Mad Money w/ Jim Cramer 1/7/25

Summary

Mad Money w/ Jim Cramer – Episode Summary (January 7, 2025)

In the January 7, 2025 episode of CNBC's "Mad Money" with Jim Cramer, host Jim delves deep into the tumultuous state of the stock market, explores specific sector performances, addresses caller inquiries, and provides insights into significant corporate developments. This comprehensive summary captures the episode's key discussions, insights, and conclusions, supplemented with notable quotes and relevant timestamps.

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1. Market Overview and Economic Insights

Timestamp: [00:48]

Jim Cramer opens the episode by addressing the day's stark market downturns. The Dow Jones Industrial Average dipped by 178 points, the S&P 500 fell by 1.11%, and the Nasdaq plunged by 1.89%. Cramer attributes these declines to rising long-term interest rates and investor concerns over the Federal Reserve's credibility.

• Key Points:

  • Interest Rates Impact: Cramer explains that the rise in long-term bond yields, driven by strong survey data, indicates that the Fed might not implement further rate cuts soon. This shift has unsettled investors who were anticipating such cuts to revive the economy.
  • Market Reactions: The increase in yields, coupled with the Treasury Department's substantial sale of 10-year bonds, has led to significant market volatility.
  • Historical Context: Comparing current rates to the 1990s, Cramer suggests that despite higher long-term rates, the stock market previously experienced substantial growth, hinting that today's market conditions might not spell the year's end.

• Notable Quote:

  "The decline in bond prices, rise in yields gained more steam as the Treasury Department sold 10-year bonds at a sizable discount. That also is not a good sign." – Jim Cramer [02:30]

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2. Sector Analysis: Airlines

Timestamp: [14:39] - [20:38]

Jim shifts focus to the airline industry, particularly American Airlines, which received multiple upgrades from analysts despite recent struggles.

• Key Points:

  • Analyst Upgrades: Firms like Melius, Jefferies, and Cowan have upgraded American Airlines, citing the removal of unproductive capacity and new premium seating as positive indicators.
  • Management Decisions: Past missteps by American Airlines, such as cutting spending in sales and limiting loyalty points through third-party sites, have adversely affected its performance, especially in the corporate travel segment.
  • Future Prospects: The analysts believe that American Airlines is well-positioned to regain lost market share and benefit from industry-wide capacity reductions.

• Cramer's Perspective: Despite the upgrades, Cramer remains cautious, suggesting that much of the positive sentiment reflects broader industry trends rather than company-specific improvements. He advises waiting for upcoming earnings reports before making investment decisions.

• Notable Quote:

  "American can easily clean up the balance sheet as they plan to devote their free cash flow through 2026 to paying down debt where they're already making progress." – Jim Cramer [17:45]

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3. Industry Update: US Steel and Cleveland Cliffs

Timestamp: [22:03] - [31:46]

The episode delves into the contentious merger attempt between Japanese steel giant Nippon Steel and U.S. Steel, which was blocked by President Biden citing national security concerns.

• Key Points:

  • Legal Battles: Both Nippon Steel and Cleveland Cliffs have initiated lawsuits against the federal government, alleging anti-competitive racketeering activities aimed at monopolizing the domestic steel market.
  • Cleveland Cliffs' Defense: Lorenzo Goncalves, CEO of Cleveland Cliffs, vehemently denies the allegations, highlighting the competitive nature of the steel industry and the overcapacity issues stemming from China and Japan.
  • Political Interference: Cramer questions the timing and reasoning behind the Fed's rate cuts amidst strong economic data, suggesting potential mismanagement or loss of credibility.

• Notable Quotes:

  "We have too much inflation in the system. The Fed can't do anything about it because it just cut rates." – Jim Cramer [25:28]
  "President Biden finally did what he had to do. But President Trump will continue to do it. And they're going to make America great again." – Lorenzo Goncalves [30:53]

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4. Technical Analysis: The Tech Sector and Nvidia

Timestamp: [32:10] - [43:31]

Jim explores the technical aspects of the tech sector's performance, focusing on Nvidia's stock movements following CEO Jensen Huang's keynote at CES.

• Key Points:

  • Tech Sector Resistance: The S&P 500 faces resistance at the 605 mark, a critical level that needs to be surpassed to trigger bullish momentum. The Semiconductor sector shows signs of turning bullish, potentially leading the tech-driven rally.
  • Nvidia's Performance: Despite a lackluster stock performance post-keynote, Cramer praises Huang's vision for Nvidia's role in the emerging agentic economy, emphasizing advancements in physical AI and autonomous technologies.
  • Investment Strategy: Cramer suggests that while Nvidia's stock may experience pullbacks due to short-term trading activities, the company's long-term prospects remain strong. He encourages investors to consider buying during these pullbacks.

• Notable Quotes:

  "Jensen took a leap to go much deeper with physical AI, including making humanoid robots and taking autonomous drive to the next level." – Jim Cramer [35:15]
  "Nvidia stock was brought down not by anything lacking in CES, but because there was too much hot money in the stock." – Jim Cramer [42:13]

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5. Callers' Questions and Jim's Responses

Timestamp: [08:58] - [42:51]

Throughout the episode, Jim engages with callers seeking advice on various stocks and investment strategies.

• Highlighted Interactions:

  • Boeing Investment: A caller inquires about investing in Boeing despite negative news. Jim expresses cautious optimism but emphasizes waiting for management's confidence in overcoming past missteps.
  • Affirm Holdings: Discussion revolves around the stock's recent performance and future prospects, with Jim sharing insights based on previous similar scenarios.
  • Dupont Spin-off: A caller asks about Dupont's potential spin-off, and Jim advises a strategic buy range, suggesting the stock is undervalued.

