losing money. Conclusion. This is a market led by the most risky stocks, the Russell 2000 stocks. Specifically money losing companies that might be worth something years from now, but not at this moment. These are exactly the kind of stocks that only thrive when inflation is nil or we're facing deflation. After the CPI showed inflation on the ropes, it makes a ton of sense that these stocks would lead us higher. They're probably not done. Second, while the Russell 2000 may be leading us, there are a ton of stocks that represent what I call small and medium sized businesses. Now what are any smaller companies having common when I study them? I see many enterprises that benefit from lower interest rates, but I also just buy a list of names that have been left behind by the big capitalization stocks. I want to generalize for a moment. I think these stocks are rallying because there's a sense that Trump's gonna win the election and then that will mean a rollback in regulations. (dramatic music) The theory here is that the big cap alphas can easily negotiate the regulatory landscape, but the small, medium sized businesses, they can't. They don't have the money or the connections to fight back. What I want to embrace this thesis, look, it requires the Trump win, which is not assured, followed by a successful rollback of federal rules. Again, not a given, but I do believe that these smaller companies have been hamstrung by regulation that actually benefits the big dogs because they can handle all the red tape. Small and medium sized businesses do need to be unfettered for them to have a level playing field. You know what, this market's saying that will happen. Now third, we know from the legendary Larry Fink, the CEO of BlackRock, that investors increasingly want to take more risk because they're more optimistic about stocks, not about the country, about stocks. This view surprised me given the palpable sense of gloom in America, but the investor base sure isn't gloomy or they wouldn't be buying so many risky stocks or risky ETFs. The money is coming in from the sidelines, where it had been collecting very high interest, at least relative to the last couple of decades. But now the return you can get from cash isn't as attractive as what you can get from stocks or it certainly won't be. You're certainly going to use numbers stocks that rallied 348 Russell 2000, up 20% in the last five days, a staggering 1,262 stocks up 10% in that same period. (dramatic music) You can blame people seeking a better return than they can for a 5% annual payout that you can get from a significant deposit. Fourth, many of the stocks that are flying below the recently down out of home builder's fringes, the retail sectors, but they're starting to rally because mortgage rates are coming down. Or perhaps maybe because the retail sales report that we got this morning, that was pretty darn good. Even the home related and healthcare stocks in the Dow Jones industrial average were today. It's as if when we get the CPI reading, the Fed now has a green light to cut rates, maybe again and again. Which means you have no choice but to own that kind of stocks. More home related stocks could be even better, which makes sense because they're all playing catch up. Fifth, many of the biggest winners are companies that you might have expected to receive takeover bids under a different regulatory regime, one less hostile to mergers. But the Biden administration is most anti-takeover presidency in modern history and possibly all of history. Having studied antitrust closely since law school, that's actually a fairly easy statement for me to make. The smaller these companies are, the easier they are to buy. And you will absolutely get more deals if Trump wins the election. The big banks have hinted at the upcoming deal making on their earnings calls. With the rhetoric about how M&A is heating up on their very positive comfecles and that can drive a stock market higher. Six, there's a recognition that if Trump wins, again, taxes. Special taxes are really wealthy. The people mainly buy stocks are gonna come down. People want to get in ahead of that. Finally, seventh is about magnificence. More accurately, less than magnificent. We're seeing a wholesale route in big tech. These moments tend to be very self-fulfilling. People see a small cap rally. They know a big money can be made potentially overnight. Some of that money as I indicated can come from the sidelines but some is coming out of these big tech winners. I don't know if you could have this Russell 2000 rally without the ammunition provided by investors selling the big cap tax. Don't worry, the big cap tax aren't finished but they might be paused until the small caps finish playing catch up which could take some time. The biggest takeaway from this incredible rally, there were so many charlatans who said that you have to wait for a broadening out before you can buy stocks. I said over and over again that the market doesn't give you that kind of chance. It just happens too quickly. The window for eclectic gains like this one, since last Thursday, is incredibly small. It doesn't stay open for long. And now the stock market is extremely over bought. Much more than I like and it's a diceier time to get in. Much diceier than a week ago. I'm gonna make that point tomorrow at our investor club meeting. If you've been waiting for the market to broaden out, you most likely miss this mid-summer bounty. In the end, it doesn't matter if you think the rally's being caused by the possibility of a Trump presidency or the decline in inflation or the likelihood that the people start cutting rates. What matters most is that unless you're invested all the time instead of trading in and out and in and out, you'll miss these enormous moves. Bottom line, this shocking rally is why poor, the relentless emphasis on trading. (shouting) Believe me, those traders who left the