Transcript
Jim Cramer (0:00)
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Forrest (1:03)
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 Cramerica. I've been with my friends. I'm just trying to make a little money. My job is not just to entertain, but to educate, put in context. Call me 1-800-743- CNBC. Tweet me jim Cramer. Today, I'm going to try out a new theory. When everything's finally got tariffs on it, I think the market will be up a great deal because the last few of our trading partners buy anything from us anyway, so they can't really retaliate. Yep. I'm thinking it may be maybe starting to dawn on people that President Trump is trying to do the right thing on trade. It's just that he's poaching the issue with such rank or flippancy that it's gotten too nasty for the average American to understand. Now, though, as we adjust, bargains are being revealed being created by a trade war that few understand, which is how I think we had a decent day. Dow dipped 83 points, the S&P Vance.49%, and the Nasdaq gained 1.22%. The perception right now is that Trump's tariffs will drive us in recession because our trading partners will shut down American exports. Clubbing entire industries that we have, causing widespread layoffs. The reality sadly, is that we don't export enough stuff to truly be hurt by the reciprocal tariffs. It used to be a big deal when the Europeans slapped the tariff on Jack Dale's, which even though it's made in Tennessee, is owned by Brown Foreman, which is based in Kentucky. That was a big deal because when Kentucky's own center was a powerful majority leader, it meant something. Now it's a pathetic gambit because sales are going down for brown liquors anyway. In the Senate, majority leaders from South Dakota. Look, I've never been a true believer in the gospel of free trade. You know that our trading partners are always trying to get over on us, so I got zero objections to get one over on them. But the President's rolled out this policy ill advised way, creating a ridiculous amount of angst among our own people. Now there's this old fashioned notion that we could have new industrial smokestack plants coming here, or your goods, or we prohibitively taxed. All this could have been done, I think in a quiet way like what's up in Mexico where the President actually got what he wanted. And Mexico is tricky because they actually buy stuff from us. So the question is, can the market truly rally now that we've gotten used to these tariff induced nervous breakdowns, can we ignore them yet, since we aren't going to get anyone to open their markets to our goods anyway, and we are indeed largely a service economy, I don't think it could be all that easy. But I will say this. If the President were to patiently explain to the American people that other countries abuse us, dump their goods on us, and then show again dispassionately how shabbily we're treated, I do think the whole policy would be a lot more popular. Sadly, that doesn't seem to be the Trump way. So somehow this whole fight turns into building some aluminum plants here, even though they're bad for the environment, expensive to run, while our trading partners try to crush Brown Forman stock and doing a good job of it. Yes, I'm minimizing the actual tariff concerns here. But for decades our government sold out American people, American jobs so that we could get our hands on cheap stuff made overseas. That was the bargain. And to be fair, Americans love cheap stuff. Trump wants to reverse this dynamic, but he never explains it that way. Instead he makes it all personal, handles it in the most peculiar way. Hey, 25 this, 50 that. And it's driving people crazy, causing regular hardworking Americans to pull in their spending and worry about their jobs. And believe me, they are pulling in their spending rather quickly because the White House says it's needlessly frightened. Today though, we saw what happens when the President speech a little softer, carries a big stick rather than screaming loudly and clubbing the Canadians, who are generally pretty nice. Come to think of it, most Americans can't figure out what Canada did wrong. Now we thought the 51st Street, 51st State thing line, that was kind of funny initially. Nobody likes it anymore. Not a laugh line. Time to drop that. So let's go back to the stock market for a second. We had a lot of things go right today. First, the consumer price index came in softer than expected. Most of the components that were overheated are actually going down. By the way, that means the Federal Reserve has room to cut interest rates. Second, the Fed may have to cut because of all this hand wringing geopolitical stuff about trade, people aren't spending as much as they used to, which means most retailers are going to miss their earnings estimates or give a weak forecast. Bad for them. But more rate cuts will be good for the market as low. Third, it turns out the reason why we like tech is because we dominate in tech. And unlike else we make, the rest of the world can't do much about it. Although Europeans try to tax out our companies constantly. Trump's trying to stop that too, but everyone ignored it when it was announced. Now because of the smoke screen of of Canada's electricity surcharge, we forgot what we like. Companies that actually do dominate the world are tech companies and we started buying them again. Fourth, we're most likely not going to get into a serious recession because the Fed can take action to prevent that. And even if the Fed does nothing, the market can recover once all this tariff stuff is behind us. And it will be behind us at some point. So it looks like all the buying of those recession proof stocks has been going on. The JJ's, the Proctors, the Cloroxes seems to run its course. When those stocks ran, the industrials all got clocked. We see today that the inverse is true too. Money's falling right back into the stocks and do well in a decent economy. Now I know the President said I quote what I have done, but I'm sorry quote what I have to do is build a strong country. You can't really watch the stock market, end quote. Today's positive action implied that Wall street may be thinking maybe we don't have to watch the White House. Of course there were some stupid things that happened Today, the momentum meme stocks, the Palantirs, the App Lovens, and yes, sadly, the invidious all went hard. As did so many stocks and companies that make no money whatsoever. The ones that are just about nuclear energy or space or time travel, I don't know. Boy, it was great to see the air come out of some of those for the last couple of days. But they're back. The retail stocks, which are hostage to Rancor's talk about aluminum and rebar still cascading lower, though. And there's some a sense of manufactured unease here that's incredible versus a France, Germany, Spain, Sweden, Switzerland. Their stock markets are so far ahead of us that I'm getting embarrassed. The Europeans are running circles around us for the first time in 15 years. We should be ashamed of ourselves. Maybe we're too focused on rebar and aluminum cans. Oh, and can we please stop talking about William McKinley? I mean, put him on a new $200 bill. Forget about him, okay? Or talk about the guy to 10. He was the first pro tariff leader. This Trump really want to be the second coming of Alexander Hamlin. Kind of a cool guy, but, you know, didn't work out. Listen, I know we're not out of the tariff woods. The President won't let that happen, even though he could make a lot more progress by going about things quietly like he did with the great success that was Mexico. But I do know that nearly everyone on Wall street thought Trump would be a champion of American business. Now, I feel that only Elon Musk, the richest man in the world, is having any fun. Everyone else is just scared, not spending. Bottom line, in the end, we'll probably need Fed Chief Jay Powell to save us, even as that's probably the last thing he wants to do. Hey, let's go to Forrest in North Carolina. Forrest?