• Notable Quotes:

  "I have been impressed with Kelly Ortberg. I think that I've been pushing them to do that secondary for over 100 points. And you know what? He listened to me." – Jim Cramer [09:35]
  "Stocks like Nvidia… need to be bought happily by the inevitable pullbacks." – Jim Cramer [41:37]

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6. Conclusion and Final Insights

Timestamp: [43:31] - [47:36]

In his closing remarks, Jim reiterates the importance of fundamental analysis over short-term market fluctuations. He emphasizes the potential of the tech sector to drive market growth, provided that key resistance levels are overcome and macroeconomic indicators remain favorable.

• Key Takeaways:

  • Market Sentiment: Investors should remain vigilant about interest rate movements and their impact on various sectors.
  • Tech Sector Optimism: Despite recent volatility, advancements in AI and autonomous technologies position tech stocks like Nvidia for long-term growth.
  • Caution in Trading: Jim advises against succumbing to panic selling, especially in volatile markets, and encourages thoughtful investment based on solid fundamentals.

• Notable Quote:

  "Remember, we need real reasons to buy stocks, not just like hey, valuations attractive, let's go to work." – Jim Cramer [30:12]

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7. Disclaimer

Timestamp: [47:36] - [48:18]

Jim Cramer concludes the episode with a standard disclaimer, clarifying that his opinions are his own and do not represent those of CNBC or its affiliates. He advises listeners to treat his insights as personal opinions rather than actionable financial advice.

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This episode of "Mad Money" offers a thorough examination of current market dynamics, sector-specific challenges and opportunities, and strategic investment advice. Jim Cramer's blend of technical analysis, sector deep-dives, and interactive discussions with callers provides viewers with a multifaceted understanding of the financial landscape as of early 2025.

Transcript

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[Jim Cramer]

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. Man, money starts. Hey, I'm Kramer. Welcome to Mad Money. Welcome to Kramerica. I'll be with my friends. I'm just trying to save you a little money. My job is not just to entertain, but to explain about what happens in days like today. So call me at 1-800-743- CNBC. Tweet me at Jim Cramer. Rates 1 stocks 0. That was the score of today's game and it terrified the bulls. Because if people are going to sell stocks every time long rates creep higher as they did, we could be in for a world of hurt. The House of pain. And that's what today's session sure looked like. Where The Dow dipped 178 points, the S&P lost 1.11% in the Nasdaq plunged 1.89%. It's really nasty in that NASDAQ land. And it crushed lots of well known stocks. But the selling finally got to all those speculative nuke and quantum computing stocks that I've warned you and told you to sell. It's not too late to do so. I repeat, it's not too late to dump what you and I know are garbage stocks. Why did higher rates pulverize so much of the good part of the market today? And why do some stocks escape the gravitational pull? The laggards that came to lead today? First, the cause of the decline in bonds and that dastardly rise in yields wasn't anything catastrophic, thank heavens. We get a lot of surveys thrown at us all the time. One of them canvases service providers. And this survey showed surprising strength. So much strength that it makes you think that the Fed might not give us more rate cuts anytime soon. Right now a ton of investors believe that the Fed needs to put through a bunch of rate cuts in order to revive the economy. Lots of those polls are counting on those cuts. That seems wrong today. They are rocked to the core because not only they've been wrong, they're starting to question the Fed's credibility. Nothing. These investors were shocked to see a survey that spits out a number that is as high as it was in April of last year when rates were running high and the economy is running too high. They're presuming that long rates are going to go back to where we were when we had such a hot survey. And that's exactly what happened today. The decline in bond prices, rise in yields gained more steam as the Treasury Department sold 10 year bonds at a sizable discount. That also is not a good sign. All right, now let's stop the catastrophizing for a moment. In the 90s, long rates were much higher than these mean level north of 6%. And the stock market still rocketed higher almost the entire time. You can't just say that today's score is the final score of the year. If rates drop a bit to say, I don't know, how about the 4.5% from 4.68% on the 10 year? That's not an impossibility. We will kick ourselves for not buying this pullback. Rates went down soon after we got that hot survey report last April. It sure can happen again. Don't count it out. Keep in mind we get the Labor Department's nonfarm payroll numbers on Friday. Now this report shows that unemployment is creeping higher or wages are stabilizing, then those long rates are going to come down. This labor report is the single most important set of numbers out there. They are authoritative, they control the dialogue. But what is the dialogue about? I think it's about some investors losing faith in the Fed. These traders are wondering why the heck the Fed cut short rates by 50 basis points. September, they can give me another 25 in November, another 25 in December. What the heck did they see that made them so aggressive? Judging by the data, nothing. The credibility issue. If you claim your data dependent and the data is strong, then why the heck are you cutting so aggressively? And I have to admit, as a huge backer of Jay Powell, I myself am mystified when long term interest rates that are set by the bond market actually went higher after the rate cuts. That was a verdict. It was a nasty verdict. It Was a mean verdict. It said that inflation's coming back, business is too strong, stop cutting. At the very least, the bond guys think the Fed got it backwards. And that's where we are now. We know the Fed can't raise rates here. That would make them look like total idiots. But every time we get a hot survey or report and long term interest rates go higher. There are plenty of people who say that stocks have gotten ahead of themselves. There are others who know only one thing. If rates are going higher, then we're headed for a burst of inflation that will send stocks lower. So sell, sell, sell, sell, sell. And that's exactly what happened today. Now let's go full circle. When interest rates go to levels where they were when stocks were a lot lower last year, two things can happen. Either rates repeal their climb or stocks repeal their gains. And today we got the latter. But this is an unpredictable market. Usually all stocks go down when interest rates shoot up like they did today. Instead, we actually had a hideous decline in our leaders, the best performers tech and actual gains of some stocks that are really beaten up. Like the drugs, the oils, the transports. Then there are other stocks the bank's been pretty good for pretty good again today. Of course, sometimes the market just gets it wrong. The drug stocks, maybe they shouldn't be rallied, but they've been beaten down so badly that they're due for bounce. I think they represent value. However, they should not have gone up on higher rates. I'm betting this rally only a staying power. If we get a soft employment number on Friday followed by good news out of JP Morgan's health care conference in San Francisco. I will bring you that news. I will be there. The transports game again makes no sense. Random oils, okay, oil went up a dollar. Banks. Hey, you know what? That actually makes sense as they actually do better with slower rate cuts. And the survey numbers, well, they say that we got today. They say that's about slower rate cuts if there are going to be rate cuts. That said, the real action today was the decline in the tax, especially the Magnificent seven. You heard about that all day. Now I find that people are quick to bow out of these stocks when inflation works. But can I just say this? Lately over the long term they actually do well in precisely this kind of environment. As their growth is so spectacular they can outrun a rise in interest rates. So don't give up the ship. Does it mean you can buy this decline? Well, is it an opportunity? I would love to say that you should just start buying all the tech stocks that got crushed today. But I know that we are two sessions away from the non farm payroll report and I don't want to step in front of that freight train. The risk reward is terrible because if wages go up or employment goes up and the President Elect picks that day to say that we need to get rolling on the deportations, I mean, he's run the country already. I mean, I don't know, something that will cause major wage inflation, then the market's going to get crushed again, especially tech. I want to step back for a moment. Does any of this really matter long term or is it all just inside baseball? The answer is it does matter. We have too much inflation in the system. The Fed can't do anything about it because it just cut rates. The Fed's in a bind, it can't help us. So we're at the mercy of the macro numbers that are going in the wrong direction. Or put it another way, we need to be lucky. I don't like that. That's not a good place to be. I don't want to be a bear, but I've been talking about how much of this market has been in bear territory for some time. The really hard hit sectors during this period got a nice little bump today. But the big techs, like the Nvidia is the tesl, which I'm now branding a tech. And Palantir, the hottest of the hot, got clobbered today. And these former market leaders will go even lower if the labor department comes in too hot. That report has got to come in. Cool luck. The flimsy garbage stocks sold to you stops. Just stop with those. Blow them out tomorrow morning or you won't be watching me by next week because you'll be gone too. I don't want to make too much out of one session. That's two day traders. But to set up a big employment number coupled with earnings next week does not favor the bulls. We need some signal, some sign that the Fed did the right thing when it cut rates. Or else we'll have more days like today when long rates go up and a lot of stocks go down. We want stocks to represent the fundamentals, not the S and P futures, but an overheated set of macro numbers and some weak earnings aren't going to get order restored. The bottom line, remember, we need real reasons to buy stocks, not a dead cat bounce. And valuations are being attractive. The number one thing we need, we need long rates to go lower. Otherwise it's going to be a long way. And it's long Away game stretch for the bond market and I'd rather us be in the friendly confines of our home stadium watching rates go down and stocks go higher. Lance and Maryland. Lance.

