Mad Money w/ Jim Cramer 11/19/24

Summary

Mad Money w/ Jim Cramer – Episode Summary (11/19/24)

Release Date: November 20, 2024

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1. Market Reaction to Geopolitical Tensions

Jim Cramer opens the episode by dissecting the stock market's reaction to geopolitical tensions, specifically focusing on Russia’s military maneuvers and the ensuing investor behavior. He explains how fears of escalation, such as nuclear threats, trigger a "flight to quality," where investors move their money into safer assets like Treasuries.

“When long rates go up, you're supposed to buy tech... You’re going to buy tech.”
— Jim Cramer (02:15)

Cramer highlights that despite initial panic leading to a dip in the Dow by 121 points, the S&P advanced by 0.4% and the Nasdaq gained 1.04% as traders adjusted their positions when the anticipated threats didn’t materialize.

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2. Retail Sector Spotlight: Wal-Mart's Strategic Rollbacks

A significant portion of the discussion centers on Wal-Mart’s exceptional quarterly performance. Cramer attributes their success to strategic price rollbacks across 6,000 items, including 3,000 in groceries, effectively enhancing value for consumers.

“Wal Mart's got more food that's high quality, under five bucks than anybody I know and it's packing them in.”
— Jim Cramer (07:10)

He emphasizes that in an environment marked by rising costs in motor vehicle maintenance, housing, and food, Wal-Mart's ability to offer consistent value has attracted even higher-income households, a demographic traditionally less inclined to shop there.

Cramer contrasts Wal-Mart with competitors like Costco and Amazon, praising their ability to maintain low prices through scale and strategic operations while noting the decline of other retail formats struggling to provide comparable value.

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3. Interview with Blake Burette, CEO of Rockwell Automation

In an exclusive segment, Cramer interviews Blake Burette, Chairman and CEO of Rockwell Automation. They delve into Rockwell’s recent Automation Fair event and strategic partnerships with tech giants Nvidia and Microsoft.

“For equipment manufacturers... to be able to create a digital twin of their application and we provide the bridge to the physical world.”
— Blake Burette (15:20)

Burette explains the integration of digital twin technology, which allows manufacturers to simulate and optimize processes virtually, reducing costs and improving efficiency. The collaboration with Nvidia focuses on leveraging accelerated computing and AI to enhance Rockwell’s automation solutions.

Cramer highlights the significance of these advancements in positioning Rockwell Automation as a leader in the industrial automation sector, capable of driving margins and productivity as the market recovers.

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4. Historical Analysis: Trump Tariffs and Stock Market Impact

Jessica Inscript provides a retrospective analysis of the Trump administration's tariff policies and their effects on the stock market. She compares past and present market conditions, noting that while tariffs often led to short-term volatility and sell-offs, the current bullish trend supported by favorable Federal Reserve policies may mitigate similar impacts.

“Tariffs had little impact on the market until they actually materialized during Trump's first term.”
— Jessica Inscript (20:30)

Inscript concludes that as long as the bullish trading cycle remains intact, influenced by supportive interest rates, the market can absorb potential tariff-induced shocks more effectively than in previous administrations.

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5. Defense Sector Insights: AeroVironment’s Acquisition of Blue Halo

Cramer discusses AeroVironment’s strategic acquisition of Blue Halo, a high-tech defense contractor specializing in anti-drone technologies. This move positions AeroVironment to lead in evolving defense strategies, particularly in countering unmanned systems.

“The combination of US and Blue Halo is going to create tremendous amount of value for our customers, shareholders and employees.”
— Waheed Nawabi, CEO of AeroVironment (32:23)

Nawabi elaborates on the necessity of a layered defense architecture to effectively neutralize various aerial threats, emphasizing Blue Halo’s role in enhancing AeroVironment’s capabilities. Cramer underscores the long-term value of this acquisition, asserting its significance in the defense industry's transformation.

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6. Lightning Round: Stock Recommendations and Callers’ Questions

The episode includes a rapid-fire segment where Cramer addresses callers’ questions and provides buy, sell, or hold recommendations on various stocks. Notable interactions include:

• Jim in Florida expresses appreciation for Cramer's advice on CVS, leading Cramer to affirm his cautious stance.

  “This one is too hard. And thank you.”
  — Jim Cramer (25:00)

• John in Florida inquires about Uber, to which Cramer advises a buy based on periodic investment opportunities.

  “I would buy Dara Costari and I would buy Uber.”
  — Jim Cramer (27:30)

• Cameron in Oregon, a military member, seeks advice on APH, and Cramer recommends a phased investment approach to mitigate risk.

  “Don't want to buy it all at once because then if it goes down, you'll feel like this is a mugs game and then you'll leave the market entirely.”
  — Jim Cramer (39:00)

This segment showcases Cramer's dynamic engagement with listeners, offering tailored investment strategies based on individual circumstances.

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7. Critical Look at Liberty Energy’s Climate Stance

In a critical analysis, Cramer scrutinizes Liberty Energy’s stance against climate change, highlighting discrepancies between the company's public declarations and industry standards.

“The conclusions reached, I find, are downright anti-diluvian and would be condemned by every single contemporary oil executive I've ever met.”
— Jim Cramer (42:00)

He contrasts Liberty Energy’s denial of climate crises and energy transitions with the proactive measures taken by other major oil companies like Exxon and Chevron. Cramer criticizes the company's undervaluation despite its controversial positions, suggesting skepticism about its long-term viability and leadership.