market waiting for the broadening out more, they are licking their wounds right now because they know they miss what could be the easiest money that has been made in yours. The only way to pop up from rallies like this one is to own the darn stocks ahead of time. If they spent so long out of favor, you can't just get in and get out back on the dime. When we choose Jesus and liars can lay claim to staying out of small, medium-sized cap stocks for years and then jumping back in for business days ago. We're in Michigan, we're in. - Hi, Jim, thank you for taking my call. - Thank you for calling, William, let's take it. - With the recent pressure on enterprise software stock, as well as the recent security breaches for snowflake, I would like your thought. If you think the negativity is already priced in and if it's a good time to buy the stock. - You know, I thought, until I read more about the hack, I thought that maybe the negativity was priced in, but I have to tell you, the hack was a really bad one. And I say maybe you got to stay clear of snowflake forbid. I found it very curious, frankly. Let's go to bow in Florida, bow! - Madman, what's going on? - How much, what's shaking with you? - I am curious, retail sales look pretty good today. And I'm curious if you think it's time to start buying into Lulu lemons. - Oh, wow. Okay, Lulu lemons, wow, this thing is so damn. Now, we are so overwhelmed. We are plus eight on the S&P oscillator that I follow. I cannot count and it's buying Lulu on that. But I will tell you, it seems like it is found finally a base at 282. By the way, I'll give you a two for RH, seem to bottom today too. But I don't want to plow in because of how overbought and too excited this market is. Let's go to Tommy, my home stay in New Jersey. Tommy! - Hi Jimmy, is that Tommy from Lafayette? - Lafayette! - Love it, love it. - Thank you for all you do for us. - Oh, you're welcome, what's going on? - My mentor. Listen, Meta has been having some crazy times. They're getting an analyst, they're screaming 600, 620, and it's dropping. - Well, he's had such a run. Okay, so listen, Tommy, here's my thinking. Meta's gonna have to just mark some time. There's a July 29th meeting where Mark Zuckerberg is gonna sit down with Jensen Wong. Amazingly, in the same room, can you believe it? But I think the stock marks time has had such a big run. It's up 38% for the year. Let's give it a little rest, okay? Little R&R on Meta, that's what's needed. The biggest takeaway I can give you from this rally is that you have to stay invested all the time. If you try and trade in and out in and out all the time, you probably miss most of what is one of the most amazing moves of my lifetime. I'll make money tonight. With earnings and full swing, I'm testing my thesis on two big banks that I think could keep running higher. Don't miss my deep dive on these firms. Then, diversification is a staple, okay, Mark? Some of them are up the charts to see if a well-rounded portfolio is still the secret success of the long term. And later, it's Celsius, Lusius, energy with consumers. I don't know, I had six of them this morning. I didn't mind at all. I'm talking to Data Company, 100x, on some new research the company just published. So, stay with Kramer! Don't miss a second of Mad Money. Follow @chimcramer on X. Have a question? Tweet Kramer. #MadMensions. Send them an email to madmoney@cnbc.com or give us a call at 1-800-743-cnbc. Miss something, head to madmoney.cnbc.com. When you're hiring, the best way to search for a candidate isn't to search at all. Don't search, match. With Indeed, Indeed is your matching and hiring platform with over 350 million global monthly visitors according to Indeed Data, and a matching engine that helps you find quality candidates fast. Use Indeed for scheduling, screening, and messaging to connect with candidates faster. Plus, 93% of employers agree Indeed delivers the highest quality matches compared to other job sites according to a recent Indeed survey, leveraging over 140 million qualifications and preferences every day. Indeed's matching engine is constantly learning from your preferences. Join more than 3 and 1/2 million businesses worldwide that use Indeed. listeners of this show will get a $75 sponsor job credit to get your jobs more visibility at indeed.com/madmoney. 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And the byproduct of the merger is the new delicious Jiff Peanut Butter and Chocolate Flavored Spread. I got the press release and get this. Critics tried to say it creates a monopoly on cravability. But obviously, it's not illegal to be irresistible. Calling it now, this will revolutionize the snack industry and the contents of my pantry. Visit pbcincorporated.com to try the flavor merger of the Century, Jiff PBC. All year I've been telling you that the sweet spot in banking is now investment banking. And the major banks, the two with the most exposure, are Goldman Sachs and to a lesser extent Morgan Stanley. Without major consumer banking operations, these two companies are less hostage to the shifting winds of interest rates and more dependent on the gradual ramp of the capital markets, which is exactly what we've been seeing. So every Goldman Sachs report yesterday morning, Morgan Stanley reported today before the open. How's the thesis holding up? What have we learned from the investment banks? All right, let's go chronologically starting with Goldman. They turn him what I describe as a good, solid report, a top and bottom line beat that was strong enough to send the stock up over $12 from really 2.6% on Monday, toward Dr. Philip 2.19% today, getting new all-time highs in the process. Wow. Although some of that likely comes from the new consensus that we're headed for a second Trump presidency with a lot less onerous regulation expected for all the banks, including investment banks. So Goldman's numbers were, they were