[Caller]

Hey, thank you for taking my call, Mr. Crane.

[Jim Cramer]

My pleasure. Lance, what's happening with you?

[Caller]

First, I'd just like to say I'm a very happy club member and I'd like to send a big thank you and happy New Year to you and your excellent staff.

[Jim Cramer]

I thank you, Jeff and Zev. Jeff has just been amazing. I think this comeback, by the way, in the next tracker is extraordinary and we are taking advantage of getting that basis down. How can I help you?

[Caller]

My question is this company has been through a lot of negative news in the last year and a half off its yearly bottom price of 137A share. My question is, is it time or is it too soon for me to start a position in Boeing?

[Jim Cramer]

I have to tell you I've been impressed with Kelly Ortberg. I think that that I've been pushing them to do that secondary for over 100 points. And you know what? He listened to me and that tells me the guy has got highest compliment horse sense. I'd be barbed, boy. Let's go to Dave. Dave is from Illinois. Dave.

[Caller]

Dr. Kramer, my mad Squid games viewer, do you realize your hurtless Eagles will likely need to get through one of my powerful NFC north contenders to reach the Super Bowl?

[Jim Cramer]

That is it's going to go right through there. Plus Detroit's going to be in a way game and I've got to tell you something, Dave, if you take that that coach for the Chicago Bears. All right. Anyway, what's up, Jim, this $20 billion.

[Caller]

Stock finished last year up 40%. Recently you ranked a firm holdings 13th out of 15 stocks to watch over the last four quarters. Affirm holdings surpass consensus EPS estimates three times. Jim, with the stock down 8% in the month of December but with strong fundamentals. Where do you see this stock headed going forward?

[Jim Cramer]

Boy, Dave, I've got to tell you remember when Max Levchin came on our show on our show with the stock in the mid-30s and he said it's bottom and I could not believe what you never did get these cold shots. And you know what? The stock then doubled pulling back. Count me as a buyer. I am all in Levchin. I'm putting my chips all left him right here. And I know he gets that joke because he's a funny guy. All right, maybe he doesn't have that going for it but he's got a lot of good things going for. Remember, we need real reasons to buy stocks, not just like hey, valuations attractive, let's go to work. But we need interest rates to go a little lower please. On Man Money tonight. American Airlines got a triple threat of upgrades yesterday. So good the stock actually going to continue to go higher. I'm pouring through the research. Nippon and US Steel. What the heck is that? Pushing back and forth. President Biden blocked their merger last Friday. Cleveland joining me to respond to a lawsuit that says basically he's a racketeer. Whoa. Then could tech drive a rally in the year ahead? I'm going off the charts to see if this week may be make or break and you know I'm a little concerned. I say you stay with Kramer.