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8. Conclusion and Final Thoughts

Cramer wraps up the episode by reinforcing key investment insights:

• Retail Resilience: Emphasizes investing in value-driven retailers like Wal-Mart, Costco, and Amazon.

• Industrial Innovation: Highlights the importance of embracing technological advancements in sectors like industrial automation.

• Defense Sector Growth: Encourages consideration of strategic acquisitions in defense technology companies.

• Market Adaptability: Advises investors to remain adaptable amidst geopolitical uncertainties and evolving economic policies.

He reiterates the importance of understanding market cycles and leveraging opportunities through informed, strategic investments.

“There’s always a bull market somewhere, and I promise to help you find it.”
— Jim Cramer (Closing)

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Key Takeaways:

• Strategic Retail Success: Wal-Mart’s aggressive pricing strategies are setting it apart in a challenging economic landscape.

• Technological Partnerships: Rockwell Automation's collaborations with Nvidia and Microsoft are pivotal for future growth in industrial sectors.

• Historical Context Matters: Understanding past tariff impacts can inform current investment strategies amidst potential trade policy changes.

• Defensive Investments: AeroVironment’s acquisition of Blue Halo signifies growing opportunities in defense technologies, particularly anti-drone systems.

• Critical Evaluation of Energy Companies: Scrutinizing companies’ environmental stances is crucial for assessing long-term investment potential in the energy sector.

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Note: All opinions expressed by Jim Cramer on this podcast are his own and do not necessarily reflect the views of CNBC, NBC Universal, or any affiliated entities.

Transcript

[Jim Cramer]

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[Jessica Inscript]

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[Jim Cramer]

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[Jessica Inscript]

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[Jim Cramer]

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[Jessica Inscript]

