← Mad Money w/ Jim Cramer
Mad Money w/ Jim Cramer
Mad Money w/ Jim Cramer 4/6/26
00:44:18
Listen to Jim Cramer’s personal guide through the confusing jungle of Wall Street investing, navigating through opportunities and pitfalls with one goal in mind - to help you make money. Mad Money Disclaimer
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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 Crane America. People want to make friends. I'm just trying to make a little bit of money here. My job is not just entertain, but to educate you. So call me at 1-800-743-CBC or tweet me Jim Cramer. People are starting to say that looking back, maybe the S&P 500 bottom on Monday, March 30th when it hit 631 6, oh, that was the low. And lots of people are saying it's time to call the bottom right here, right now. And you know what? It's certainly possible. But what I want to do is walk you through what caused that low so that if we're ready, we're ready. If we get another big decline right as the war against Iran could escalate, I need you to know what to do. Notice I said if because it's very hard to call a bottom in a market where the variables are the plans of the President Trump and is ever running Iran today we can certainly set the stage of what happened at the lows last week though. So you'll be ready even as this now feels like a very different market today with the Dow gaining another 160, the S&P advancing.44 and the Nasdaq rising 0.54%. First, you have to recognize no matter what you heard today that the supposed bottom last week was not caused by anything related to stocks themselves. The bottom was caused by interest rates. Specifically on Friday March 27th, the 10 year treasury hit an 8 month high of 4.482. And that was really scary to people. But last Monday rates dropped and they dropped very hard to around 4.3%. That's a big percentage move that happened despite the fact that oil actually went higher that day. The first time we saw the divergence in this terrible stretch, oil up and rates down, that was the shock that caused the bottom. What happened that day to make that impossible story change? Did President Trump say something? It brought the war closer to a conclusion. Did the Iranians capitulate somehow? No, nothing like that. Not at all. What happened was Fed Chief Jay Powell gave a talk at Harvard on Monday, March 30 and he took a lot of people by surprise to file bonds at least. He said that inflation expectations are grounded even as the energy prices rise. He said the central bank doesn't need to respond to this oil shock with higher interest rates. He said that the Fed will look beyond the short term gyrations of the energy market. And he said that the federal funds rate, the one set by the Fed is a quote, good place for the Fed to sit and observe. That was a monumental call as it was overlooked by stock traders. It meant everything to bond traders and was more than enough to stop the decline. Rates were going lower. Why? Simple. As recently as that Friday morning before the Monday talk at Harvard Joe, traders were wagering to be better than 50% probability of a quarter percentage point rate hike. Not cut, hike and increase. Because that's what the Fed's supposed to do in costs, get out of control and inflation is creeping back up while employment steady. Kind of exactly what we have. Powell busted that thesis. Planet Simple. The traders were onto something very big. They knew that the Fed chief was taking a rate hike off the table not just for last week, but for the April meeting. And then, well, that's the end of power in June. Kevin Marshall be Fed chief. He, he's Trump's pick. He's not a marionette. But we know that like the President, Wash thinks the economy needs a push. We had good employment numbers reported just Friday, right? Good Friday. Market stocks were closed. They were much better than expected. But with Powell taking the possibility of a rate hike off the table, we don't need to worry about the labor market being too strong. And that's how important Powell's comments were to bonds, to oil, to and most importantly for you to your stocks. Now if we step back we realize that as much as the war dominates the headlines as much as the President says that without a deal that will include the reopening of the Strait of Hormuz he will take out Iran's power plants tomorrow night what really matters the stock market is plain and simple interest rates. What did the bottom not encompass? It didn't matter for instance what price of oil truly goes to the Fed was more important. Now I'm sure if oil were to go to 15160 from here we might get a different totally different view from the Fed. What can I do? But anything in this range won't matter. It didn't matter what the President said either. We kept thinking that his threats, his bomb Boston challenges even a stone age comment directly related to the stock market. Nope, they haven't moved markets. Maybe he's not believed anymore because he keeps changing his mind. Iran closed the Strait of removes does well let's say that does matter but compared to interest rates it's not that important. I'm putting this out because I think most people watching don't understand that the bond markets in charge of the stock market even in a time of war rates are especially important when so many investors are caught leaning the wrong way betting that rates are headed higher if rates are set to go up. If the Fed were to tack on a quarter of a point because of oil I think it's safe to say that