[Jeff Lewis]

Don't miss a second of Mad Money. Follow imkramer on X. Have a question? Tweet Kramer madmoney Send Jim an email to madmoneynbc.com or give us a call at 1-800-743-CNBC. Missed something? Head to madmoney.cnbc.com hey, this is Jeff Lewis from Radio Andy Live and Uncensored. Catch me talking with my friends about my latest obsessions, relationship issues and bodily ailments. With that kind of drama that seems to follow me, you never know what's going to happen.

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[Jim Cramer]

I've been pounding the table on the airlines for a while now, but even I was surprised when American Airlines caught not one, not two, but three different upgrades yesterday morning. Melius, Jefferies and Cowan. This really caught my attention. Why? Because when you sometimes see multiple upgrades right after a strong quarter, some other analysts There was no news whatsoever here from American. Nothing notable happening in the industry either. So why the heck with three different firms go bye bye bye on the same day? So let me walk you through the research because there may be something going on here that we're missing. Like I told you last month, the entire airline industry has gotten a new lease on light because these companies which were buying new planes left and right have gradually slowed down their capacity increases. In fact, they've been removing unproductive capacity flights that were priced so low that nobody was making any money. Historically, airlines have been terrible about this. When business is good, they roll out new planes, which leads to vicious price competition and crushes the profitability of the entire group. Now though, the airlines are being disciplined and that makes much makes them much more profitable. But it is a highly unusual moment. I'm not used to seeing it. All three of these upgrades cite the removal of unproductive capacity as a positive for the airline industry. But it's important. Remember that these three firms could upgrade American Airlines to buy precisely because they weren't already recommending it. And they weren't recommending it because unlike Delta or you, United Air America's made a series of missteps. Last May, America they had to slash their guidance in part because they cut spending in their sales department, made some third party booking sites ineligible for loyalty points in order to get people to buy tickets from them directly, made it harder for travel agencies to sell tickets. American Airlines got hit especially hard on the business travel side, missing out on that huge comeback for higher margin corporate travel. I feel it couldn't happen, but it's been bolstering the bottom lines of Delta and United. Management is estimating that the loss of corporate travel business alone will cost them $1.5 billion this year. You never like to see this mistakes like this because if management can quickly swallow their pride reverse course that can create a buying opportunity. The analysts that upgraded market yesterday seem to believe that's the case as they all called out corporate market share recapture as one of the reasons for the upgrade. As the analyst Meli has put it, I'm going to quote American at current levels is appealing as we see above, industry unit revenue growth and additional optionality in regaining lost corporate share share, end quote Melius also points out that American is uniquely well positioned to benefit from the industry moving so much unproductive capacity. They note that 70% of Americans revenues come from US domestic market versus Delta 65 United 60 the domestic market is where we've had too much capacity. Mills goes on to say that American will benefit from and I'm going to quote significant overlap with Southwest in Dallas and Chicago, end quote because Southwest needs to raise prices or eliminate unprofitable flights if it wants to succeed in its activist driven turnaround plan. Aside from the capacity issue, the Jefferies upgrade cites additional tailwinds from expected aircraft deliveries. The new planes American has ordered from both Airbus and Boeing are set to have many more premium seats than existing models. That's where the money is. Cowan, which has admittedly been wrong on the stock over the past year, noted that they upgraded to early a year ago and then failed to appreciate the transitory nature of the company's problems when they downgraded back in July. Tough look for their credibility. But Cowan echoes the same sentiment as Jefferies. They think these new jets will allow American to take share in long haul international travel. Now one thing that all three firms seem to be picky about is American's balance sheet, but every single one of them upgrades acknowledge they all acknowledge that they're all willing to look past it. Jeffrey said it best, noting that American can easily clean up the balance sheet as they plan to devote their free cash flow through 2026 to paying down debt where they're already making progress with 13 billion of this year's 15 billion debt reduction goal already completed, which will put their total debt at still $39 billion by 2028. American plans to bring that down to 35 billion where the company would have a leverage ratio about 3. It's not that bad. What else all three firms expressed excitement about American's new credit card agreement with Citi, where Citi will become the exclusive issuer of their A Advantage Co branded car portfolio in the U.S. this 10 year agreement should expand the rewards for Advantage members and Citi branded card members. Of course the exclusivity doesn't start until 2026, but basically they're going to give you an even better rewards program. Melius noted that quote, although the stock has moved past the Citi credit card extension December, the margin upside from additional levers is still not fully appreciated, end quote. Adding that they believe, quote Americans recently renewed credit card agreement with Citi is expected to add at least $560 million in incremental high margin revenue in 2025, end quote. That sounds good, doesn't it? Then they go on. Quote the city credit card revenue in 2025 will be driven by volume increases as Citi markets the card more aggressively then in 20, in 2026, new economics kick in, end quote. That's a good plan. Cowan added quote we do not believe the benefits are baked into sell side estimates, end quote. And I think they're right. So where do I come down on American Airlines? Look, I think all three firms make great arguments, but much of what they're saying applies to the entire industry. It's kind of like the kind of like the cruise industry applies to everybody. And that's why I'm pounding the table on Delta United last month. It's good. As for American could be a good turnaround. But given that the company's reporting later this month, I think it's better to wait and see if management expresses confidence that their previous missteps are really behind them. I'd be a lot more enthusiastic with this one if they did. The bottom line. Look, maybe these analysts know something about the quarter that we don't. But while I'm bullish on the airlines, I'm not confident enough to stick my neck out on a market until we see the earnings in a little over two weeks. Until then, you know what, just stick with Delta United. They've been much better operators and some real good stocks. Bad money's back after the break.