excellent, 14% revenue growth, two major segment speed expectations. Global banking and markets of 14% asset wealth management of 27%, that really shocked me, it was so good. Within global, remember, I did work there and that just spectacular numbers. Within global banking and markets, which is a poor business, Goldman's fixed income currency and commodities trading division, that's called FIC, was up 70% equity trading up 7%. The only miss within global banking and markets was the investment banking business, which actually put up 21% revenue growth, but still came in shy of expectations. Within investment banking, debt underwriting was up astonishing 30% equity underwriting up 25%. They were both above expectations, but the financial advisor business came in a weaker. Only up 7, that I didn't understand. So this was a good quarter, but I know it could have been even better. Now, I've learned through my reporting that Goldman was involved in two major M&A deals like a little delayed, moving from the second quarter to the third quarter. They were advising Six Flags and the Six Flags Cedar Fair merger, and they were advising West Rock and it sailed a smurf and Kappa. Both these deals closed earlier this month, just after the quarter was over. So even the one small issue with the quarter, the financial advisory business miss, was only a problem because their M&A division, so a couple of major deals slipped to the next quarter. Hey, $1, I'm gonna make it up next, or any season. How about expense control? Not perfect, pretty good. They've made still some strides here versus last year, and with such a large revenue beat, Goldman was able to deliver 31 cent earnings speed, off of 8,000, 31 cent basis. That's 180 percent earnings growth year over year. So great overall numbers from Goldman, but even better, the forward-looking metrics and comments from management inspired a lot of confidence, especially for the company's bread and butter investment, banking and sales and trading businesses. One of the coffee school yesterday morning, CEO David Saltman, who's rapidly turning into a hero for this franchise, said the Goldman investment banking backlog had increased significantly, his word not mine, in the quarter, and described the capital markets in M&A recovery as, "In the early innings." I used to call this company Gold and Slacks insurance, feel like it deserves that, Nick Nivian. Plus, even with the stock hitting new highs right now, it sells for less than 14 times earnings, this year's earnings estimates, roughly 12 times the extra numbers. That is not expensive by any stretch of the imagination. How is it a pleasure? It's a buy. So what about travel trust holding Morgan Stanley? At their point this morning, they had also turned it in a clean top and bottom line beat with 12% revenue. We're not bad. There are two asset management businesses, investment management from social clients, a wealth management for individual clients, grew by 8% and 2% respectively, that wealth management falling a little short of expectations, thanks to lower than expected interest income, but it wasn't good enough. In plain English, Morgan Stanley's wealth management clients kept less cash at the bank because they could get higher rates elsewhere. That's one reason these guys could benefit from a September rate cut. They've become, in my mind, like Wells Fargo, the two big beneficiaries if we start seeing fed rate cuts. Other than that mild wealth management shortfall, Morgan Stanley had $7.2 trillion in total client assets, puts them well in their way to their goal of 10 trillion. By the way, BlackRock has 10 trillion, and they're unassailable. But no one's worried about the light wealth management number today because Morgan Stanley's the other division in social securities, which houses their investment banking and sales and trading businesses, that performed much better than expected. In social security segment had 23% revenue growth. It's three divisions coming up, a head of expectations too. That's when banking up a staggering 51%. I have no idea how they got that number. Equity trading up 18%, fixed income trading up 16% really terrific. Now, Morgan Stanley also did a phenomenal job of controlling costs, which at them translate their better than expected revenues into an impressive 17 cent earning speed off $1.65 basis. Their return on tangible common equity really boring, but does matter, keep up really metric, came in at 17.5%. Wall Street was only looking for 15.8%. - 5.5. - As investing club members know, and remember we do have a meeting tomorrow at noon, I've been a bit frustrated by Morgan Stanley's slow start to the year. As new CEO Ted Pick found his sea legs, investors figured out what to do with the stock amid a shifting interest rate environment. While Morgan Stanley's less dependent on the direction of an interest rates than the big money center banks, it's still some exposure because of the sprawling wealth management business. But the stock's been coming along nicely these past few months. It's quite from mid 80s and mid April to more than a two year high of 109 earlier today, though the stock pulled back from this level, just to close it, $106.22. That's up 0.91% for the day. Remember made the pit stop at one or not, but it also traded as low as 102 before the coffee school got pretty darn bullish about equity's M&A and the future. Basically, after some of the noise and choppy trading earlier this year, Morgan Stanley's finally trading like I thought it when we bought it for the trust. The bull faces is at last working. I'm not too concerned about the miss from wealth management because it was interest rate related. I believe Richard had it lower. Now, that was really the only hair on this one. I still think it's early days from Morgan Stanley's institutional security business with the firm CFO. Sharon Yashaya is saying that, and I'm gonna quote here, investment