← Mad Money w/ Jim Cramer
Mad Money w/ Jim Cramer
Mad Money w/ Jim Cramer 6/3/25
00:44:23
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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Jim Cramer
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Jim Cramer
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Jim Cramer
Hey, I'm Kramer. Welcome to Mad Money. Welcome to Kramer, people. My friends, I'm just trying to make you a little extra money. My job is not just entertain, but to educate and teach. So call me 1-800-743-CBC. Tweet me, Jim Cramer. All right. This market's struggling with something real basic. It's just not doing a good job of valuing stocks, which is exactly what a market's supposed to do. In fact, it's valuing them wrong so often that I think it creates a ton of confusion. That's a real shame because this action is people getting fed up with the stocks. Stock market again. You can feel it. I know. And just when we're seeing some very good gains from a host of sectors, people say bye bye. I can't take it. That's what I'm moping about. After a solid day with The Dow advanced 214 points, SB gain point 5, but the Nasdaq climbed point 81%. Once again, it was a solid reversal from early morning trading. This is the pattern. Let's start at the very beginning of a typical day in this market. I'm an early bird, addicted to watching the tape ever since I first laid eyes on it in 1981. It's a fascinating thing to track because the tape contains an unbelievable amount of information if you know how to interpret it. And I am a tape whisperer. The early morning action is best place to start when you're talking about what the market's failure to value stocks is all about. The early morning starts the way it almost always does. This happened today by 5am which is already an hour later that I've been looking at. Dorothy S.B. usually down about 0.25% and that's down between, I'd say.4 5.447 every day. I get that we've seen stocks disappoint an awful lot this year, but as I tweeted yesterday and today, I can't find the reason why I say the Nasdaq would be down 4.47 given that nothing happened since the close of the day before. Nothing. And look, I'm always as current as possible. Upgrades and downgrades to the night before. And again, nothing could justify stocks looking that ugly this morning or yesterday or, well, most of last week. So what is happening? Are the futures lying? No, they're just plain wrong. Let's ponder, let's, let's ponder the first mistake this market makes. We're regularly getting sellers right from before the get go because what are they doing? They're positioning themselves for President Trump's potentially angry and rash statements about trade, about China, about attacks on Apple, attacks on Wal Mart or maybe even Nvidia. They want to sell stocks short to profit off the President's next furious true social post because they know the market will take it negatively. Why? Because it's negative. The house of Pain when he said so much for being Mr. Nice Guy about his somewhat critical views of China, he made the short sellers some real good money very fast. When he attacked Tim Cook for moving out of China and then going into India. Or when he chided Walmart's Doug McMillan for having to raise prices even after Walmart cajoled Chinese suppliers for breaks that he was practically printing money for the pessimists. When some anonymous source in the White House said Nvidia couldn't sell the chips it wanted to Chinese customers, effectively blocking the company from a $50 billion market, the shorts cleaned up. Oh, for them, it must have been a thing of beauty. I get where the shorts are coming from, but their strategy doesn't work if the president keeps his mouth shut and doesn't go to the or whoever posts the stuff for him. They just don't get it up there. It's an outright failure when the day's tone is set by the considered, level headed, calm, coherent and thoughtful Secretary Bessen from Treasury. And I hope my saying that does not get him fired. But when Trump reminds us of how horrible all of our so called trading partners are yet what a bunch of fiends and fools when he puts out deadlines for the best and final offer. It's possible the Supreme Court may take the case and strike down the tariffs while shiver me timbers. That's why the overall market's often wrong and regularly changes direction. Today for sure was a peasant day, not a Trump day, and that's a recipe for a good session. Second, the market remains way too skeptical of the need for more AI infrastructure. Ever since we heard that the Chinese is something that was supposedly better than Nvidia, the industry has never regained its luster. The stocks of companies even remotely connected to the data center. Think Eaton or Cummins or Vertib if you want to. They've lagged terribly. Oh, and Nvidia for months it was a chronic underperformer. But hey, it turns out the bear case on I may have been dead wrong. For instance, have you seen