Before investing, consider the fund's investment objectives, risks, charges and expenses. Visit ssga.com for perspectives containing this and other information. Read it carefully. DIA Subject to risks similar to those of stocks all ATs are subject to risk, including possible loss of principle. Alps Distributors, Inc. Distributor My mission is simple to make you money. I'm here to level the playing field for all investors. There's always a bull market somewhere, and I promise to help you find it. Mad Money starts now. Hey, I'm Kramer. Welcome to Mad Money. Welcome to Kramerica. Other people make friends. I'm just trying to make you a little money. My job, not just to entertain, but to educate. I got to put this all in perspective because it's that crazy right now. So call me 1-800-73-CBC. Tweet me jim Cramer. Look, no one wants to say, hey, the market's down because Vladimir Putin might defend himself with nuclear weapons now that Ukraine's firing long range missiles to Russia. But let's do some buy anyway if something dreadful happens. Oh, you might look like a genius for two seconds today until we all start worrying about the prospect of World War 3 and total nuclear annihilation. But if you make that warning and nothing happens. Well, you know what? At least for the moment, you get what happened today with the Dow dipping 121 points, S&P advancing.4% and the Nasdaq gaining 1.04% as traders shorted the market in the morning betting on Putin following through with his nuclear threat, but then ended up covering or buying back for shorts when nothing happened. Explosion when you get something as worrisome as nuclear threat, investors turn cautious and what do they do they buy Treasuries. US Government paper. It's known as a flight to quality. We've had a bad bond market of late with rates going up. In this Russian new concern changed the direction of bonds as these flight to quality buyers drove bonds up and interest rates lower. The fast traders out there know that when long rates go up, what do you do? You're supposed to buy tech. You know, it doesn't matter if those rates are going down because people are reaching for Treasuries. That's a flight to quality. Or because inflation is cooling or the Fed's about these, it doesn't matter as long as bond prices rally and bond yields go down. It's axiomatic, no, it's automatic that you're going to buy tech. And that's what happened today. It was terrific. Take a break from the endless reaction of President Elect Trump, even if we instead are worrying about what President Putin will do. Oh, and next time nukes are threatened and you see a flight to quality, remember this, the highest quality is the Magnificent seven because we know six of them are doing well. We just got the reports. It's the sevens in video that was the most quizzical. We don't get numbers till tomorrow. People are unwilling to wait to see till after the close. I mean, to me that's just plain strange. We will find out how smart or dumb they are tomorrow at this point. But I'm consistent in video. Own it, don't trade it. Now it wasn't just big tech though, that recovered nicely from that hideous seat of red opening. There's a stock, a stock that captured the entire zeitgeist of the moment today. And that stock is not Microsoft or Alphabet or Apple or even, heaven forbid, Tesla. No, that stock was the most prosaic of all stocks. Wal Mart, Wal Mart. Now this company had a stupendous quarter. One of the best I've ever seen. The secret? Is it the tremendous growth in E Commerce. Oh, that helps. Is it turn in advertising ecommerce? Whoa, is that ever lucrative. And it is inflecting positively as advertisers begin to see there's a terrific return on investment by advertising with Wal Mart on their E commerce site? No, the real reason Wal Mart roared is that the company has rolled back prices on 6,000 items, including 3,000 in grocery. And they've converted nearly 2,000 price rollbacks over the past year into long term price reductions. Look, I'm not kidding. It sounds like it's hokum. It sounds like it makes us go there you will actually see they have rolled back prices. Wal Mart's got more food that's high quality, under five bucks than anybody I know and it's packing them in. If you offer people good value in this environment, they will spend their hearts out. That's what they do. Only Amazon and Costco have the ability to bring down prices like a Costco. Wal Mart. Costco can do it because they have a club though. It's just, it's too costly for almost every other retailer. Why is that? What happened to the luxury buyer? I think she's either gone or at the very least gone into hibernation. Households earning more than $100,000 made up 75% of Walmart's market share gains from the third quarter. That is simply extraordinary. North of 100,000. I've never seen anything like it. It did happen in Costco. It did happen. There's a lot of Beamers in Costco, a lot, a lot of, you know, a ton of Mercedes. But if these people with six figure incomes they're supposed to get, they can go to Costco, but they're not supposed to be shopping at Wal Mart. To be fair though, I love shopping at Wal Mart. I have three different Walmart locations that I go to and they're all very special. They're all different. The prices are insanely low, the apparel styles incredible and incredibly cheap. These Walmarts are so much better than the old Walmart said. It doesn, it doesn't shock me too much. If, look, if I weren't a regular shopper at Wal Mart, I guess I would be astounded too that there are people who make north of 100,000 go to Wal Mart. I'm not. Neither is my parson's daughter. I mean my literally educated design parson's daughter likes to go to Wal Mart with me. But there's something going on underneath something that's hurting every department store, every dollar store, every mall store. That's just, and it's just there's not enough value. There just isn't. You just don't get it. Other than Wal Mart at Costco and Amazon. I don't want to go political here, but this is something I am also kind of miffed by, if not mystified. I think that the Republicans sweep forces you to analyze its impact on the market. I wouldn't do it if it was just like an msn. We were talking about politics. It's the impact on the market that I care about. To me, people are going to Wal Mart and Costco. And Amazon because they can't really afford to go anywhere else. Yeah, they got priced out. Prices have just gone up too much. It's hard to extrapolate the price increases to the stocks because they were subtle and they took place over multiple years. But let's do this. Let's go over the numbers since 2019 before COVID because I think these not only fell the Democrats, they also explained why Wal Mart, Amazon and Costco sales keep going up, almost everyone else is disappointing, and why you need to buy one, if not two, if not three of those stocks. Here they go. Since December 2019, motor vehicle maintenance and repair prices up 39%. Food away from home up 29%. Food at home up 27%. Housing up 26%. Admission in movies, theaters and concerts up 21%. Household furnishings and operations up 20%. There it is. That's it. That's the economy. That's the simple reason why only the big three value oriented retailers are thriving. There's just not enough money left after you spend it on this stuff. Sure, people, they, they pay for Netflix, they like Spotify, but they get that money by cutting the cord. They cancel their cable subscription. When they go out to eat, what do they order? They order the $11 offerings from Chili's and Texas Roadhouse. Not more than that, because they know that represents value. When you look at the motor vehicle maintenance repair number, you have to recognize that your auto insurance bill has to go higher too, because it just costs more to repair. When you see housing up 26%, that means mortgage rates make it even more expensive. And we do not know how to make them cost less. In this country, cars have gone up huge in price, and we can only conclude that the car companies have lost control of their costs. They simply aren't in sync with what's happening. Maybe they just want to make more expensive cars, but they're not going to make more money. There's a reason why Carbon is up over 370% for the year. It's perceived to offer value with its used vehicles. It's incredible how much scale you need if you want to be able to give people lower prices. It doesn't feel like Lowe's or Home Depot will have been able to roll back the prices. Ford and GM can't do it. Lenore and Toll can't do it. But Wal Mart, lots of rollbacks in every aisle. Costco, nothing but rollbacks as they pressure name brand after name brand to lower prices or get the hell out of our stores. And Amazon, perhaps the best or wouldn't have 200 million prime members. Is there anything more stark than the fact that the Democrats chose to attack Amazon when it is the greatest inflation fighter out there? It's so out of touch is painful. I do think Republicans have to be careful today. John. David Rainey, Wal Mart cfo, said his company may have to raise prices because of pending tariffs. That would be a bitter pill for the American consumer. Now, I'm going over these increases from 2019 because I think they hold the key to so much of what's happening in the stock market. Unless you can demonstrate show that your prices have come down, which is quite obvious from any trip to Wal Mart or Costco or any perusal of any page at Amazon, particularly on an Amazon prime special day, you won't be able to generate the kind of numbers that can send your stock higher. So let me give you the bottom line of a really important thesis that I am going to spend a lot of time on this year. When I talk to the retail execs, I know they're constantly asking me is this a cyclical or a secular trend? Will we get over what happened with inflation or will it stay with us? To which I say, I don't know. Beats me. I shop at Walmart, Amazon and Costco, so I don't even know what the heck you're talking about. Let's go to Jim in Florida. Jim, Jimmy, chill. A big sunny Le Chateau Naples, Florida. Booyah to you, Mom. And that is one complicated booyah that I will agree with. How can help you. I'd like to first of all thank you and your staff for all the years of help you've given me. My questions on cvs, Buy, sell or hold. I've wanted to buy it for years, but I've held back. I know you had not recommended Walgreens and you kept me out of that and I appreciate that. This is a tough one. I think that David Joyner is doing a very good job. I happen to like to see the chairman too, of Robert Farah. I do think that they have a lot of work to do. That's why it sells at only 10 times earnings. So what I'm going to do is do something that we should only be doing, playing bridge. But I'm going to take a pass and I'm going to do that because sometimes things are too hard and I'm not going to do that. This one is too hard. And thank you. And I. And the staff thanks you. Let's go to John, also in Florida. John, Mr. Kramer. Baba booyah baba booyah. Back to you. I want you to know you always put me in a good mood. Your energy is unmatched friend. Do my best. Do my best. Got up at 3:38 Jim the trainer comes over, beats the heck out of me and I say, you know what this is? I feel I got the worst part of the hardest part of my day over with by 5:30. Let's go to work. Fantastic. Unreal. My question is about Uber. I'm that's probably one of my biggest holdings. At these prices it seems like it's taken ahead and Tesla's affecting it somehow. Would you buy sell a whole? I would buy Dara Costari and I would buy Uber. Periodically you get these chances. It's really incredible when you get them. I can't believe it. We had it. You know, we had one in Cava, we had one in Sweet Green, we had one in Reddit. They're so hard to come by. When you get them you must move, you must pounce. Don't be scared. In this environment, if you're a retailer and you want to send your stock higher, you have to demonstrate that your prices have come down. Right now we're seeing that only from Wal Mart, Costco and Amazon. I mean money. Tonight, Rockwell Automation give some light guidance for the year ahead. But could the industrial be positioned maybe for a turnaround on the heels of some new partnership announcers including Nvidia and Microsoft? I've got the CEO then how could Trump driven tariffs impact the tape ahead? I'm actually pulling off the history as part of what we just did at the top of the show. Taking away taking a look at what happened last time. And later I'm checking in with a big one aerovironment to hear where the defense name stands in the current geopolitical landscape. Remember, they're a drone company and they just bought something that can be anti drone soup. The nuts stay with cream.