banking pipelines are healthy and diverse. Dialogues are active and markets are open. Sounds good to me. Despite the stock's run from mid 80s to the triple digits over the past three months, Morgan Stanley still trades at around 15.5 times this year's early assessments, 14 times next year's numbers, and it's got a 3.4% yield. That yield, of course, will only look more attractive as rates come down. So we don't see any reason to back away from it, bullish stance on Morgan Stanley, the triple trust, and I'll reiterate that at tomorrow's meeting. Here's the bottom line. The investment banking business, it looks good. The banks, Goldman Sachs, and Morgan Stanley have been a great place for investors to be in 2024. As capital markets activity gradually comes back, although now it's feeling a lot less gradual, isn't it? And based on what we've seen over the past two days, I bet both stocks have maybe a lot more room to run. All aboard! Bit of money's back in through the break. Coming up are the big funds in big trouble. Kramer goes off the charts for a read of the averages next. 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. Behavioral health solutions that also keep your projections at their best, it's possible. Pharmacy benefits that benefit your bottom line, it's possible. Complex specialty care that cares about your ROI. It's possible. Because we're already doing it. All while saving businesses billions. That's wonder made possible. Learn more at EverNorth.com/wonder. Imagine earning a degree that prepares you with real skills for the real world. Capella University's programs teach skills relevant to your career so you can apply what you learn right away. Learn how Capella can make a difference in your life at Capella.edu. The most difficult thing about this market is that until the last few days, investors keep getting punished for being diversified. Even though we know that's the safest strategy long-term, we saw that today as the Laidon Dow Jones and Josh Flowers came back. Right now, the SP500 and the NASDAQ 100 are both at all-time highs. But many diversified portfolios are doing far worse. Take the Vanguard Target dated 2030 fund, which is designed for those looking to retire around 2030. Automated portfolio classically reverse fund. Yet its net asset value per share is still down roughly 15% from the peak in 2021. Some of that's because there's nearly 40% bonds. And if you own bonds when the Fed started tightening in 2022, you got to obliterate it. So much because this has been a narrow bull market with strength concentrated in the Magnificent Seven, and not the border market, at least until the last few days. So what happens when tried and true diversification causes so many people to get left behind year after year? Well, those who chase outside risk are rewarded handsomely. Well, frankly, nothing good. That's why we're going off the charts with the help of a dispassioned person, Carly Garner. She's a terrific technician. She's the co-founder of the Carly Trading, the author of higher probability commodity trading, and some with an excellent track record, including calls she's made on the show. Garner says we're playing a dangerous game of musical chairs in this market. Nobody knows when or where the musical stops, but it'll stop abruptly, and not everyone gets a chair. Now, I need to make clear. Very clear, okay? Especially those who blog or tweet about the show. I am not an agreement, not an agreement with Garner. I feel more constructive about this market. But on "Man Money," I like to present alternative views to show you the other side of the trade, especially when they come from people I respect. It can be very eye-opening. Garner thinks history is repeating itself here. I don't think we're going through another dot-com bubble. There are real differences. But the concentration of winners in one area does feel very similar. Back then, you could clean up by just going all in on a handful of risky tech stocks and just sticking with them. The best performing mutual funds abandoned the very idea of diversification. Then the dot-com bubble collapsed, and anyone who tried to ride it out got obliterated. They pretty much never came back. As Garner puts it, you can absolutely get rich by taking excessive risk. But going all in on a single sector, staying rich with that approach in different story. Now, I agree with her on diversification, but I think she's wrong about the state of the market. Still, with that in mind, what does she see in the E-mini S&P 500 futures? Take a look at the monthly chart here. For those of you who keep in score, while so many commentators were pounding the table coin for recession and lower stock price leisure, Garner told us that the S&P 500 could break out above 5150, including right here on Mad Money. At that time, that seemed like an extremely bullish call. I remember, but in retrospect, Garner thinks she was way too conservative. Not only have we blown through that level, she thinks the chart has opened up to the possibility of the S&P reaching 6150. That's up nearly 500 points from the record, which we created today. And this is a very big one. If you want to chase after these 500 points right here, Garner believes you will be taking you in double, maybe triple the risk versus what we experienced from the last 500 points. Yet, even though we've had an epic run here, she's now picking up some warning signs that make her feel substantially less bullish. Garner points out that there's been a persistent divergence between the S&P 500, this, and the relative strength index, the RSI. That's an important momentum indicator. When the S&P peaked in early 2018, so you can go back to where we were, right here when it peaked, the RSI stood at nearly 88, perhaps the highest over what we'd ever produced for the S&P futures. Back then, the S&P 500 topped out at near 280. And if we ever see that level again, oh boy, I'm sure you