Transcript
Fidelity Representative (0:00)
Don't just ride the index, seek to outperform it with Felc, the Fidelity Enhanced Large CAP Core ETF. Unlike passive ETFs, FELC is run by a team of experts to adapt to market conditions and pursue upside potential wherever it's hiding. And while you get the potential outperformance of an actively managed fund, you can still buy and sell it on your terms just like any other ETF. Discover FELC, the Fidelity Enhanced Large Cap Core ETF part of Fidelity's suite of active ETFs. Learn more at fidelity.com felc before investing in any exchange traded fund, you should consider its investment objectives, risks, charges and expenses. Contact Fidelity for a prospectus and offering circular or if available, a summary prospectus containing this information. Read it carefully. While active ETFs offer the potential to outperform an index, these products may more significantly trail an index as compared with passive ETFs. Fidelity Brokerage Services LLC Member NYSE SIPC.
Capella University Representative (1:01)
Imagine what's possible in your business career when learning doesn't get in the way of life at Capella University. Our game changing flexpath learning format is available in select business programs and lets you learn at a time and pace that works for you. That means you don't have to put your life on hold while earning your business degree. Instead, enjoy learning your way and earn your degree without missing a beat. A different future is closer than you think with Capella University. Learn more@capella.edu.
Jim Cramer (1:56)
Hey, I'll be Kramer. Welcome to Bad Buddy. Welcome to Kramer friends. I'm just trying to make you a little money. My job is not just entertain, but to teach you. So call me at 174, CBC Creamy Jim Cramer earnings matter again. Okay, that's what happened last night when the United States and China reached an agreement, however temporary, to hold off trade Armageddon. The rollback of the exorbitant tariffs to much more reasonable levels caused the stock market to explode. Dow jumping 1.161 points 1160 the S&P surging 3.26% in the Nasdaq poll voting 4.35% reaction instantaneous stocks erupted. Everything had anything to do with the world economy. Not just stocks directly related to Chinese trade took off with huge gobs of gains made today. It was a spectacular day for the bulls, one of the smartest I can recall. Very rarely have I seen the stock market actually get surprised by something from the White House in a positive way. We've now seen it three times in barely over a month. One bad too good. First April 2, Liberation Day, the day it will live in trade infamy. When President Trump declared a trade war against the entire world which caused a two date decline of over 10%. Then he surprised us again by pausing those tariffs by 90 days for most countries cheering in more than 9% gain on April 9. It happened again today with the news that the embargo like tariffs on China will come down to more reasonable levels, albeit still higher than before liberation. The market rebounded hard. But what was most interesting. I don't to me we just. It wasn't only a bounce in tech stocks tied with China. You expect that, right? We got a jump in all tech and in many other stocks with any economic sensitivity. It was a day when earnings estimates took on new meaning and it could bring about higher prices for some time. Let's parse how this all came to pass and why it was such a surprise to the market. First, there were always two camps close to the President. One wanted China back to where it was before it was admitted to the World trade organization in 2001. Now is a very big deal because China fully opened its economy to exports but also wiped out a ton of our industries. A rollback of that proportion could have done real damage to China, but it also bring down big chunks of our economy. The second camp, the one that seems spearheaded by Treasury Secretary Besson, let's call this one the cooler heads prevail contingent. They negotiate the pause in the big tariffs and a reduction for now to to levels that are still significant but they are not punitive. That's important because many investors believe the punitive tariffs there being catastrophe here. Now, I don't want to make any judgment about whether all of this trade brouhaha was a part of the art of the deal yet one big negotiation or the President simply changed his mind for seeing how much carnage the original plan unleashed on the stock market and on consumers and retailers who feared hoarding an empty shelves. What really matters, at least to the stock market, is that many hedge funds didn't believe Trump would change his mind. Stocks have become heavily shorted, betting that Trump would never give in even if it wrecked our economy. Now, we don't know if Trump allowed for a temporary compromise because the economy did seem to be troubled and Fed chief Jay Powell wasn't going to respond with rate cuts. That's the, you know, cognizant he say stuff like that or because the weakness was starting