the stock of Nvidia? It climbed from $86 and changed at its lows in April all the way to the mid-130s when it reported an incredible quarter with an amazing forecast, much better than expected. Stock then rallied to 143 after the quarter. But then it was thrown back when the White House refused to let Nvidia sell China even its lesser semiconductors. The stock gave back a big chunk of its post earnings gains and the shorts were. Well, they were in there. Congratulate themselves, pat themselves back. We realized the market got things wrong today though when we saw matters lining up. 20 years worth of nuclear power from Constellation Energy for AI. You know it's not 20 years worth of nuclear energy with a. With a debt with a plant that was about to close three years from now because you think that the data center is dead or dying a slow death. Next thing you know, Nvidia's right back to 141 where it went out today. What a relief. Of course, the whole time you could have gotten a clear read on the data center by looking at the action, the pin action, say in Core. This company builds data centers and then rents out its computer power to some real heavy hitters. Core. We've had the misfortune coming public a couple months after Deep Seat, the Chinese company created an AI model supposedly using far less Harbor. They had to cut the size of the deal and the IPO. They took it down to 1 to 40. It started really this thing price of 40. It would have, it wouldn't have come public at all if it weren't for video taking an anchor position to ensure the deal worked. Now video so huge that its 24 million share position core we've now $150 stock really doesn't mean any of them. But if you bought it right after the company came public, you've nearly quadrupled your money thanks in part to a data center licensing deal with Applied Digital that sent Corvette up 25% today. So what can I say, it looks like people are wrong again. Then there are the dollar stores. Talk about wrong. Now there's this soto voce belief on Wall street that consumers in this country actually still feel flush so they're staying away from the dollar stores when you go those places you go when you feel times are tight. This morning support from Dollar General put that thesis to bed. CEO Todd Vasos told us that about a recent survey that Comey did where their customers reported having quote less income than they did a year ago. And nearly 60% of our customers noted that they felt the need to sacrifice some necessities in the coming year. End quote, mind you. Necessities, not red Solo cups, not plastic ware. Okay? We're talking about skipping everyday basic needs. And it's not just lower income people who feel the pressure. Bezos said they're seeing plenty of middle income and even higher income customers coming into Dollar General. They went out of their way to say that they'll do their best to make price increases their last resort. But it sure sounds like they may have to raise prices. They sort a huge amount of stuff from China. I mean huge. So here's what I say about that one. Just don't tell the President. And that's how so many people got Dollar General rule allowing the stock to soar nearly 16% today after a great quarter. When you examine the market's mistakes, they share a common theme. The President's distorting pretty much everything, especially with his tariffs and his jingoistic approach to the rest of the world. And, and it's continually confounding traders and investors alike. People would just rather be short. They expect the market to come down every day. Plus I think that Trump has almost single handedly revived the short selling business. That's on sense that money can be made by betting. Get stocks again. I know for a fact that lots of hedge funds which gave up shorting after the time of Gamestop are now back with a vengeance they place big bets every day, betting that Trump will crush some company with a well timed true social post. The short sellers aren't in charge, but they have a lot of firepower and a lot of conviction. They take strong positions like those against Nvidia or Coralweave or Dollar General. And when the tape is ugly, they crush those stocks because they figure they can't lose as long as Trump's in the White House. But the bottom line, these short sellers, they've grown way too confident. And today we found out they can lose big because lots of businesses are doing great. It's just that Wall street only notices on days when the White House doesn't take up too much bandwidth. Oh, and thank you, Secretary Bessant, for your measured, cerebral approach. I actually find it a breath of constructive fresh air. And your demeanor is duly noted right here every day that you represent the White House. Bill. Oh, my old friend Bill in Massachusetts. Bill. Hi, Jim, how are you? I am doing well, Bill, what's shaking with you? Hey, listen, can I quote you from a morning meeting from last June of last year? Real quick? Why the hell not? Always