need to take away the ties to the shoelace. It's half of Wall Streetville's suicide watch. That was only six and a half years ago, though. We've almost doubled from the 2018 high until today. Here's what Garner finds worrisome. Since 2018, the S&P has made a series of smithly higher highs, but the relative strength index, the RSI, has never gotten as overboard as it was in 2018. It keeps making lower highs. The RSI made a lower high at the peak in 2021 and is making another lower high right now. The problem with that is that these RSI divergences are often a sign of imminent reversals, especially when you're in a rally that's already overextended. In Garner's view, heavy government stimulus isn't able to stock marketing trade well beyond its customary and reasonable trajectory. Look at the blue lines in the chart. Excuse me. They represent what she thinks would have been the historically average trading range for the market in a world where the Fed hadn't massively increased the money supply. Without that stimulus, Garner thinks the S&P will be bouncing somewhere around, say, 4,750 and 3,500. So she thinks it will be all the way down here. When you see we're all the way up here, she thinks we're all down there. She recognizes that nobody wants to hear this, but the only way to normalize the market is either through the passage of time, something that she says will take years, not weeks or months, or through a nasty sell-off. Hey, maybe a little bit of both. If history's any guy, Garner thinks the market either needs to trade sideways for several years, or the S&P needs to lose about 1,000 points before we get back to normal. Look, Garner could be right, but I'm much more inclined to believe that there is no normal to go back to. Both presidential candidates have embraced a more active role for the government in managing or protecting the economy. Even if they come at very different angles, Biden's Mr. stimulus to be imminent. And as for Trump, I mean, do you really think he'd do nothing if he's holding averages swooning? All right, next up, let's check out the monthly chart of the E-mini Nasdaq 100 futures. From Nasdaq 100, we know tech heavy, right? Once again, Garner believes the Nasdaq 100 is coming in too hot. It's been a decade gaining 7,000 points. Okay, so a decade getting to here, all right? And then, whoosh, managed to put on together 10,000 point rally in just 20 months on the heels, again, of massive COVID stimulus this time. And yes, the Fed's still easy money policies. Then after tech pulled back hard in 2022 and 2023, as the Fed raised interest rates, what happened? We got another parabolic style rally. This time fueled by tales of artificial intelligence. That's the last bit. So this is the COVID stimulus, and then this is the AI trade. This time the Nasdaq 100 gained 10,500 points in just 21 months. Wow. Whether we're talking scale or duration, Garner knows that this is almost exactly the same as the rally that ended when the Fed declared war on inflation in 2021. And we remember how bad that was. Can the Nasdaq 100 keep running? Sure, but Garner thinks it's unlikely to be sustainable. Like the SMB 500 charts, she sees an RSI divergence in the Nasdaq 100. Here we go again. This red flag can be waived for months before consequences arrive, but they always come. In her view, the tech heavy index is overbought and likely do. Repeat that. Now, it is hard to describe this as not being overbought, isn't it? I mean, look at that. That is pretty much parabolic, and I'm nervous about that. I'm concerned about it, not nervous. As Garner sees that volatility is historically low, and the indices are already at all-time highs, so there's never been a better time to hedge your bets, take a little off. In the end, it's not that she thinks a sell-off is imminent, but that this is a market with much worse risk of war than it even had a few months ago before it went on this tremendous tear. Here's the bottom line. The charts is interpreted by Carly Garner. This might be the moment to pull in your horns in the SP500 and the Nasdaq 100. Now, we've had huge gains, concentrating a pretty small number of stocks into the last few days, and Garner doesn't like what the charts are saying about the sustainability of these moves. Doesn't mean the whole edifice will collapse, but it's certainly a good reason to stick with diversification, rather than putting all your money into the magnificent seven as they come down. I think they're worth owning some, not all, absolutely not with your entire portfolio. Let's take some calls. Let's start with John and Dan and John. Thank you for taking my call, Jim. Can you hear me? John? John, Indiana? Yes, John. Yes, Jim. Can you hear me? Yes, it's John? Yes, it is. Thank you for taking my call. Of course. How can I help you? So, I have a question. In 2021, I bought some PayPal when it was climbing in near 200, and then shortly thereafter there was that what they called, I believe, a correction where it dropped a large amount, and I've been holding on to it since then, and, you know, hoping that it would come back up, but, you know, it hasn't. So, my question for you is, would you just sell it, and should I cut my losses, or hold on to it, or would this be fine? Okay. Look, this is a great question, John. I would tell you that listening, if you're listening to Bank of America's Brian Winnie, and today I found myself thinking, "Why do I need PayPal?" Because Bank of America does the same thing with its different methods of artificial intelligence, and certainly with its systems to move money around. So, I am going to say, I would sell PayPal, because even though I like this fellow Alex Chris, the CEO, I would sell PayPal, and I would even buy Bank of America if you were similarly inclined to buy another stock. The charge to the SP500 and NASDAQ is determined by Carly Garner. So, just, it's time to take some chips off the table. We've