we'd be in the grips of a vicious bear market and we've seen these before when other Fed sheets have raised enduring an oil shock the retailers, the homebuilders, the banks, the equator health care sensitive interest rates would have been crushed. The utilities just annihilated airlines that big move in the health insurers that we see tonight because because of higher rates being given by the by the federal government that would be rolled back tomorrow. Let's go beyond the March 30 lows. Every day there have been more threats by our president by post Moran but we rallied every day last week since the lows and we rallied again today despite the President's plan to attack Iran's power plants and bridges in order to force them to capitulate. The none of that mattered to the stock market because rates are staying low today the 10 year held at around 4.33 that this week we have almost no earnings reports. I'd say that as long as rates stay benign and we had no reports I think we look back and say that there was a Bottom. Now the real test will come the week after when we begin to get earnings. We're going to react to those earnings and it's entirely possible we could have some real blow ups. There haven't been enough earnings reports for us to be able to make a judgment about what's happening and what the worst on the economy. There's certainly large numbers of companies that will give us good earnings paired with bad out looks. Because of the war, there are plenty of headwinds. We have inflation picking up. We still have the trade battles. We need to worry about private credit. Even as I think that the private credit scourge can be contained. Most tech companies don't report till next near the end of the month. They won't be a factor. Still, I want to make it clear that the market bottomed because the 10 year didn't punch through 4.5% not because of where in video traded or Microsoft or Apple. That's why for the duration this war I'm going to check the 10 year first, then the price of oil and only then the stock resurge. Here's the bottom line. If we see oil go up and rates go up, well then I think we haven't seen the bottom. But if rates stay tame then last week's lows could represent a real firm bottom and we might be able to buy the stocks and companies are due to report. That means the banks first up may be the best here. They could surprise with some excellent mergers and acquisitions and some good news about IPOs down the road. I like a bunch of them. Check with the Travel Trust. Lot to buy. Could be Jamie in Florida. Jamie. Yes, Jim. Is now a good time to sell off BP oil and take the gains? I think it is actually. I think you've had a really really good move. It's been a parabolic move. I say kaching. Kaching. Let's go to Bob in Florida. Bob. Thanks Jim. And just to start off, let me tell you, you play an important role in steadying the waters for us retail investors during this these unpredictable times. Thank you. Thank you. I always wonder, I mean, you know, relevancy, niche scale, what am I doing? I get a call like what you just said, I feel terrific. Let's go to work. All right. Well, I took a position in Capital One back in Q3 last year. Loved it in January when it hit 52 week high. I've been in the house of pain ever since. What I'm looking for is any should I be optimistic over the next 12 to 24 months? For I want you to be very optimistic. They have enough money to do a buyback. They're going to be finally merged correctly with the Discover. They did make an acquisition that kind of threw people off, hurt the stock. Plus, of course, the Trump talked about how he ought to put a top on 10%. That was really bad for them. I think that's gone away. I think Capital One is my absolute favorite stocks. I said so this morning in my in our broadcast with Jeff Marks. I say you're on a good one. I want to go to Lou in Florida. Lou. Hey, Mr. Jim, thank you again for taking my call on my past call. Love it so much. Oh, I'm so glad that you're on the show. Thank you so much yourself. It's great. I was going to ask your view on Verizon and also versus AT and T is a choice. Well, I mean, I got to tell you, Verizon's actually got some game here. It's got a new CEO. It's starting to move up. I care for Verizon. I think it's well behind the market. I think you got a good idea. I'm not kidding. One of the best ideas around, frankly. Okay, if rates stay tame, then last week's lows could represent a real bottom. That's what I'm trying to communicate to you. It's interest rates that are in charge. And then we might be able to buy some of the bank stocks, including, by the way, Capital One that we just talked about on MY MONEY tonight. We were off for last week's labor board. So I didn't get a chance to give you my take on the most important piece of data we get each month. I'm breaking it all down for you next. Then Tesla's latest deliveries. Oh, wow. Right. Well, below I'm digging into all the numbers from the EV maker and a huge food distribution mergers in the works. But Wall street doesn't seem all that thrilled. I'm getting the latest straight from the source when I sit Cisco, the Syy kind. So stay with Kramer. Don't miss a second of Mad Money. Follow imKramer on X. Have a question.
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Tweet Kramer Madmentions.
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Send Jim an email to madmoneynbc.com or give us a call at 1-800-743-CNBC.
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Missed something.