[Jeff Lewis]

Coming up with the bid for US Steel hanging in the balance, the CEO of Cleveland Cliffs talks to Kramer to weigh in on the state of the industry and what a merger would mean for domestic production. Next. Hey, this is Jeff Lewis from Radio Andy live and uncensored. Catch me talking with my friends about my latest obsessions, relationship issues and bodily ailments. With that kind of drama that seems to follow me, you never know what's going to happen.

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[Jim Cramer]

We had a much talked about story here and we needed answers. On Friday, President Biden formally blocked Japanese steel giant Nippon Steel from acquiring The Pittsburgh based U.S. steel, citing national security concerns. And this is one area where Biden and Trump on the same page. But the formal decision to block the deal has set a bunch of things in motion. First, Nippon Steel and US Steel sued the federal government. Good luck there. They also sued rival steelmaker Cleveland Cliffs, along with its CEO and the head of the United Steel Workers Union for what they describe as this is a quote, a coordinated series of anti competitive racketeering activities illegally designed to prevent any other party than cliffs from acquiring U.S. steel as part of an illegal campaign to monopolize critical domestic steel markets. End quote. Basically, they're arguing the Cleveland Cliffs colluded with the steelworkers union to help get the deal blocked. Now this is a pretty serious set of allegations. In response, Cleveland Cliffs published its own fiery press release calling the lawsuit desperate and saying both parties are simply trying to deflect blame. Earlier today, my colleagues walk in the street spoke to David Byrd. He's the CEO of U.S. steel. And now I am eager to hear Cleveland Cliff's side of the story. So we're going to go to Lorenzo Gonzalez. He's the president CEO, been a frequent guest of the show. Mr. Gonzalez, welcome back to Mad Money.

[Lorenzo Goncalves]

Hi Jim. It's always a pleasure being with you at Mad Money.

[Jim Cramer]

Same. Now Lorenzo, I got to tell you, when people charge other people with a federal crime of racketeering, it's not something that can be charged lightly because this is something that people actually go to jail for. I want to understand how someone could say this about you. And I know you're saying that their comments are desperate, but this is a charge that the Justice Department could look into if they keep pressing it.

[Lorenzo Goncalves]

Look, maybe this is influence of Nippon Steel in the legal system in Japan when filing a lawsuit is basically a condemnation for the, the, the defendant. Here in the United States, the presumption of, of innocence is something that is paramount to democracy. We are a country that continue to teach the world how democracy works, how capitalism works and how laws work. It's not just me. The statement coming from the CEO of West Steel called the president of the United States corrupt. As an American, I feel offended. This is just absurd to tell and publicly say on TV that the President of the United States direct cabinet members on how to vote on cfius. This is a serious accusation and I'm sure that the US Government will defend themselves from my side. I'm going to defend myself and we are going to to make sure that things are clarified to the maximum possible extent.

[Jim Cramer]

Did you get lucky here in that I think that it's entirely possible that U.S. steel's earnings are going to be dramatically lower than when you first got interested in 2023 or is this just something. You know what, this thing is so valuable, someone's got to get it and it should be you because you can make the most money with it.

[Lorenzo Goncalves]

Look, at this point situation has changed completely, Jim. At this point tariffs are coming. President Trump will change the backdrop of the entire industry. I'm not so sure if the best outcome is the combination of Cliffs and U.S. steel. Maybe the best outcome is Cliffs states standalone and US Steel stays standalone. And you continue to compete like we have been always doing against the likes of nuclear and the steel dynamics. You know very well this market, Jim. It's a very competitive market. We were happy the way we were. We were forced to do that under a situation that was not the situation we have coming out with President Trump. And what we can't afford, what we can't allow is this tariff jumping initiative from Nippon Steel trying to basically undermine the domestic market from the inside. Japan overcapacity is the problem. China overcapacity is the problem. China learned from Japan can't allow that overcapacity to be the demise of all American steel companies with free money from Japan.

[Jim Cramer]

Why did President Biden, do you think, not act on what we think we know is the transshipment of Chinese steel through Mexico, which has been the reason why the earnings of the US Steel companies have been falling apart.

[Lorenzo Goncalves]

Look, President Biden used his powers as President of the United States after the deal received a detailed CFI's national security review. They actually went not through one but three 90 day periods of review through CFI's, the normal 90 days and two more extensions of 90 days to try to prove the case and to make sure that cfuse would be unanimous and approving with no national security risks. And they failed. They failed miserably. The as far as reports from the press, the CFI members were split in the decision. What means the decision goes to the desk of the President of the United States and the President of the United States used their power and he blocked the deal. The only problem was it took too long. If it were President Trump, this thing would have been resolved in one month or two months maximum.

[Jim Cramer]

Yeah, but I heard the US Steel CEO talk to David Faber this morning. He seems to think that he can convince President Elect Trump to change his mind. I mean, is that, is that delusional?