had a huge run here up to this point, and Garner isn't too optimistic about this rally's sustainability. We got a lot more money, but it could include my exclusive to 100x. I'm catching up with some of the company's latest consumer data, including some important intel on dominoes. Plus, we're getting some mixed signals in the macro, aren't we? So, what am I looking at for a property of the situation? I'll give you my take. And all your calls, rapid fire tonight's edition of The Lightning Round. So, stay with Cramer. Right now virtually every consumer-oriented business is trying to retain customers, laughing at better value, because if you keep your prices high in this environment, you're being punished. Blue's actually pulled it off. Find out. We're checking in again with 100x, the alternative data firm that recently came under a radar. I like them. They've got the latest customer insights, including fresh data from last month. Of course, these guys aren't stock pickers, but they're very good listeners, and their focus on purchasing tent can show us what people actually plan to buy in in your future. Oh, and by the way, they provide funding for nonprofits when their supporters provide the data. Maybe that's why I like them so much too. So, let's welcome Rob Pace, who's the founder and CEO of 100x, to get his company's latest insights from the consumer source data. Mr. Pace, welcome back to Bay of Money. Yeah, thank you. You know, once again, you have tremendous insights, and you're involved with some intent purchasing for pizza, which is a category that we have loved. So, tell us what you come up with, Rob. Yeah, so if you step back, your central thesis of consumers being very focused on value is what we're seeing in our data. And our future purchase intent for pizza is at two year highs, and that's led by Domino's right now. Now, Domino's is the cheapest, and it's also the one that brings it to you, but what are your people saying about the taste? Well, that's always been their Achilles heel in our data, but they've closed the gap. You know, they introduced a number of new products, and we're seeing that in our data. And so, from a value standpoint, consumers are saying the rest of Quick Fast Casual has seen their pricing sentiment decline ten points. Pizza has stayed flat, and Domino's has addressed the taste issue, so that's why it's one of our top companies in terms of future purchase intent. Okay, let's stick with that theme, because you've done work on wireless. Now, I can tell you that anecdotally, I like Verizon Wireless, it's terrific, but it's expensive. But empirically, we're getting different data from you. Yeah, if you think about the three big carriers, right, the we see T-Mobile actually breaking to the upside versus AT&T and Verizon, and you're exactly right. Verizon scores better in terms of network quality and coverage, but T-Mobile is good enough, and on plan options, on value, on pricing, they're 20 points higher. So the consumer's saying it's good enough for the product, and I can save money. Yep, I like to look at your stuff. Your stuff is just so good for me. I get very excited about it. And I've been trying to figure out, hey, listen, Verizon Wireless is really terrific, but this T-Mobile stock, now that's not your job, that's my job, has been on fire. And then I realized that a frugal consumer might just say, you know what, I don't need perfect wireless. I need wireless that works, and I want to save some money. That's why I think the stock's going up. Now, let's go to something that I think was pretty shocking. I go on Amazon, I see Celsius. We're big trickers, Celsius. Something I see at these cheaper prices, Costco, I see these cheaper prices. Then I read that, you know, maybe the sales, or maybe this data was going to get salesmen not be good, but I was blown away when I saw your purchase intent. Yeah, unfortunately our purchase intent for Celsius has declined 15%, which is a very large move in our data over the last year, in the last three months, 10%. And what's going on, and that is index versus, say, other sodas, and the energy drinks, et cetera, is historically they had a huge perceived advantage around healthiness, around ingredients, like 50, 60 points higher. Yes. And we're seeing that come down in other 20, 30 points. Hold on, let me understand this. The wrap on Celsius was, listen, it's good and good for you. Right. Are people starting to believe that maybe the good for you wrap may not be any better than some of these other drinks? Yeah, that's what we're seeing in our data. And we're seeing, you know, the comments are about caffeine and the ingredients, et cetera. So historically, that was their edge, is it gave you energy and was healthy? And we're seeing a pretty significant erosion of that that's playing through into future purchase intent. Wow. That explains why the stock may not be done going down. I was hoping that PepsiCo might want to buy the rest. They have a stake, but they see the data like you do. Okay. So they're not, actually you see the data but probably before they do because you're doing right at the purchase intent moment. One of my absolute favorite stocks has been Pinterest because I think that that's a place that you can reach a lot of people in a non-combat of setting where advertisers can say, "You know what? I want hobbyists. I want people who are just kind of making their decisions about certain products early on and going right through." It sounds like that you're seeing similar, maybe even better work on Pinterest. Yeah, Pinterest again is one of those, one of those names that's breaking to the upside. And you're exactly right. People go to Pinterest to discover things, but they also have a very good navigation, a very good app. Better and better. Yes. In, you know, Reddit might be the exact opposite of that where they get good content, but it's hard to find. But what's fascinating to me on