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Last Friday we got the monthly non farm payrolls report for March and it was surprisingly better than expected. Unfortunately, given what we are right now, a strong labor board is not what we want to see. Next month we get a new Fed chief, Kevin Wash, who's eager to cut interest rates. But with the robust job market, it's much harder to justify that kind of policy, especially when the war with Iran has caused surging commodity prices all over the place. Even if you know war sees great sense in lowering rates because some industries, like housing, certainly need them now. Heading into last Friday morning, we had months of soft job numbers. That was the best argument for why the Fed should start cutting rates again following three rate cuts at the end of last year, after averaging a monthly gain of roughly 122,000 jobs in 2024 and seeing no negative job growth months that that year. Wow. We managed an average gain of less than 10,000 jobs per month in 2025, and we had net job losses in five out of 12 months this year. January started out on a positive note, big monthly gain, but February saw another big negative number. Also, after the unemployment rate bottomed out at 3.4% in early 2023, it's drifted up into the mid 4% range, now reaching a four year high of 4.5% late last year for settling back in the 4.3 to 4.4 range. Of course, in a vacuum, that's hardly an alarming unemployment rate. For most of my adult Life, anything below 5% was considered full employment. But if you're incoming Fed chief Kevin Marsh and you're searching for a reason to cut rates, after all that's the reason why President Trump apparently appointed him then. A softening labor market makes your job a heck of a lot easier. In fact, you could argue that the lack of momentum in the job market is more important than all these war related price spikes. Because in theory the war is temporary. But then we get these March unemployment numbers and they're really good, although not good enough to put a rate hike back on the table. But we don't need more of these. If you want a rate hike now, you might get a rate hike. If you keep getting strong numbers. The economy added many more jobs than expected. March. With the nonfarm payroll up a seasonally adjusted 178,000 jobs. That was roughly triple the Dow Jones consensus estimate 59,000 job increase. And in fact, it was the best single month of job growth since December of 2024. In addition to the first pass of the March numbers, the February change in nonfarm payrolls was Revised down to negative 133000. That is worse than the original result of 92,000 job losses. the same time, the January result was Revised higher by 34,000 jobs, up 160,000 jobs. Combine, the three month average was just over 68,000 jobs created per month. Well, look, that is the best since early last year. In absolute terms. These really aren't great numbers. Okay, but they're more or less fine and they represent a big improvement from last year. Plus, the official unemployment rate ticked back down to 4.3%. Now there's some important context behind both the weak employment numbers from February and the much stronger numbers that we got in March. First, the biggest contributor job growth in March was was the health care sector. Curious. It added 76,000 positions and a big chunk of those gains were from workers who had been on strike at Kaiser Permanente. It's a giant health care system in California in February. Finally returning to work. Plus, the weather was particularly heinous in February, so the employment situation naturally improved along with the weather. I do think we could see some revisions downward. Which is why I don't think the big rate cut thesis should disappear. What else matters here? First, while the overall jobs market numbers tell much of the story, over the past few years I've noticed a steady increase in the median numbers of works of weeks, median numbers of weeks that people are unemployed. Second, after it plateaued last year, we've seen a sharp decrease in the overall employment level since the new year began, with more than 1 million jobs disappearing just in the first three months of 2026 now that hasn't caused a spike in the unemployment rate because. Because many people have stopped looking for work and many others have been deported. Putting it all together, I think we're looking at a very complicated labor market. Despite some of the headlines that you'll see. We don't actually have widespread layoffs resulting in huge jumps in unemployment. But we also just aren't seeing much hiring in the aggregate. And if you do lose your job or are just entering the workforce for the first time, this matters. It's getting increasingly difficult to find work now. That's only natural given the rise of AI in corporate America. Something is finally starting to be reflected in the numbers, although in a more subtle way than you might expect. I don't see big job losses yet because of it. But what does the March nonfarm payroll data mean for the broader market? Listen, I don't want to be negative after hearing that we just had the best job support in 15 years. In general, I like hearing that. And I like hearing that unemployment rate would sit at 4.3%, which in the grand scheme of things is a very good number. Having said that, if you were someone who was hoping that we'll get new waves of rate cuts once Fed chief Kevin Marsh takes over next month, last Friday's report was not a positive development because it's very hard to convince the Open Market Committee to cut rates when we've got healthy job creation. All sorts of supply shortages. Typically the Fed doesn't cut when unemployment rates sits at 4.3 and the price of oil is in the triple digits. Personally, I think more rate cuts could really help deduce the labor market, which is weaker than the headline numbers might add from this latest report and certainly make you believe. Obviously incoming Fed chief wash noses and he can tell a story that justifies cuts. But it won't be easy. Of course, as I made it clear at the top, stock buyers sure want them or else we wouldn't have bottom last week when long term rates went lower despite the fact that oil was higher. The bottom line, this complex issue. If you want the Fed to start cutting rates again like I do, the last thing we need to see is solid job creation. Especially when we're also dealing with an oil price shock as well as shortages in fertilizers, key materials and plastics and some industrial gases. As long as the labor market looks okay, it'll be very difficult for Kevin Marsh to gift us with those rate cuts. Maybe if peace breaks out in the Middle east, possibly facilitated maybe by a Pakistan trying to orchestrate a cease fire that could change the rate calculus. For now though, I say don't hold your breath unless you think that the Fed independence will be a thing of the past. Complicated story. You got to know it. That money's back after the break.