to turn to fear. Raw naked worry about what would happen the House of Bay think about it. How many times have you heard that we were on the road to an unavoidable recession because of the China tariffs that became the cause celebrate the bears wouldn't let go of a pot of honey for the grizzlies that was oh so close. As the talks already thought to fail produced nothing all weekend. But the early morning announcement gaffed these bears as surely as an earth sign character walking around in a New Jersey backyard. Boom. Now let's talk about the beneficiaries. The first the company's directly affected here let's talk about Apple, Broadcom and Video. All which were about to see a chunk of earnings disappear or become jeopardized by an ever harsh relationship with China. Same with the semiconductor capital equipment. You know thinking about the Lams and the KLA that have already seen their earnings cut back by a decline in trade. Apple's been treated like a pinata ever since it reported because of a belief that it would be unable to shift enough of its Chinese manufacturing new countries like India and then its service revenue skipped a beat on that last quarter of Nvidia has been perceived as a hot potato where you never knew where the White House might stand. Qualcomm has a ton of business that could be impacted by China by the way its stock has been smashed beyond all recognition. That been a real winner. These three stocks were easy prey for the bears who captured the mike including both strategists and hedge fund managers. Now you might want to include Amazon in that group because did a ton of business with TAMU and Sheehan. Those are the Chinese companies that thrived on a tariff loophole that that allowed their goods to flood our markets. Now we don't know if they're going to get that break break back. It wasn't announced last night but Amazon stocks sure act like it would. And there are the tax that benefit from a possible avoidance of recession. Take matter which rallied nearly 8% Alphabet up 3.7%. Neither is much direct exposure to China but they would still be it would be collateral damage from a slower economy. But the most quizzical were all these other groups Financials, industrials, transports, consumer discretionary stocks that might have been crushed by a recession. Classic case the banks. Now they're always the first to be annihilated by any decline activity. The three IQ on are Goldman Sachs, Wells Fargo and Capital One. Why? Because my chapel trust owns all three. Join the club, find out about them. All three of these soared with the latter Capital One most sense of the potential defaults because of its Poor credit card clientele that skyrocketed more than 6%. It has been my favorite in the club. So I'm kind of proud of it that that the latter cohort could rally even as the group that had nothing really to do with China directly. Well, that just shocked a whole lot of investors. Could there really be such a reaction of reverberation from this China stamp execution? Yes, absolutely. Why? Because we'd all become used to the idea that it didn't matter how good their previous numbers were, the ones they just reported. What mattered were the future numbers, the estimates. And they were coming down hard because analysts believe that the present trade policy would most likely cause a recession. So the estimates they were going to go lower even year over year. That fear made their most recent quarters completely irrelevant. You could own virtually nothing except the most defensive stocks, utilities, some of the safer food stocks, better drug stocks. How about this Friday? The President announced this very morning some unilateral drug price cuts. Ones that can't really push through, he can't really do on his own. Even though initially people thought they could and the stocks just cratered. Later on we realized that perhaps they would just be a negotiation. They still got hurt but then they came back when people realized that big Pharma doesn't know how to roll over and it's going to fight tooth and nail. Most safety stocks fails particularly though their declines were stock recognition. Stark recognition that while the President may not be fixated on stocks, they're always a focus and he doesn't want to annihilate the stock market. Too many people own stocks in this country now. We know that we won't be free of the bears here. There's too much at stake. They don't want to see the rap that Trump could still caused world trade crash and you better be short, that's what they say and take advantage of this rally to short. But I come back and say that we see how easily stocks are now is a little dangerous to be that short. Bottom line, it's better to stay in, stay on and let a ride than to try to pick the perfect moment to trade in and out. By the way, that's so much of a strategy. It's more of a game of chicken where there are no winners, just losers who think they are smarter than than the average bear. I'm going to Jeff in Texas. Jeff speaking. Jeff, what's up buddy? It's Jim.