Pinterest is it's the first example that we can really focus on where their AI-related products, collage, where they allow you to kind of take pins and put it together, where we're actually seeing that have an impact. And ultimately for AI, in our opinion, to be hugely successful, you're going to have to see the applications, and this is one of the early winners of the applications that we say. Okay, so right, just because I am so enthralled with your model, which is not just the model, I'm going to make a lot of money, maybe one day give it away. You're making money for charities right now. How would you have gotten that Pinterest data, and then how would you give, how would you make the international? Yeah, so right now we're running 100 programs around the country, and it's very diverse. And what the nonprofits do is they say, hey, there's this crazy company, 100x, it's raised a lot of money, and they're going to give us money to fund our new medical researcher, or our kids' band room, or whatever it is. If you all sign up and just tell the truth about the brands you use, who matters to you, and importantly, are you going to use them in the future? So every hour we're giving away thousands of dollars to charity, and we feel like the product's better because of it. How can you beat data where people know that they're giving away money to their causes? That is a terrific model. You are very smart, my friend. That is Rob Basie, the founder and CEO of 100x. I hope yours turned on by the state as I am. It's how we, you and I can make some money by listening to the purchase intent. They have money, it's back into the brand. Coming up, pop open those umbrellas and tee up your toughest questions. Kramer takes on all comers in the lightning round. Next. Next. It is time to start with the light round. Cause we're rock, roll, country, say the name. It's not going to tell about by itself. It's just good and the whole stock question is, tell me my step first is where to play this out. (buzzer) And then the lightning round is over. Are you ready, ski? Dang, come to the light round, come to the light round. Let's start with Kimberlin in New Jersey. Carolyn. Hey, Tim. Booyah. First, first, first, first, I'm going to call it. And I'm actually calling in regarding my daughter's portfolio. So, we opted to not do a 529 plan and we have a portfolio for her. And she's going into 9th grade and we want to maximize her investment. So, we're looking to add a side of security stock. And I've been back researching all of the above, like, Palo Alto. Crowds, trike and then 4th net. So, I want to get you a take on 4th. Well, I think 4th net is not my favorite. Palo Alto is, we enter for the travel trust. We'll be going over tomorrow. And I think it is at the club meeting and I really like its prospects. Let's go to Mary in New York, Mary. Hi, Tim. I'm in a women's investment club called stock and bonding. And one of our investments is air product and chemical. We chose this because it provides crucial gases and chemicals for industrial use. But even with these very important products, the stock is not appreciated and hoped for. Should we hold us now? And, could you comment on the sale of their liquefied natural gas division to Honeywell? Well, I'll tell you right now. Honeywell got the better end of that deal. Honeywell did terrific on that. And you really don't want to be in air products. You want to be in Lindy. Lindy's a much better run company and that's why our product isn't doing as well. And Lindy's doing spectacularly. Let's go to Ian in California, Ian. Hey, Jim. Ian here from California. Excellent. I'm Walter, first time caller. The reptile. Gotta do something for the boys. Now, look, I think Sorepta is a speculative situation where they have great science. I am never going to bet against a biotech company with great science. Therefore, I bless owning the stock. It's too risky for me, but it's okay if you want to be there. How about Jeff in Massachusetts, Jeff? Jimmy here. What's up, brother? Matt. I'm terrible. Been stuck in a hole for a while with it. Should I tell it? What do you think? No, no. Don't sell Matt. You just got a very, very smart investor in there. You got Starboard. There's been other activists there too. And I think the Starboard letter, which I read this morning, is superb. And Matt has to make the changes that Starboard recommends. Let's go to Marty and Connecticut. Marty. So, we all thank Jim in greeting some new Haven in Connecticut, the pizza capital of the world. I didn't know that. I learned something every night here. What's going on? We want to know about B.J. Holeshales. In multiple positions. B.J. Holeshales. Very good. My problem is why would I want the very good when I can get the best, which, of course, is Costco. I was listening to Charlie Munger being at the late trial. I'm going to be interviewed by Becky Quick about Costco. It made me feel so good about the situation in those stockers running great deal. Let's go to Rob in Ohio, Rob. Bullion Kramer from the heart of it all. And Beltsownton, Ohio. I knew that that was the heart of it. I just had that feeling. Yeah. Jimmy, I bought my first take at $27 a share in 2022 after your IPO bombed. I've been doubled down with your boy, Josh Brown in July of 2023 and $26 a share. Thinking the brown booze was the saving grace I've been holding out for. Help me, man. You're my only hoe. Picker. P-O-S-T. Holes is fine. I remember when downtown made that call. And then the stock went down. He just stuck with it, which was very, very right. Now the problem with that is that you are investing in retail by doing that. And I do not want to be as exposed to retail right now. And so that's the only reason why I do not want to own the stock of toast. Now we're going to Rick and Beltsownton, and please, Rick. Yeah. I was wondering what you think about a pharmaceutical stock called Kevin? Well, I look, Kevin's