be tough on your portfolio. Focus on the worst stocks. Never buy all at once, selling to strength. Don't fall in love with stocks. Give your stocks a hard time. Don't blow out of positions like stocks less as they go up. Study valuation, then get tough. Sell into parabolic moves and market rallies. Jim, man, that guy's got horses on. The morning meeting of June 18th of last year, well, that had what I call clarity. Clarity of thinking. That's how I learned. That's how I learned from you. It's amazing. It's amazing. Thank you, buddy. Thank you. Thank you, buddy. That makes me feel great. And you see what, what Bill's referencing is Jeff and I do a program from 1020 to 1030. And you know, other than my mother, no one watches it. And actually my mother passed away 45 years ago. She probably hasn't checked in and watched it either. But Bill watches it. We just found out about that. Bill's a watcher. Bill watches. So, Bill, how about a question? Yeah, Jim, I asked you a couple of months ago about GE Aerospace. GE Aerospace, Bill is about as good as it gets. That guy from June of last year, he knew. He knew that GE Aerospace was good. That guy so smart, I got to get him on the show. Anyway, Bill, thank you for saying those kind words. And I truly love GE Aerospace right here. No, do we really have to cut away? I had Stanford in California coming on. You know, Stanford's one of my pal buddy friends. All right. Anyway, you've heard it. I didn't mention the Wells Fargo lifted its asset gap. You know, hallelujah. That. But you heard it. The market just keeps getting it wrong. And that's because they keep hoping for a post. And when Secretary Besson out there with his very consistent non mercurial behavior, the stock market goes higher. What can I say? It's just a reminder of just how wrong people can be when they think it has to go down no matter what. Oh man. By tonight, the negativity surrounding Salesforce. Oh holy cow, is that palpable. But is it justified? I'm going to share where I come down. After the company's recent earnings report. Then, is the market getting along with its reaction to Dell's latest quarterly results? I'm going to dig in the numbers, tell you where I stand. And are the crude oil bulls in for a rude awakening given the commodities relationship with the dollar? I don't know. Why don't we go off the charts to find out? And I want you to stay with Kramer.
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Voiceover/Announcer
Don't miss a second of Mad Money. Follow imkramer on X. Have a question? Tweet Kramer Madmentions. Send Jim an email to madmoneycnbc.com or give us a call at 1-800-743-CNBC. Missed something? Head to madmoney.cnbc.com the 150 billion dollar pet industry is booming as people absolutely love their dogs. If you're looking for a solid investment, Dogtopia is the name to know. With 300 locations across North America, it's the largest, leading and fastest growing pet franchise. Offering a recurring revenue membership model. Dogtopia offers safe, open play, dog daycare, boarding and spa services. Want a recession resistant franchise? Check out Dogtopia because every dog and dog parent deserve it.
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Jim Cramer
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Jim Cramer
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Jim Cramer
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Jim Cramer
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Jim Cramer
We gotta resolve something. Why the heck does everybody suddenly hate Salesforce? Last Wednesday night Salesforce reported and as usual we spoke to CEO Mark Benioff on Mad Money. After the print, I thought it's a pretty good looking quarter. Solid top bottom line B with real momentum for the company's Agent Force AI offering. And was I wrong? But even better, I thought management gave you an impressive outlook for the current quarter. Raise the full year forecast again. And yet after soaring as much as 18 points in after hours trading, for people like me who thought it should go up, it gave up all those gains and then dropped another 10 points the next day. Now this was just a shocking development for this once beloved enterprise software story. Now it kept going down on Friday and yesterday for finally stabilizing today. Thank heavens. Overall Salesforce has fallen nearly more than 4% since the quarter. Given that I'm so close to the story, it's been a core holding for my chapel trust for ages. For heaven's sake. I want to circle back because you need to know why the sellers have been dumping the stock, why I think they're wrong and why I've been wrong. Let's start with a bear case. Even before the quarter, this stock was getting maul because last Monday Salesforce announced an $8 billion acquisition of a company called Informatica. That's a data management and analytics play that no one really cared about, frankly. During our interview last week, Benioff explained that Informatica's