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Coming up, Kramer's crunching the numbers from Tesla's recent production and deliveries report to
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see what it could mean for the electric carmaker next.
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This is a tricky moment for Tesla. The core business, electric cars has been in decline for years. That hasn't done much damage to the stock yet because the shareholder base believes in Elon Musk's vision of the future, his plan for robotaxis and humanoid robots. But the crop is just keeps getting worse and once SpaceX comes public later this year, I think people are going to have a much more exciting way to play Elon Musk's vision. Last Thursday Tesla port its first quarter deliveries which came in at 358,023. Now it's up about 6% over year. All right, but well below expectations. The company compiles its own set of consensus estimates every quarter and this time people are looking for north of 365,000 units. If you look at what the analysts were talking about, it was more like 370,000. Whichever numbers you pick, Tesla fell short. At the same time, Tesla's production rose nearly 13% year over year to over 408,000 vehicles. Now, typically you don't want to see production in increasing at a much faster rate than deliveries because that suggests there's a lack of demand for the product and you might need to mark down your merchandise in order to sell excess inventory. There was one more number we got that didn't get as much attention, but it also is important. Tesla said that IT had deployed 8.8 gigawatt hours of energy storage products. Now, Wall street was looking for something closer to 14.4% gigawatt hours. So we're talking about a major shortfall here. Bad oil deliveries are real bad energy storage, I mean, I got to tell you, I was really disappointed at the latter, which had been a saving grace for a while. Keep in mind this is really nothing new though. Tesla's seen declining auto deliveries for two years now. Their car business peaked all the way back in 2023. Tesla's overall sales peaked in 2024, just under 98 billion before falling 3% in 2025 to below 95 billion. And Tesla's earnings peaked way back in 2022 at $4.07 per share for falling 23% in 2023, another 22% in 2024 and another 31% last year. Buck 66. That's almost a 60% decline from 2022. This were any other company in the world, these numbers would have just been devastating for the stock. But it's not any other company. It's Elon Musk. Tesla probably own it. Shareholder base believes in Musk, you believe in Musk. Stock had been doing basically nothing from 2021 to late 2024. Exploded higher for the presidential election because at the time Musk was tight with Trump. We figured he could get major support from the executive branch for his robo taxis and then his robot business. Stock did pull back hard early last year, falling more than 50% in just a few months as investors priced in the impact of Trump's Liberation Day tariffs. After Tesla initial recovery post Liberation Day and another quick sharp pullback in early June when Musk gets some very public disagreements with the White House. Betsy. They reconciled and Tesla shot up to a new all time high just before last Christmas. But now the stock's under pressure again. Tesla fell 5.4% last Thursday in response to disappointing deliveries. Another 2% today. It's now down nearly 22% year to date. The House of pain so what's going on here? Are shareholders finally reacting to Tesla's deteriorating fundamentals or something else going on? You know what? I think it's both. First, let's talk about the fundamentals. The consensus estimates for tests for 20, 26 and 27 indicate that the analysts and investors do in fact expect sales and earnings to start growing again both this year and next year. I doubt we'll be happy if the company can't deliver. Of course, the first quarter 26 production deliveries results did show year over year growth, which is positive. But it still was disappointing to see deliveries fall short of expectations in the first quarter. Again, really, I think the issue here is that Tesla needs to show some more progress for what Musk considers the future of the company, which is Robo Taxis. There's only so long that the stock can trade on hopes about the future. Before we fall back to car sales. They finally launched the robotaxi business in Austin, Texas. They're already starting to expand. We also need to see some sign that humanoid robots are really on track to hit the market by the end of next year, as Musk has predicted. I want to order one. At the same time, it'd be nice to see some indication that there was real demand for these things. I think there is, but for now there's no way to determine if that's true. Without more progress on robotaxis and robots, all we're left with is this deteriorating auto business and it's really starting getting people to think, is this a dangerous stock? Starting to hit harder because Elon Musk Space X intends to come public in the not too distant future, maybe this year. I suspect that Musk's fans might be inclined to swap out of Tesla and swap into SpaceX once they have the opportunity. Now, I'm going to get into this in more depth later in the show, but for now you need to understand that when you get huge IPOs like we expect from expect from Space X OR anthropic or OpenAI investor open air investors will need to sell something in order to participate in these deals. I think this is really acute for Tesla, which is currently the only publicly traded stock for investors who want to bet on Elon Musk starting in June or whenever this SpaceX IPO happens, that's no longer the case. And if Tesla continues to function more like a play on the declining electric vehicle business, rather than a better robotaxis and humanoid robots, then that choice becomes much easier. People will just buy Space X, which is a plan on space, satellite, Internet