[Waheed Nawabi]

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[Jim Cramer]

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[Jessica Inscript]

When.

[Waheed Nawabi]

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[Jessica Inscript]

What'S going to take for Rockwell Automation to get its stock to go higher? This maker of industrial automation machinery and software saw its stock jump more than 9% on the day of the election because a lot of us assume that Trump's tariffs would drive investment in domestic manufacturing Reshoring Sounds great in theory, but in practice, Rocket Automations become almost a serial disappointer in earnings. Sure enough, two days after the election, the company reported another tough quarter. But this week, Rocket Automation is trying to change the narrative with its annual Automation Fair event in Anaheim. It's paired with an Investor Day meeting tomorrow. Before that, though, they're bringing their pitch directly to Craig America. So let's take a closer look at he's the chairman and CEO of Rockwell Automation to learn more. Welcome back to Mad Money.

[Blake Burette]

Great to be here, Jim.

[Jessica Inscript]

Okay, so Blake described us. We see lots of people look at a lot of different things behind you. Describe to us what people are looking at.

[Blake Burette]

So Automation Fair is really a celebration of manufacturing as the most used technology in American manufacturing. It's an opportunity for Rockwell and our partners to showcase technology hardware, software services that are used in virtually every application across the land.

[Jessica Inscript]

In terms of manufacturing now, are you working, say, with Nvidia to do the digital twin Omniverse factory builds that he. That Jensen Wong talks about.

[Blake Burette]

Absolutely. I'll be on stage with Nvidia tomorrow. We'll be talking about our relationship, which at the centerpiece is really the way that our emulate 3D simulation software works in the Omniverse. And the idea is that for equipment manufacturers, for line builders across food, beverage, automotive, a whole variety of industries, to be able to create a digital twin of their application and we provide the bridge to the physical world.

[Jessica Inscript]

Will people understand that you can do a lot of things in the digital twin that don't cost nearly as much and if you're trying to make changes on the real deal, get it set before they build it and then maybe even save one third of the cost.

[Blake Burette]

I've been talking to customers for quite a while and especially over the last couple of days here, and they do understand. They recognize that being able to create a digital twin of their process and try it out ahead of time really reduces the amount of time and labor and money in the commissioning process. And then it makes it easier to try out and deep bottleneck changes to the process as well. So it's something that really started to accelerate during COVID when people couldn't be physically in the same place together, and it's accelerating.

[Jessica Inscript]

Well, let's drill down a little bit on that. On a recent quarter, you had a beat, but you had organic sales down 21%, which obviously we think is an alarming number. What happened to organic sales that they could drop so much?

[Blake Burette]

Well, so the year before when we were able to get a hold of the semiconductors to allow us to shift what was a really enormous amount of backlog, we had difficult comps as we started moving through those in 24. And we and others in the industry have talked about the overstock that suppressed new orders in the year. But we're optimistic because the business case for automation remains strong. And we see the opportunity, as the market recovers, to be able to expand, obviously revenue, but also margins because of the productivity that we've taken over the last year. So it was a very difficult year, but we're not letting that go to waste by being able to re baseline the fundamental cost of the company.

[Jessica Inscript]

Very good. Now, if you don't mind, can you talk to us about the Microsoft partnership that you announced today?

[Blake Burette]

Yeah, it's exciting. I mean, we're working again to combine the worlds of operational technology and information technology with partners like Nvidia and Microsoft. We're working with the best and they're very excited to be working with us, specifically with Microsoft, we're showing here on the floor a copilot that allows us to harness the power of generative AI on the front end of our programming tools for the workhorse in the industry, our Logix controllers. So in the past you had to be familiar with somewhat arcane languages and the syntax with programming ladder logic. Today you can use natural language to be able to draw from libraries and create code that runs your process.

[Jessica Inscript]

Well, Blake, you're the first person in actually industry that I've seen willing to say point blank, this is helping. People are ordering it right now. What is the disconnect between all the so called wise guys on Wall street who are telling me, Jim, there's no real advancement here, it's not really going to help and what you're telling clients, because clearly it is a very, very important step function that the accelerated computing and artificial intelligence offer.