[Lorenzo Goncalves]

I don't know. I don't know. You've got to ask President Trump. As far as I know, President Trump is a very coherent guy. He has been talking about the damage that Japan inflicts into the United States since 1987. If you go to YouTube, you're going to see a very young Donald Trump talking about Japan. It looks like he's talking today. And on top of that, keep in mind the biggest proponent of cfius from the political world was now Vice President elect at the time, Senator J.D. vance, who sent a letter co signed by Senator Marco Rubio, that is the incoming Secretary of State, so he will be a member of the next CFUs, by the way. And Senator Josh Hawley, another big proponent of the policies of President Trump. They sent a letter to Janet Yelly on December 19, 2023, one day after the announcement of the deal, asking for CFIUS to chime in quickly to do their jobs. On May 9, the same three senators, J.D. vance, Marco Rubio and Josh Hawley, they send another letter at this time to President Biden, basically telling President Biden, President Biden, five months have passed. Use the number, I don't know the number from the top of my head of the statute or number another number of the statute to block this deal. Use your powers. Stop saying you have your bags and things like that. Your job didn't do it. It took too long. That's why we are landing in this strange situation. Okay, we resolve this.

[Jim Cramer]

When you, when you steal was going to earn, when U.S. steel was going to earn $4.64, you were willing to pay 35 bucks for it. It's now going to earn a $95. Actually, it's not going to five. Let's stop kidding ourselves. Maybe it earns a dollar. What's it worth if it owns, if it, if it makes a buck per share.

[Lorenzo Goncalves]

Look, I'm not going to go in this discussion right now, Jim. I think we have a much more important task to, to.

[Jim Cramer]

To.

[Lorenzo Goncalves]

To resolve on this thing. They have until February 2nd to.

[Jim Cramer]

To.

[Lorenzo Goncalves]

To pack and go. That's what the law says. And like I hear a lot, they follow the law. So they have to follow the law.

[Jim Cramer]

Okay.

[Lorenzo Goncalves]

Now asking for is not following the law is asking for a miracle.

[Jim Cramer]

I need your help for one last question. What is the biggest threat facing the US Steel industry right now?

[Lorenzo Goncalves]

Over capacity, overproduction of steel. Biggest problem, China. Biggest mentor of the problem, Japan. Japan taught China overcapacity is fine, particularly if you are a friend. If you are a friend, you can take advantage. You can take advantage of the market, you can take advantage of the workers. You can take advantage of the goodwill of the American people. That has to stop. I'm glad that Biden finally did what he had to do. But President Trump will continue to do it. And they're going to make America great again. And I'm very proud to be part of.

[Jim Cramer]

All right, let's leave it at that. Lorenzo Goncalves, chairman, president and CEO of Cleveland Quist, responding to some pretty serious charges that I think would make anyone angry. I think that all I can say is, Lorenzo, good luck on this. Good luck. Okay.

[Lorenzo Goncalves]

Thank you very much. I really appreciate it.

[Jim Cramer]

Bear Buying is back in for the break.

[Jeff Lewis]

Coming up, stocks wavered in today's session, but are the charts pointing towards a mega cap fueled rally? Cramer is tackling the technicals of tech next.

[Jim Cramer]