and AI. Through the X, a subsidiary that's now been folded into Space X. If you're going to bet on Elon Musk, why not bet on his fast growing space business rather than its deteriorating auto business? Seems pretty straightforward to me. So here's the bottom line and a pretty chilling piece here. Tesla's underwhelming production and deliveries results last week will serve as a good reminder that the core auto business is not doing all that well. In fact, it has been doing well for a couple of years now. So far, that hasn't really mattered to the stock as investors have been able to look past the current weakness and focus on Elon Musk's vision for the future. But that only works because Tesla's got scarcity value as the only publicly traded way to bet on most brilliance. With the Space X IPO on the way, Tesla's about to lose that scarcity value. And when that happens, I expect the stock to keep drifting lower until they either make more progress in robo taxis or the core business finally turns around. Let's take questions. Let's go to Tom in New York. Tom. Hey, Jim, good evening. Good evening, Tom. Thank you for calling. Thank you. Quick shout out to your crew, your excellent crew there at Mad Money. Jim, you're fantastic. Very good guy. Absolutely great. Thank you. Okay, I have a large holding in our club favorite Boeing, but my question tonight to you is on an adjacent stock. All those planes Boeing is putting out, don't they all need at least two engines each to keep them flying? So my question is on GE Aerospace. Well, I think GE Aerospace, remember, does make most of its business doing maintenance. So people were selling and thinking that maybe there'd be less air flight because of the problems with TSA and tsa, but also fuel and rising costs. I think they won't. I think the stock is a buy. I do like Boeing more because Boeing's a little more depressed, but gee, is Larry Coal. I think you've got to go one. All right. Tesla's delivery numbers are a reminder that the core auto business isn't doing that well. I think the stock could keep going lower now. Much more money, including my Susan with food distributor Cisco. Then hotly stated IPOs like OpenAI and SpaceX are set to shake up the public markets. But how will the changes affect your portfolio? I'm giving you my take on new wave of supply and oil calls Rapid Fire. Tonight's edition of the Lightning Round. So stay with Kramer. Last week Cisco Corporation, Spy, Wykind made a big move and Wall street doesn't seem to like it. The food distribution kingpin announced it is acquiring Jet Row restaurant depot for $29 billion in cash stock. Cisco plunged from $81, $69 in the news and while it's rebounded to $73 today, it's still down. I think this is nuts and I say that as someone with experience. Both is an innkeeper and a restaurateur. If you're a restaurant, you go to Cisco to keep yourself supplied long term. Jet Room meanwhile is where you go when you're in a jam or if you own a small scale restaurant or an inn. It's got 166 locations across 35 states. You combine both these assets in one company and you've got the entire restaurant industry over barrels. Perfect. According to management, this deal should increase their revenue by 20% and their free cash flow by 55%. Cisco says it will result in mid to high single digit increases just in the first year and a low to mid teens increase in year two. Plus even before we learned about the merger, Cisco was doing incredibly well. That's why I think this stock such a steal after the sell off. Don't take it from me. Let's check in with Kevin Harrigan. He's the chairman and CEO of Cisco Corporation. He got a better sense of the deal. Mr. Welcome back to Mad Money. Jim.
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Thank you for having us on the show. It's great to be back with you. We're excited to talk with you about this transformative acquisition of Jetro Restaurant Depot. So over to you. Let's jump in.
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Well, why don't we start by saying, Kevin, what did Wall street get wrong about the deal?
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As you know, when there's a big deal like this and it's surprise news, there's a reaction to the company doing the buying and then there's a reaction on the company being bought. In this instance, it's a privately held company and the main message we've heard back from investors is we're not really sure what this business is and it is one of the biggest, most profitable privately held companies in the space. We've called it the Costco for restaurants. Jim, you know it well. They're the place you go if you're a smaller restaurant desiring to save money. They are the low cost leader for restaurants needing everything you need to outfit your kitchen. So that was the thing is this big company that no one has ever heard of. As the week has progressed, Jim, even into this morning, the more we're talking about this gem of a company this amazing asset, as you said, it's now 167 stores. They opened a new store in San Antonio, Texas last week. They bring the lowest cost operating model for restaurants on average. Jim, you can save 15 to 20% on what you buy if you go to Jetro Restaurant Depot to pick it up versus if you have a company like Cisco deliver it to you. So we're very excited about the deal and love to tell you more about it.
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Well, you know, Kevin, I have, I thought when it first happened, I said to my staff, wait a second. If any one of these analysts has ever run an in, run a small restaurant or run a larger restaurant, they would know what a perfect fit this is. As a matter of fact, I was thinking when you first start out, you go and make a deal with, with Jet Row. But as you get bigger, you want to have a, you have to have a consultant and you have to work with that person and that's when you use Cisco and that this is a natural evolution. Start story.