[Blake Burette]

Look, we have the domain expertise to know where to go first to apply this technology. And it's at the sensor level in terms of processing vision images, it's at the control layer. With things like Logix AI empowering our mobile robots, you might be able to see some of those behind me. We're using Nvidia GPUs and artificial intelligence for the control and those mobile robots. So we're making it matter. We're having the impact in specific applications because we understand what's needed on the factory floor.

[Jessica Inscript]

Okay, and where can we watch your. Is there a fireside chat with Nvidia? What will you be doing exactly?

[Blake Burette]

So Rev, who runs their simulation group, and I will be talking tomorrow. We'll be talking about the partnership, we'll be talking about some of the specific things we're doing between our simulation tools and their omniverse. But more broadly, looking at the huge opportunities for Nvidia as a premier supplier of accelerated compute technology to be able to harness that amazing amount of data that's coming through our programmable controllers in American industry today. That's what we're going to be talking about.

[Jessica Inscript]

Well, that's what we need to see because I know Nvidia reports tomorrow. It's quite a big day for them. And thank you for taking us through what's going on at your automation fair. Good to see you.

[Blake Burette]

Love to do it.

[Jessica Inscript]

Thanks. Excellent. That's Blake Burette, he's the chairman and CEO of Rockwell Automation. And Med Bunny is back after the break. First and foremost, the thing that powers your business is power. And when it comes to power, Ford Pro has options. Now scratch that, we've got every option.

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[Jessica Inscript]

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[Waheed Nawabi]

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[Jessica Inscript]