Now that the market spent over a month trading sideways digesting the huge post election rally, what are we going to look for going forward? There's a lot of uncertainty in this environment with most of it coming from of course, the bond market. The top of the show. Long term interest rates have steadily marched higher since the Fed started cutting short rates in September. That's made things very tricky, especially after yesterday's hideous three year treasury auction. Today's action, ugh. Sometimes at moments like this you need to step back from the fundamentals, try to find more quantitative approach. Right. And that's why we're going off the charts. With help of Jessica and Skip. First women on the active trader desk at Fidelity. Now director of investor [e-mail] as well as co host and founder of the market make her podcast. She pounded the table mid October, not long before the whole market caught fire. I like that call. We didn't know why stocks would take off in November. At the time we didn't know would be a Trump rally. But inscription analysis told us that good things were possible. Nice. So what does you see right now though? Tricky at the moment, she's noticed two themes. First, the 10 year treasury yield is approaching 4.75%. That is a critical resistance level. If that resistance holds as we Talked about the top of the show. We might not have to worry about the bond market going against us. Second, the semiconductors are turning bullish across the board. I didn't feel like it today, but bear with us. To Inskip that means the tech may be ready to take the lead again. As he sees that this is a recipe for fairly narrow tech driven rally like we've had for big chunks of last year. And you know what? I think we do a lot worse. First though, let's take a look at the daily chart of the S&P 500 inscripts view. The SB needs to overcome a ceiling resistance at 605 right here, which is the level where it set a lower high on December 26th. So we've got to go back to that level. That's up about 140 points where it's currently trading. Otherwise she's watching for a break down below the 50 day moving. That's purple. Okay, a breakdown here which we got to today following by a test of the post election gap up which took us to 5864. You know, so we're kind of, I would say we're in a little precarious area here. Take a look at. There's the post cap up. Come back down. If the S and P can break out above 605, that's that level again. Instagram says that would be incredibly positive sign because it would trigger a bullish crossover in the Mac down here. This is the macd, the moving average convergence divergence line. This is one of the most reliably bullish signals out there. So she wants that to cross over. That would be terrific. Put it all together. She thinks the daily chart is pretty noisy. There are some things that could go right, but also plenty of things that go wrong. You know, sure, we got to break this. That's going to be. I think it's going to be very hard to do. But if we zoom out to the S&P 500 weekly chart, we see a very different picture. Much less noisy. Income has a set of straightforward rules here. She likes to watch the 13 week, the 26 week and the 40 week moving average. Because 13 weeks is one quarter and that's the key unit of time in this business. When all those quarterly moving averages are sloping higher and acting as for support. That tells you we've got a bullish trading cycle which is exactly where the S&P 500 has been. However, if it finishes the week below 5940 which by the way is where the 13 week moving average currently sits. Then Inscape would say we're in a serious breakdown mode. We're below that level right now. But this is a weekly chart and we still got a few days to bounce back. Next. Remember, inscript thinks that given the action, the bond market and the rebound, the semiconductor stocks, we could be in for another tech led rally here. So check out the weekly chart of the Technology Select Sector SPIDER Fund and that's called the X L K. Okay. Tech roared yesterday in the run up to cbs. That's formerly known as the Consumer Electronics Show. But today it's sort of hard. Despite Jason Wang's incredible keynote speech last night. More on that later when you look at the weekly action, the XLK, though InScript notes that has been leading the way for months until the last few weeks when the Tech ETF failed to make a higher high. Inskip was hoping that CES could be the catalyst that drives a breakout to the upside here, but so far that sure hasn't happened. Still, she points out that when you look at the 13, 26 and 40 week moving averages, they're all trading higher, acting as support for the XLK first skip. That means tech still got a bullish trading cycle. I know it sure didn't seem that way. But you can see the charts all right. Right now she sees a ceiling resistance at $241.48. She got a floor down here to 32. Pretty tight here at 237. I'm sorry, keep in mind, that's a weekly floor of support. We broke down beneath that level today. But if the XLK can get back above 237 by Friday, then it will be no big deal. On the other hand, if tech can't find its footing this week, that would be problematic for the chart. Still an instance view. What's happening in tech as represented by the X okay. Is looking much, much, much, much better than what's happening outside attack. Many of these big tech stocks have huge weightings. The S&P 500, because the index is weighted by market capitalization. You've got multiple trillion dollar tech enterprises in there. So to get a sense of what the market would look like without tech, Inscript likes to look at the S&P 500 equal weight index. This is a version of the S and P where every stock is weighed the same. Very unrealistic. But it does show you that it takes away the power of the tech exposure. And as you can see from the weekly chart, the S and P equal weight. Well, let's Just say it's doing terribly. Remember how I talked about the great Bear Market of 2024, 2025? It's the top of the show last night. This is what I'm referring to when you weigh the big tech stocks, the same as everything else, The S&P 500 is getting pulverized. Instagram points out that it's already fallen through the floor. The first two key floors of support represented by the 13 and the 26. The next floor is the 40 week moving average at 6, 9, 9. Oh man, do we ever not want to take that out. Fortunately, inscript says we don't need the S and P equal weight to make a complete comeback here. In her view, tech can carry the whole market as long as the S and P equal weight stops collapsing. As long as it finds its footing at the 40 week moving average. She's betting that tech can take care of everything else for the normal, normal S&P 500. No, it's not this equal weighted thing. So 40 week moving average got to hold here. It's not going to be easy, believe me. Here's the bottom line. The charts as interpreted by Jessica Inskip suggest that we could be headed for another narrow tech led rally as long as ESP can put up some okay performance this week. Otherwise she is less confident in her positivity. And that was really the takeaway for me. I came back thinking, you know what, when she was what a great call. I regarded these as. But you know what, there are some things that could go right and I like that. Bill in Massachusetts. Bill. Hi Jim.

[Caller]

Thanks for taking my call.

[Jim Cramer]

Of course, Jim.

[Caller]

I bought Dupont twice already. I'm a club member. I'm thinking about buying a little more. Could you explain a little bit more about how.

[Jim Cramer]

What, how they're going to spin off.

[Caller]

The water part of it and any other.

[Jim Cramer]

All right, first of all, I agree. Thank you for being a member of the club. I looked at dupont. I was going back over with Jeff Marsh, my partner, of course with the trust. We feel very strongly that the three units will never actually be spun off. What will happen is one will get a bid. I think it's going to be the water business that gets a bid. I think this is one of the few situations where the sum of the parts is worth dramatically more than whole. And like you, I want to buy some. But we feel our area should be 69,70 to buy more. I think the stock is worth $100. Look, the chart suggests we could be headed for another narrow rally led by Tech. But if the S and P can't finish the week strong, they have. Money is back after the break.

[Jeff Lewis]

Coming up, Kramer takes your calls. And the sky's the limit. It's a fast fire lightning round.

[Jim Cramer]

Next. It is time. It's time for the white round. The time my staff first plan is out and then the lightning round is over. Are you ready, sky for the light round Current I want to start with Michelle in California. Michelle.

[Caller]

Hi, Jim.

[American Express]

I'd like to ask about Novo Nordisk.

[Jim Cramer]

Especially as it compares to Eli Lilly. Okay. Novo Nordisk, I think is inferior. They don't have the production capability. They don't have what I think is the best pipeline. And I gotta tell you, Denmark, Geez, maybe President Elect Trump's going to pick a fight with him. I'd be careful. Let's go to William in New Jersey. William.

[Caller]

Thank you, Jim, for having a call for me. I want to talk about Pepsi. Pepsi's been going down.

[Jim Cramer]

Yeah, Pepsi's got. I mean, I read. I talked about that Cornell Business School study last week. It's right in the wheelhouse. I mean, it's talking about salty potato chips. I don't know what to say. Yields 3.73. Maybe when it gets to 4%, but right now it's in the crosshairs of the GOP Dash 1 situation. Let's go to Lewis in New York. Louis.

[Caller]

Jim. Hello, Chile. New City, New York. About a large health care company that made for a $4.6 billion acquisition last week that hardly made the news. The company bought a medical service organization involved in treating eye diseases. It was a cash purchase and it included over $1 billion of debt held by the acquired company.

[Jim Cramer]

Okay.

[Caller]

The company I'm referring to is St. Cora saying.