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Now, let's talk about exactly what you just said, which is better together. Let me first say mostly serving different customers in different channels. So the cash and carry channel is, as you said, a smaller restaurant seeking value. And there's no place you can go in that space better than Restaurant Depot. They have the broadest assortment, the best prices in the industry. And we know we can help bring that format to hundreds of additional communities across the country. That's something we announced last week. If you're a bigger restaurant or you're successful and you open a second store, third store, four store, that's when it's really complicated to have to go to a cash and carry and pick it up and shuttle it around to your different businesses. That's when you can engage a company like Cisco. As we work together as one enterprise, here are some hard hitting things we can do to help each other. We know we can buy better. We can bring our purchasing scale together to go to a common supplier group to acquire even better, more efficient prices. We can then pass on those savings to our respective customers in both delivery and at the store itself. That's number one. Number two is what you said. There's customer migration over time. So you can start as a smaller customer and graduate up to delivery. We can lock that customer in. But then as you've brought forward previously on other snippets on your show, you're a bigger customer. You get delivery twice per week. Let's say it's Tuesday, Thursday, Saturday night, your restaurant was busier than you thought and you run out of something that's a I need it now capability. If your next Cisco delivery is not for two or three days, that person's in a bind that restaurants in a bind. With 167 restaurant depots, we're going to take it to hundreds more over time. We could do click and collect, have the customer pick it up at the store. We could shuttle it from that local store same day over to the restaurant, solving more needs for customers, bringing more affordability to more customers than bringing that low cost model to hundreds of additional communities around the country.
- [33:33]
B
Okay, so Kevin and I think it's very clear these are both very inexpensive and I know the Restaurant Depot very, very inexpensive. But I wanted to get a sense of something that's going on that I'm worried about. We do have a situation with fuel and you have had to put through a fuel charge. Is it reasonable to think that the food that we get at restaurants may have to go up to cover the fuel charge?
- [33:59]
C
It's a great question. It's a volatile world that we live in. There's a lot going on. Fuel at $4 a gallon, not good for end consumers, not good in aggregate for businesses mostly. Jim, we are hedged, so we are predominantly hedged. Approximately 90% of our fuel costs are hedged. So for what nominal fuel surcharge that we have had to put in place, it has been for that 10%, that tail of the assortment. So we're in a solid place. Our procurement division does a wonderful job of decreasing those types of risks and we can manage it across our three different customer types, which is large customers, medium customers and smaller customers. But back to this Restaurant Depot opportunity just for a second. One of the things our board is most excited about is the resiliency of Restaurant Depot. Specifically. Jim, get these stats. They've grown sales 28 out of 30 consecutive years. They've grown their profit in 30 consecutive years. That includes Covid. And the why is this? If you can save 15 to 20% on your food costs versus delivery, whenever the time gets tough, whenever the going gets tough, customers tend to flock to that lowest cost operating model. Now that's going to be a part of the Cisco ecosystem. We're already a resilient company serving hospitals and hotels and government facilities and schools. Now we can anchor in another resilient part of our business which is this recession proof cash and carry business.
- [35:22]
B
Now I think that there are people who may think, wait a second, why do you need Restaurant Depot? There's Costco with incredibly Low prices. But in the research that you put out, it is clear that Costco has that great treasure hunt. But that's not necessarily what you want. You if you run a small restaurant,
- [35:39]
C
first let me say we have nothing but respect for Costco. I think they're the best run retailer in the world. They're an incredible, incredible company. Restaurant Depot is the Costco for restaurants. Think about, we've all been to Costco. You walk in, there's mattresses and TVs and apparel and yes, there's food, but 90% of the food is for us, for consumers, for our homes. They do have some industrial pack sizes, but on average they have about 110 of the assortment that Restaurant Depot would have. You walk into a Restaurant Depot, it's a warehouse sized store, a no frill shopping environment, and if you're a restaurateur, literally everything that you would need to outfit your kitchen, including equipment and supplies, is under that one roof. Equal pricing to what you could see at Costco, but an assortment, breadth and depth that is just unrivaled. Here's a stat that is incredibly compelling. If a restaurant is within 30 minutes of a Restaurant Depot location, they do twice the business with local mom and pops than we Cisco do in delivery. And we're number one in the food delivery space. That just speaks to that like magnetic draw of customers because that 15 to 20% cheaper price is so attractive to the end customer.
- [36:47]
B
One last question. Will I still have to wear my down jacket when I go shopping at Restaurant Depot into that fresh food and fresh fish area?