okay. I like the, there's a very low multiple, which is exciting. But what I really like is the best. I like best of best. I like best of breed. That means I like E-L-I-L-I. I need you to go to Paul and Virginia, Paul. Hey, Jim. How you doing? Good. How about you? I'm good. So I'm originally a New Yorker. So how are you doing? Well, yeah, that's how we talk. I mean, talk like that and throw it off you too, but we can't pronounce it. We're talking. Good. Okay. And my wife and I just got back from a cruise, and I was so impressed with the ship and the crew and the experience that I opened a small position in this company. Yeah, they don't compete with the monster mega ships. They're smaller ships. They target 55 and older clients, kind of affluent, you know, that aren't looking for floating game shows and casinos. They do river ocean and expeditions, and it seems to me they're killing it. You know, their ships are going out full. They're fleet is expanding and I'm talking about biking. V.I.K. I agree with you. I think biking is driven. I would put Royal Caribbean in biking at the top of the heap. They are both excellent. And that, ladies and gentlemen's conclusion of the lightning round. The lightning round is sponsored by Charles Schwab. It's very out of whack here. We're just going through the most difficult strenuous rate cycle in the history of the Federal Reserve. And what do we have? How about incredibly well unemployment? How about bank after bank today? Noting that credit defaults are either low or totally under control. How about commercial real estate actually being attractive as investment in some cities? How about the stock market getting record high of the record high? So what's with the incredible sense of gloom it seems to surround everyone I meet? How can the negativity, the pest will be so thick that you can cut it with a knife? This explains this extraordinary despairing inclusion of two worlds, one lacking in hope and the other so hopeful that it truly feels like we're in the good old days. When I serve in this situation, I come back with two very different theories. The first is that inflation, very swiftly, the supermarket inflation has really put people in a very bad way. Wages may be solid and jobs may be plentiful, but when you go grocery shopping, you're stunned by the prices. You simply can't believe that they haven't come back down one bit since COVID. The grocery prices are the reality of the moment, not the default rates of the profits of commercial real estate or the stock market in new highs, which feel totally divorced from day to day lives of Americans. It's true. The grocery store aisles are so out of whack that you have to answer yourself. Is there a law which says that packaged goods companies aren't allowed to cut prices? It sure feels that way. If it weren't for Costco's Kirkland signature brand premium private label or Walmart's great value brand, this new better goods brand, which I really like, you think that we're still in the midst of the pandemic where raw costs soared and supply chains were completely crushed. We're beginning to see some revolt by the consumer, but nothing like what you'd expect. Instead, people just seem to be resigned to price gouging. We feel like we're back at that Jimmy Carter here, where the president endlessly talked about how the country was filled with discouraged people and part because of the inflation at that point at the gas pump. That talk that dubbed the moi les speech, even though he never used that term, resonates more now than it did back when Carter spoke about it in July of '79. Never mind that inflation is cooled down to the point where the Fed can probably start cutting rates in September. We're in much better shape than back then, but it somehow feels worse. The second theory, how about politics? Soon after Carter gave that speech, his Republican opponent offered a different message, one of hope and unity. Reagan beat the incumbent president in a landslide. After an initially very rocky period, as the Fed ruthlessly raised rates to beat inflation, we had to sustain advance in hiring in the starters of the greatest bull market in the district. Now, we have an election filled with hatred and rank or devoid of the genial positives that made Reagan so popular. When you have this kind of anger and ugliness in Washington, you could face every aspect of our lives. Everything positive, which means like nothing more than abstraction. I know that Trump said he will allow Jerome Poutis to serve out his term at the Fed, which runs through 2028. Said that in an interview this evening. He's considering JP Morgan CEO, Jamie Diamond, his treasury secretary. Jamie's a centrist. Good matter. Good cool things. But the hatred, the fighting, the craziness, it sure is to die down or we will all be pessimists eventually. I know where there's sustained optimism, though, right here in this room, Wall Street, where profits are leading to ever higher prices for so many stocks of what you can own. The market, which reflects the reality of the economy, is benefiting plenty of people, but not nearly enough to change the mood of the nation because they're not enough investors. Look, I'm not a political guy, but I can praise capitalism as an engine for wealth creation. As Biden went in, the CEO of Bank of America said this morning when I interviewed him, it's just a shame that so few people care and so few people are combating inflation by investing in American business, which knows nothing about them unless and everything about opportunity for all, including those who think they can't afford it so they don't even bother to try. I'd like to say this always. It's one market somewhere. I promise trying to find it just for you right here amid money. I'm Jim Kramer. See you tomorrow. Last call starts now. 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. 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