After an initial battle of euphoria after President Elect Trump won the election, Wall street spent the last week fretting about whether he'll really try to follow through with the less market friendly aspects of the agenda. You know what comes to mind there? Major import tariffs. There's been a lot of speculation if he'll really be able to follow through. Or maybe this just a negotiating tactic with our trading partners, quote, the art of the deal or how much damage these plans could do to the global economy and the stock market. I say let's put the speculation aside for the moment and think about what we already know. Because we know how the stock market reacts when the Trump administration rolls out new tariffs and launches a trade war with China. Even if that if what we saw in the first term was less aggressive than what he's proposing right now. That's why tonight we're going off the charts with the help of Jessica Inscript, the first woman on the active trader desk at Fidelity, who's now director of investor [e-mail] as well as the co host and founder of the Market Maker podcast. Because we want to get a better sense of the history here and what it means for the president without any emotions involved. As Mark Twain put it, history doesn't repeat itself, but often rhymes. You know, I kind of like that more than that Karl Marx line about how history repeats itself versus tragedy than his force. As far as Inscript sees it, even if history doesn't repeat directly, or even rhyme for that matter, certainly echoes. So it's worth listening to the echoes of past Trump tariff actions to find out where we might be headed. First, take a look at a chart. This is a weekly chart of the S&P 500 from late 2014 through the very beginning of 2018. Now, the Obama administration actually tried to sanction a Chinese Telco company in 2016 called ZTE, briefly prohibiting American companies from selling goods or service to them without a license. But they quickly backed down. In response, the stock market kept chugging along. But once Trump came in, we started investigation of China's unfair trade practices for technology, intellectual property rights. Then he orders an investigation of Chinese dumping of steel and aluminum. Basically, they subsidize the stuff and then their producers undercut us on price, crushing our own manufacturers. This has just been a constant pattern. By October 2017, the US International Trade Commission was recommending safeguards to protect solar panels from Chinese dumping. So you can see this is a period of halcyon. We pull back from the zte, but then we go right forward. This was all the build up to the trade war. And it didn't seem to have much of an impact on the averages. Even though the Federal Reserve was gradually raising interest rates during this period, is obsessed that the SPF was still in a bullish trading cycle with the 13 week, 26 week and 40 week moving averages trending the right direction. Remember, she likes these time frames because they represent 1, 1, 2 and 3 quarters respectively. And we know, we think about quarters on Wall Street. Wall Street. Now let's take a look this next chart. Check out the action in the S and P from mid 2017 through the very beginning of 2020. This is where we start to get the real tariff action from the first Trump administration. As it points out, things get a lot more volatile, don't they? Trump imposed tariffs on steel, aluminum, solar panels and washing machines, among other goods. All these helped the industries in question, but the broader market didn't like that. We were triggering a global trade war. Sure enough, between January 22nd of 2018. Okay. And December 24th of 2018, the S&P 500 lost 18% of its value. All right. Of course, some of that's because the Fed got much more aggressive about raising interest rates during this period, taking them up 100 basis points that year. But it definitely wasn't just the Fed. You can see from the chart that virtually every time we got more tariffs, the S and P would roll over. Every time China retaliated, we'd sell off. So you're looking at this. This is this. All right. Of course, once the Fed decided to stop tightening, the very end of 2018, the S& P was finally able to find a floor at the 200. This is the 200 week moving average. You see, that's the intersection of the floor. And then it just rebounded like crazy. According to inscript that catalyzed A bullish trading cycle. One that continued until Covid hit in 2020. Long story short, the market couldn't handle the trade war when the Fed was tightening. But as soon as the Fed started easing, well, those losses evaporated. What does this mean for the present? Let's take a look at a weekly chart of the S and P going back to October of 2023. Unlike 2017 and 2018, the Fed is now our friend, creating a much more benign environment for the bulls. Okay. Of course we know from back then that Trump used tariffs as a bartering tool, with the averages selling off sharply nearly every time some new tariff threat materialize. But as soon as the Fed stopped tightening, okay, soon as it stopped tightening, the markets stopped reacting as aggressively to the trade war. The Fed was in play. Not the trade war as it sees it. Something like a trade war can certainly hurt us badly when the market's already trending bearishly. But if we got a bullish trading cycle like we do right now, and she's not worried as long as we can maintain that cycle right now. Inscription notes that The S&P 500 is very much in bull mode, supported by key technical indicators. It found a floor support on election day at the 13 week moving average trading, a short term rally. The 13 week, 26 week and 40 week moving averages are all acting as strong support levels. If we get a big breakdown from here inscriptions, we have a very strong floor at 575 7. As long as that level holds, the bullish trading cycle remains intact. Wow. In that case, she's betting the S and P can digest the damage from a trade war. In large part because the Fed's our friend right now. When the Fed's your friend, it's easy for the bulls to sweep all sorts of negatives including tariffs under the rug. Finally, what about short term catalysts? All right, Kramer, fave and video reports tomorrow after the close. So check out the weekly chart of Nvidia going back to October of 2023. Pretty disposal. Wouldn't be surprised if it now the largest company in the world can set the tone for the remainder of the year with this report tomorrow. Wow. Putting aside the quarter to mine, but I have no idea how it was going to pan out. And notes that Nvidia's got a bullish trading cycle with 13 week, 26 week and 40 week moving averages sloping upwards. And that's got floors of support there too. At the same time, it's faced resistance from 131 to 140. Right now, stocks 147. And if it finishes the week above the 140 exchange, that would represent a major breakout for Inscript. Of course we just think, well you know what, it could go like that. But she's thinking about a longer term major breakup based on all these different lines. In her view in video has the power to trigger volatility. Diffuse. Diffuse it or diffuse it depending upon how the quarter pans out. If the company beats earnings and offers us positive guidance that could get this whole market out of the woods. I think that's a lot to put on Nvidia. I don't know if we can do that, but I'm pointing it out that she thinks it can. Here's the bottom line. The charges interpreted by Jessica Inscript suggested tariffs had little impact on the market until they actually materialized during Trump's first term. All set. The saber rattling beforehand didn't do much damage even when the tariffs actually hit and the market sold off. We eventually erased those losses the moment bye bye bye that the Fed stopped raising interest rates. So until the tariffs actually hit. Instagram says you can take a page from Taylor Swift and shake it off. You know what? With the exception of the Nvidia comments because that's too much to put on Jensen Huang and his team. I think she's got a real good point. Let's go to Manal and Georgia. Manal. Oh yeah. Jim, Booyah. Thanks for taking my call and guiding me all these years about the investment strategy. Thank you so much. That's what I want to be doing. Thank you. I want to be a guide and a teacher, not a trader. I don't like trading. How can I help? Yeah, I'm interested in CrowdStrike Holdings. The ticker is CRWD. I have been watching this talk and is it still a good time to enter? We. We bought some stock this morning for the trust. Why did we do that? Okay. Because the stock was down because of whatever was going on on in Russia and we felt that was a great opportunity and I feel very good that we did it because there has not been a day that this thing doesn't seem to be going up, up, up. I still like the stock very much. But we did get a better price during the Russian scare that we got this very morning. Thank you for those kind words about what I am trying to do here after more than 19 years of going at it. All right. The charts are covered by Jessica Inscript suggest that until the Trump tariffs actually start to take hold, it's not helpful. Afraid about when it comes to your investments. It won't make you money. I think she's got a good point. There's much more. Mad money, including my exclusive with Aerobarman, fresh off its announcement. Require a defense tech company, Blue Halo, that can play offense against other drones. And what's ahead for oil and gas following Trump's pick to lead the Department of Energy. I'm going to tell you where I stand on this sector and the quiz choice that he made. And of course, all your calls, rapid fire in tonight's lightning round. So stay with Kramer. What happens to AeroVironment, the defense contractor that primarily makes drones? Now the incoming Trump administration, a lot less likely to provide aid to Ukraine. This company has been a huge winner ever since Russia invaded in 2021 and its switchblade kamikaze drones have become the mainstay of the Ukrainian army. But over the past week or so, this stock's come down nearly 18% from its highs precisely because of the election today. Our environment got hit again. If we learned they're buying Blue Halo, that's a privately held high tech defense contractor, in a 4.1 billion all stock transaction. I think their expertise in electric, electronic warfare, cyberspace technologies and AI makes us a smart way for our environment to diversify away from drones. But there's no denying paying a big premium here, so why is it worth it? Let's go straight to source with Waheed. The lobby is the chairman and CEO of environment. Get a better sense of this. Mr. Robbie, welcome back to Mad Money.

[Unknown]

Great to be with you, Jim.

[Jessica Inscript]

All right. Well, I was very excited about this deal. One of the reasons why was because it's offering you a platform. It is making sense of. It's a foundational change. I'm going to give you the floor to talk about how transformational this really is to the people who own the stock of AeroVironment.

[Unknown]

That is exactly the case, Jim. I am incredibly, incredibly excited about this transformational opportunity and obviously transformational change to address our most important needs of our customers. This is a once in a generation transformational change and opportunity not only for our company and our shareholders, but actually for the entire industry. The face of defense and war fighting has changed dramatically. There's been a step function change in posture, strategies. And our industry needs players like AV to essentially adapt and become and prepare themselves for the future of warfare. The categories that we're going to be the leaders in, the combination of US and Blue Halo is going to create tremendous amount of value for our customers, shareholders and employees.

[Jessica Inscript]

Let's See, can you talk directly about what Blue Halo brings you in terms of really counter drone because you are the drone king. But these, these cheap drones that people that they make in, in North Korea, that they make in Iran, that they make, the Russians make, they've been bedeviling the Ukraine soldiers. What will this do?