- [36:58]
C
It's cold for a reason. You got to keep the product fresh. Let's start there. If I could just lean into an even harder hitting question, Jim, is a lot of stuff being said on social media? Cisco bought Restaurant Depot to raise prices. Let me just be crystal clear, we are not raising prices at Restaurant Depot. The entire strategy here is to bring Restaurant Depot, the low cost operator, to hundreds of additional communities, helping save tens of thousands of restaurants more money. This is about bringing the value of opportunity to more customers. And one more just plus point. Restaurant Depot has a fantastic opening price point product line of value tier, if you will. That's avoided in the Cisco delivery assortment. So we've got some high end restaurants that want premium fish, premium proteins, premium produce and the like. But they don't care about the shortening that's going in the fryer. They should care, but some of them don't. They just want the cheapest product available. Restaurant Depot has some great items, Jim, that we're actually going to intend to offer up to our delivery customers enabling us to grow share of wallet with the delivery customer as well.
- [37:56]
B
With inflation we'll be able to keep those prices that low. Really can think you can do that?
- [38:01]
C
I think with the combined companies purchasing leverage or efficiency we have even greater opportunity to partner with our suppliers, provide them a growth opportunity. Restaurant depot is growing 5,6% revenue every year opening 5 to 6 net new stores per year. We Cisco are doing very well taking share and delivery suppliers like that. They're looking for places that they can grow. They invest with those partners. We are going to work extremely hard to keep prices low, bring prices down and bring lower prices to hundreds of additional communities through this acquisition.
- [38:33]
B
Well, thank you Kevin. You know I'm a believer in what a great opportunity to buy this stock as Kevin Hurricane chair and CEO of Cisco Corporation. Sy Kevin, I I love having you on the show. Thank you.
- [38:44]
C
Thank you Jim. Have a great day.
- [38:47]
B
Coming up, you've got questions.
- [38:48]
C
Kramer's got the answers.
- [38:50]
B
Get charged up for a fast fire lightning round. Next. It is time to talk about light round cuz Redford rapper cost send the stock 10 about myself put no cord ahead of time my step prayers the grandpa something about you playing sound and then the lightning round is over. Are you ready Ski dag time. Let's start with Joe and Hawaii Joe. Aloha Dr. Kramer and I will give you a big booyah as an Air Force retiree. Although I know you prefer the Navy SEALS booyah thing. It's all good with rescue. All good with combined rescue this weekend. That was incredible. That was incredible. Okay, how can I help? I heard your. I heard your. Yes, thank you. I heard your somewhat alarming analysis of the SpaceX IPO. The synopsis you gave last week go Artemis too. But do you think that Sats is a good proxy for SpaceX? Coming up on this milestone, I got to tell you, I think it is. It's moved so much but I still think it is a great proxy and I'm going to hand it to you for actually even thinking to throw. I appreciate that and thank you for the kind words. Let's go to Eric in Nebraska. Eric. Hey. Booyah. Jim. Oh man. What's up? Omaha from Omaha, Nebraska. Looking to be the next oracle here in town. You know what I mean? So yeah, looking at. Looking at tmc the metals company. No, keep looking, don't buy. That's electric vehicles and we unfortunately those are no longer. How about in vogue? That sounds pretty rash but in vogue. Let's go to Debbie in Georgia. Debbie. Hey, Jim, thanks for taking all our calls. First of all, it's so cool that
- [40:38]
A
we can call in, pick the brain of somebody at your level. So thanks for that.
- [40:41]
B
Well, I'm happy to ask you about is.
- [40:45]
A
I've been keeping an eye on this for a long time since you've recommended
- [40:48]
B
it in both your book and on the show many times. And I just haven't found the good buy in. What would you recommend would be a good, good buy in price for Enbridge? Oh, my God. Right here, Right here. You buy something and hope it goes lower. That's how good it is. And you're absolutely right. I mention it in the book. It's really for everybody. Not just for retirees. It's for everyone. Let's go to Karen in Florida. Karen. Hi, Mr. Kramer. I just started watching your show about two months ago and I really like it. It's really important. Thank you. I want to ask. I wanted to ask you about a stock I just recently purchased last week, actually. Nevius. Okay. Nebbyus is doing quite well. And I normally would have said two years ago, way too speculative. But I've got to tell you, they're winning a lot of orders, I think do a good job. I like core weave more, but Nivius is actually a very respected company. I think you got a good one. Let's go to Elaine in Massachusetts. Elaine. Hi, Jim.
- [41:47]
A
I love your show.
- [41:48]
B
I love what you do for people. Thank you.
- [41:52]
A
A little over a year ago, you interviewed the CEO of an interesting company.
- [41:58]
B
I bought some shares.
- [42:00]
A
They've gone up nicely. Here's my question. Is there more room to grow with Planet Labs?