[Jim Cramer]

Cora Kacho Hawkins. Own. Used to the old abc Mercers. Bergenbergen. I have to tell you, I think that Steve Collins is really, really smart. I met him last year at the J.P. morgan Healthcare Company. Their conference and I got to tell you, I think the stock stock can go lower because a lot of people don't like B. They don't like McKesson. I prefer Cardinal to this one, but I did like the acquisition. Let's go to Sharon in New York. Sharon, hi.

[SiriusXM]

Hi.

[Jim Cramer]

A Happy New Year. Oh, same. Yes, Yes. I watch your show often. My friend Jim. Who? I mean, not Jim. What am I saying? My God. My friend.

[SiriusXM]

My friend John.

[Jim Cramer]

I have that effect on people. Yes. Who lives on the Upper west side. He and me want to know what.

[SiriusXM]

Is your outlook on lemonade?

[Jim Cramer]

Okay. Lemonade Stock is one of those stocks that I'm talking about this show. It's up too much, you gotta let it come down. It's not a joke stock, but it's losing a fortune. Companies that are losing fortunes go over your portfolio. If you own them, sell, sell, sell the house.

[Jeff Lewis]

That was easy.

[Jim Cramer]

And that, ladies and gentlemen, is the conclusion of the Lightning Round.

[Jeff Lewis]

The Lightning Round is sponsored by Charles Schwab. Coming up, Kramer's offering up his key takeaways from yesterday's keynote from Nvidia CEO Jensen Huang and revealing why the stock's moves aren't the be all end all for the future of the G GPU giant. Next.

[Jim Cramer]

If you look at the hideous action in the stock of in video today, you think CEO Jensen Huang offered nothing special at his CES keynote last night or maybe even that he canceled it. But sometimes the stock doesn't tell the whole story, particularly this stock. First of all, the whole tech sector rolled over today, even as other parts of the market like health care, the banks, they held up well. Second, I'd argue the tech stocks were victims of the flailing 10 year Treasury. As I said at the top of the show, finally, this stock was up huge going into Jensen speech last night. At its highs it was shocking. Nvidia managed to open up strongly this morning and it was selling. It only fell from those levels because the yield on the ten year treasury spike. Listen, I'm a stock guy, not a tech guy, not a health guy and not a bank guy. But I am what's called a generalist. I cover many different industries, many different companies. But some stocks I follow more closely than others. Stocks like Nvidia. That means I know Nvidia's capabilities. And as someone who knows about the company, I did find last night's speech pretty darn dazzling. See, last night Jensen took a leap to go much deeper with physical AI, including making humanoid robots and taking autonomous drive to the next level. As Jensen said, quote, everything that moves from cars and trucks to factories and warehouses will be robotic and embodied by a end quote. To me that sounds like the agentic economy where we have digital agents that can do all sorts of things for us and it's all in video. The world will never be the same if this happens. And after last 10, I think it's happening much sooner than expected. That was the takeaway. Jensen talked about the possibly relevant ipc, something that's been considered a bust. He mentioned several uses for Apple's Vision Pro for help care and gaming. Another alleged bust. Plus there are all new clients, clients like Toyota that may want to build out a network using a supercomputer brain in one location and then a brain on board. I know that just sounds like a press release, but if Toyota well capitalized company decides to build out a Tesla like autonomous driving system, it's going to have to buy hundreds of thousands of Nvidia chips. That's good for business. Very added. Now there are always people, plenty of people actually, who own Nvidia for the long term, like trust does. They should be gratified by all these very important announcements. But there's also a huge group of people who own a video because it goes up often by a lot. And the stock went nuts going, going into and immediately after Jensen's speech. These people, many of whom buy call options, not common stock, don't know enough about the company to stay in it when the stock starts selling off. I'm sure they didn't watch the keynote or read the blogs and they're just in it because the momentum, when the momentum turns, they turn to sell, sell, stop. To me this is business as usual, people. While I may not know all the exciting specs that Jensen talked about, as I see it, he assured you that the new industrial revolution is alive and well and coming to you in a very short time. In my eyes, Nvidia stock was brought down not by anything lacking in ces, but because there was too much hot money in the stock. And these kinds of fellow travelers are your worst enemy if you're a shareholder. This decline had nothing to do with the specs from Blackwell or any of Nvidia's other chips. By the Nvidia died a few years ago, but the company, it is alive and well. With a stock that had this kind of move over and over again, it just stands out because the company now has $3.4 trillion market capitalization, slightly below Apple. And to some degree this morning at $153 stock, it was priced for perfection. It closed at 140. The thing is, last night Jensen actually gave us perfection. And that's why Nvidia actually opened up. But other forces intervene and crushed the stock stock. We don't know what the employment number will look like on Friday, but if it's at all soft, today's sellers will be kicking themselves. If you don't already own it, you can think about buying some now, maybe nicely below its all time high and wait until the labor department to buy more. If it comes in hot, you will get a chance to buy this stock lower, maybe much lower. But understand one thing that keynote dazzle the new projects are way ahead of any other company and this new industrial revolution belongs to Nvidia. That doesn't mean the stock can't go down, it just means that you can buy happily by the inevitable pullbacks. Although when they do happen, remember they tend to be sizable and brought about by scared shareholders who aren't sure exactly what Nvidia makes other than sparkling leather jackets and mini Jensen's. I like to say there's always more market somewhere. Problems are find it just for you right here. Mad Money I'm Drew Grammer. See you tomorrow.

[American Express]

All opinions expressed by Jim Cramer on this podcast are solely Kramer's opinions and do not reflect the opinions of CNBC, NBCUniversal or their parent company or affiliates, and may have been previously disseminated by Kramer on television, radio, Internet or another medium. You should not treat any opinion expressed by Jim Cramer as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. Cramer'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 A cancer diagnosis is overwhelming.

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