[Unknown]

So look, there are certain categories that are going to be very strategic, high growth categories and important domains in the national security and defense industry as a whole. Drones loitering munitions, which both Aerovironment leads and has strong franchises, Counter unmanned systems or counter drone market is going to be huge. Blue Halo is a leader in that space. Space communication is another category that's really critical. Electronic warfare and cybersecurity, these are categories that they lead. The combination of the two companies creates the world's best in class mid tier pure play robotics solutions company that addresses the most important needs of our customers and national security and our allies as well. That's what this transformational transaction and acquisition is all about. It's about positioning AV to deliver on what our US DoD and military and our allies need around the world for the next few decades.

[Jessica Inscript]

What is the best way to shoot down these drones? I know Israel's been working on some sort of radar, we've had some sort of microwave. What is Blue Halo solution?

[Unknown]

So that's a great question because it's really misunderstood in the market and an industry. What? The best way to do this is called a layered defense architecture. Which means that there's not only one type or one strategy of how to do that. You have to have a layered approach to detect these items or these assets, whether they're drones, they're small or big, fast or slow, manned airplanes, rockets, missiles, etc. Then you have to identify those targets and assets. Then you have to apply various different levels of neutralization or defeat. Starting initially with for example rf, radio frequency signals jamming. Then you got to go to directed energy in lasers and laser communications and then you got to go to actually kinetic defeats, which things such as switchblade and other assets that they have plays very, very nicely. So what Blue Halo has is actually one of the only companies in the world that has actually attack this problem in a very strategic and methodical way. They have an end to end solution to address this problem. Which by the way, it's a dire, dire need globally to how to counteract these things and keep our men and women in uniform safe.

[Jessica Inscript]

Now I would have to believe if people were selling your stock because they felt that perhaps on day one, President Then President Trump would end the war with Ukraine. This makes it so that it really isn't that big a deal if that occurs because you're creating the next generation anti drone warfare.

[Unknown]

That is precisely the case, Jim. We have so many layers of demand for systems and our solutions globally that it'll keep us busy for the next decade, if not longer. The strategies and military has changed. We have to equip ourselves as a nation and our allies with hundreds of thousands, if not millions of these assets that is going to be taking place. We're at the very early stages of that cycle, including in Ukraine. Even if the war were to stop tomorrow, they're going to need 10 to 20 times more of the capacity of the things that they don't have. Even today. They are not going to sit there idle, wait for another conflict. And we are positioned extremely well for that.

[Jessica Inscript]

Is the Pentagon we are cost too much away from you? Does the Pentagon. Is Pentagon aware that we have to make it more cheaply?

[Unknown]

Absolutely. And we support that. Airvironment and AV is exactly the kind of company that's actually addressed that cost problem. Our drones and loitering munitions cost a fraction of the other alternatives. They're incredibly compelling economically and they're very effective in the battlefield. You will see hundreds if not thousands of the videos out there, real examples on YouTube and other channels, public domain social media that shows how we are taking out multimillion dollar targets and inflicting pain into the Russian military. It is remarkable what we've done. And you can go talk to the Ukrainian leaders, military leaders, they'll tell you the story. And our drones are incredibly cost effective.

[Jessica Inscript]

Well, do you think that the Ukrainians needed to get those long range missiles that immediately President Putin came back and said, listen, we got to put nuclear back on the table.

[Unknown]

Yeah. Ukraine needs all sorts of assets and capabilities to fight this enemy and common enemy. We need to make sure that we equip him with short range, mid range and long range capabilities so they can actually successfully fight this conflict. We need to do this in a very effective and aggressive manner so they can actually have superiority in the battlefield right away. I do agree with that and I do believe that it's time for us to take a very strong position on that.

[Jessica Inscript]

All right.

[Unknown]

And companies like Biden is very unique in the space where we can ramp up production. When we have the capacity today to be able to deliver thousands of these systems today to our warfighters and to Ukraine, to our allies, we're doing it. We've been doing in the last two and a half, three years. And we're going to continue to do the next decade or so.

[Jessica Inscript]

Well, I am very excited about this deal. I'm very excited for what you put together. It is definitely next generation. It is transformational. And I want to thank Waheed Nawabi, chairman President CEO of Aero Environment. Abhab, thank you so much, sir. This really clarified a lot of things for me. I really get it now.

[Unknown]

Thank you, Jim. Thank you for having me.

[Jessica Inscript]