- [42:07]
B
You know what? I think there is. I think that they do an extraordinary job. A lot of what we're seeing about what's going on over there in our Duran is from them. I think they're just dynamite. I would stay long and I think they break into the black suit. Let's go to Hunter in Florida. Hunter, Jim Cramer. Yes. I can't believe this. Here I am. I can cross something off my bucket list now. Oh, you're very fine. You can keep going. I don't mind. But how can I help? Oh, so, Jim, I have a stock that I can't figure out why it isn't quadruple its current price. It's got a trailing PE of about 30 and a four PE around seven or eight. And the company is Howard Lutnick's old company, BGC. What do you. Okay, Well, I think that it's considered too commodity, I think. But I agree with you by the way. It does seem too cheap to me. It has been historically cheap is the problem. People just don't pay up for it. Remember, you are at a high and I don't want to push a stock at its high when there are other brokers that are way, way off their highs. And that. Ladies and gentlemen, conclusion of the Lightning Round. The Lightning Round is sponsored by Charles Schwab. Coming up with some of the biggest
- [43:33]
C
IPOs of all time. On the way, Kramer's taking a closer
- [43:36]
B
look at how much money they could
- [43:38]
C
command from the market.
- [43:40]
B
Next.
- [43:56]
A
Foreign
- [44:00]
B
we're all excited about the coming mega IPOs of anthropic OpenAI and Space X. They're going to be incredibly exciting. I think they'll bring people to the market who've stayed away or never even thought of owning stocks. It's possible the day to day discourse for months without these three companies. I don't mind if they suck all the discussion out of the room, but what worries me is they might suck the capital out of the stock market. Remember, when these companies come public, the money has to come somewhere. Typically when we're dealing with a big IPO comes from every other stock in the S&P 500. And these aren't just big IPOs. We know that according to the latest private fundraising rounds, Anthropic is valued at 380 billion. Open air clocks at 852 billion. Those are extraordinary numbers. But nothing is more exciting for people than Space X. Elon Musk, incredibly popular entity that I talked about earlier in the show. I think it might be worth as much as $2 trillion. We don't know much about how much stock will be offered. Some say it could be a $75 billion IPO, which would be more than all of the deals in 2024 and 2025 put together. When you hear that, you need to ask yourself where is all that money going to come from? The first one up, which is expected to be Space X, is particularly problematic. First, I think that there'll be a lot of retail interest in the ipo. But as I said earlier in the show, a lot of that might be from shareholders of Tesla. You know what's going to happen. Sell, sell, sell. They want to bet on Elon Musk's vision for the future. Tesla's core electric vehicle business is slowing while Space X is an exciting growth story. We know that in addition to rocket ship, SpaceX includes Starlink, the incredibly popular global satellite broadband company which offers prices pretty low there. It also does hoisted payloads, and it does satellite transport and ride shares. This one's going to be a money magnet. It's just that a lot of money may end up coming from Tesla. But beyond the money swapped out of Tesla, you might see something that happens very rarely. The S&P 500 taking the stock in immediately upon going public. The ramifications here? They're monumental. Let's say the lead underwriters, rumored to be Morgan Stanley, are given an exception to the rules and are able to offer, say, only a sliver of stock, perhaps as little as 5% of the share count so it doesn't overwhelm the market. The clamoring for the stock will be monumental. Even with the 5% ruling, it's possible that the market cap could be in excess of $2 trillion. The keepers of the S and P would have to reset the entire index. The rebalancing could draw out hundreds of billions of dollars for the rest of the market. Nothing as big as ever entered the index, so it's unchartered territory. But I do have to Wonder whether the Magic 7 will be shared owners, especially in video, as it is the largest company. Remember my view Bull markets really rarely get killed by events, no matter how dire. Instead, bulls are killed by excess stock supply. You get too many big IPOs and the market collapses under its own weight. I just outlined how hard it will be to bring SpaceX public. Imagine what happens when the anthropic and open air deals come public next. It could be a bonanza, at least for those who get in on the deals. Everyone else though, maybe it's a not so hot outcome. Like I said, as always, Bull market Summer, I promise I find it just for you, right here on Man Money. I'm Drew Kramer. See you tomorrow.
- [47:16]
A
All opinions expressed by Jim Cramer on this podcast are solely Kramer's opinions and do not reflect the opinions of CNBC or its 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 Kramer as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. Kramer's opinions are based upon information he considers reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Mad Money disclaimer, please visit cnbc.com madmoneydisclaimer you've never been one to settle. Stand down or stand still. You're a lifelong learner, energized by excellence. There's a fire inside you you can't ignore. You've got competition to outrun, momentum to build on, and your own high standards to meet. Stop now. Not a chance. At Capella University, we help you catch what you're chasing. Because you've always had the drive. Now go earn the degree. Capella University. What can't you do? Visit Capella Edu to learn more.