All right, good to talk to you. Maybe back after the break. It is time for start with the light round. Chris Raymond calls me name player plan and then the lightning round is over. Are you ready, Skeet Daddy? Time for the light round cram. Let's start with Michael and Tennessee Michael. Booyah, S.K. daddy. I want to tell you my wife Elena is a big fan and I want to know, with the China slowdown of the economy and the upcoming Trump administration, how do you feel about the copper stock? I don't like the copper stocks and copper doesn't yield a lot here. 1.36. I don't like free grand. I just don't want to own. I don't, I mean, you know, their time is coming, gone. Hey, we had this company last night that talked about doing a light fiber in order supplant copper. I thought that made a ton of sense in the data center. Let's go to Rahul in Pennsylvania. Rahul. Hey, Jim. Hey man. Thank you. You know a member of the CNBC club. Question is about transmitting group. This company makes organ organ systems that preserves organs. I want to know what your prospects are in the company. Yeah, I don't know what, I don't know how you can really make a lot of money in that business. Frankly, I, I, I applaud them for doing it, but I just don't know how you can make the money. Let's go to Cameron in Oregon. Cameron. Booyah, Jim. Booyah. Hey. So as a member of the military and trying to invest within my circle of confidence, there's a company whose products I'm familiar with. So I decided to do a little more digging. I found that they also have good data center exposure and a telecommunications business. Given the strong run up year to date, is it too late for me to consider taking up a position in APH APH is an amazing company. First of all, thank you for your service. That's great. I do think that this is a terrific stock. Here's what you do. When you have a great stock like that and you've followed it let's say you want to have 100 shares, buy 25. Now, if you get a lot of crazy things that happen, maybe you get a market wide sell by 25 more and then if it doesn't come in, you can buy more. But I don't want you to buy it all at once because then if it goes down, you'll feel like this is a mugs game and then you'll leave the market entirely. Let's go to Joyce in Georgia. Joyce, hi. Thank you for taking my call. My pleasure, Joyce. How can I help? We're here recovering from Hurricane Helene where I live, but doing well. Oh, good, good. Wondering what your feeling would be on Devon Energy. I like Devin, but I think Kotara is far superior to Devin. That's the one you want to be in is Kotara. That's we own it for the CBC Investing club. And that, ladies and gentlemen, is the conclusion of the lightning round. Let me say from the outset that I think the world of Liberty Energy, the oil service company run by Chris Wright, who's Trump's pick for energy secretary. It's the fourth largest oil service company in North America, covering all the major basins. I like fracking. I like oil service companies that help extract fossil fuels from land. Their August slide deck, titled Liberty Energy and Energy Realities is a terrific document and a fabulous pay in to the steel revolution. The energy and geopolitics Politics politics section will make you feel proud of what Liberty does and more important, the way fracking has changed the balance of power worldwide. You will feel safer. You are safer. Oh, but then there's that last page in the deck, the conclusion page. And here, right now, we part company. The conclusions reached, I find, are downright anti diluvian and would be condemned by every single contemporary oil executive I've ever met. And I met a ton of. I want to click them off just to show you what we're dealing with here. First conclusion, right, reaches there is no climate crisis. Now, every other oil person I bet, is worried about a climate crisis.

[Blake Burette]

Very worried.

[Jessica Inscript]

They're worried online, they're worried offline, they're worried at home, they're worried, they're worried at a bar, they're worried at a restaurant. It sounds like Dr. Shoes, but they're worried everywhere. They either take their children seriously or they see what the oil industry has done to the environment. And they're perturbed. I've seen even the most heart beaten oil men trying to stop flaring something they never used to care about because of methane pollution, no climate Crisis? Give me a break. Second, there is no energy transition. Not only do most oil CEOs accept that there's an energy transition, they're all preparing for it. They're trying to get their companies ready. Some are hoping that they have reckoning what we push back to the 2030-2050s. But others, like Exxon's Darren Woods, a big company, are leaders of the transition and are proud of their spending to preserve the environment. Coteris Tom Jordan actually pays people to make his company a better steward of the environment. Chevron's Bike Worth talks about the need to be ready for an energy transition, but he thinks it all most likely involve vehicles and take a very longer time for other fuels. I don't know. Those guys seem to be every bit the oil got people as right. Now how about this third conclusion? Net zero. 2050 is a sinister goal. I mean really. I mean sure, the document adds zero energy poverty. 2050 is a superior goal. Oh, sinister. I'm calling that an ill advised description. Now I know when I first got in this business many years ago there were plenty of oil people who really believed this stuff. I mean like what Wright does. But we've come to realize that education has made us, and I include myself more cognizant of what many businesses are doing to the planet, especially the fossil fuel companies. It happened. We're bummed it happened. Wright's ethos is different from my own. But who cares about my ethos? What matters to you is that in my nearly 20 years doing mad money, Wright's ethos is different from every CEOs both on camera and off. And you're watching someone who's an avowed champion of what the oil and gas industry has done for our security and power as a nation. I have drunk the fracking fluid. Literally I did in the Bakken. Tastes like a protein shake. Now go one step further. I'm not seeing this Liberty energy atop the 52 week high list. In fact it's less than 1 point above it 50 week low down more than 7 bucks from its 52 week high of 2475 selling at less than 10 times earning. It is far out underperform the XL that's largest energy etf. Now some of you think that the anti climate change attitude would have produced a superior turn. But it doesn't. Not anymore. Now I know what it does. I know what it does. It embarrasses all the oil execs I know who are concerned about climate change. And don't mock the efforts of the people in the industry that are trying to do something about reducing the needless pollution that's a natural bypass product of extraction. So let me say this. I'm sure that right will make for a different kind of energy secretary, but when it comes to getting oil and gas out of the ground as cleanly as possible with the least damage in the planet, well, I have the CEOs of 22 other companies I prefer for the job. The 22 oil and gas companies in the S&P 500. Yeah, any one of them. I like to say there's always a bull market summer. I promise I'd find just for you. I hear Mad money. I'm Jim Kramer. See you tomorrow.

[Jim Cramer]

All opinions expressed by Jim Cramer 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 Kremer on television, radio, Internet or another medium. You should not treat any opinion expressed by Jim Cramer 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. To view the full Mad Money disclaimer, please visit cnbc.com madmoneydisclaimer first and foremost.

[Jessica Inscript]

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[Unknown]

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[Jessica Inscript]

Plus they're all connected, so you're always in the driver's seat. The power is yours. Visit fordpro.com today to learn more.