technology helps enterprise customers better organize and standardize their data, making it more useful for all sorts of AI applications, including Agent Force. But investors have their doubts. And that's primarily because of Salesforce. Last big deal that was the nearly $28 billion cash to stock acquisition of a company called Slack, which closed in the late summer of 2021. Particularly frothy time for the stock market. I think it's safe to say that Salesforce overpaid for that one. Now look, they're integrating Slack's collaboration tools into their whole product suite. I'm going to hear that immediately for saying what I just did. It's just not clear how much of a boost it's given them. At least not to hear, not to Wall Street. Now, roughly a year the stock deal closed, we saw several different activist firms make a run at Salesforce, which eventually led to much more cost discipline and sizable buybacks. Wall street loved all that. It's a big reason why the stock rallied from 132 and change at the end of 2022 to an all time high of $369 last December. Boy, is that far away from here. But I get the sense this informatic acquisition is giving investors about ptsd. They're worried that Salesforce will lose its spending discipline and return to their more freewheel in days of old. Which brings me to the real crux of this issue. There's a feeling that old Salesforce, meaning the core sales and customer relations management software plus all the customers, is slowing, slowing meaningfully. And the new AI offerings like Agent Force, they just aren't ramping quickly enough to make up the difference. I thought that Salesforce much better than expected results and guidance this week would help dispel that notion, but apparently not. So let's take this apart. It's true that growth for most parts of Salesforce is indeed slowing. If you look at the constant currency growth rates, that's important constant currency for all five of the company segments. Four of the five saw the growth decelerate in the latest quarter both year over year and quarter over quarter. Only the related segments saw an acceleration from 10% a year ago to 14% in the latest quarter. And by the way, if you thought the strong guidance would quell some of the concern about a slowdown at old Salesforce, you'd be wrong. Because much of the strong guidance was dismissed as simply the result of a weaker dollar which boosts the company's sales overseas. Now, while the guidance for the current quarter and full year was basically ahead of expectations on every line, some analysts fixated on one line in particular, and that's the current RPO or remaining performance obligation. That's expected to grow by 9% in the current quarter on a constant currency basis. And one analyst pointed out this would be the first time in history that Salesforce current remaining performance obligation growth fell to the single digits. All right, now how about this Agent Force debate? Let's. Let's take it head on. Like I said earlier, the concern here is that Salesforce agency platform simply isn't ramping fast enough. Despite management's insistence that Agent forces selling well, the company boasted about some notable customer wins. They talked about PepsiCo, OpenTable, hey, Falabella, that's the largest department store chain south in South America. No, but while Agent Force definitely has some momentum, it's growing off a very low base, which means it's not yet big enough to truly move the needle. And that's what worries people. Let me put it this way. Last week the company know that Agent force had reached $100 million in annual recurring revenue after just two quarters. That's the fastest growing product in Salesforce's history. That's great, but Salesforce is on track to bring in more than 41 billion in sales this year. So $100 million in agent force sales, well, that seems like kind of a rounding error to me. All right, so how come I'm sticking with this one? Maybe I'm a loser. It's been said. Look, I can't dispute that the core. That the growth of the core business is slowing here, but that's I think simply the law of large numbers. You could say the same thing with virtually any mature business. I saw it happen to Oracle, although of course the price of earnings bulb was low. I don't care that old Salesforce is seeing slower growth because it's also seeing a significant increase in profitability. People are treating this like it's an ailing revenue growth story, but that's why they bought Informatica, to kind of hide it. But it's increasingly become an earnings growth play and the earnings growth is excellent and Informatica doesn't worry me. As for the other legs of the controversy again, the Informatica deal and the Asian force ramp up. I got to give you what might be a really unsatisfying answer. This is now a show me story. I hear Benioff's arguments for why Informatica is good for Salesforce, but I understand why the market's unconvinced. He'll have to prove over time that the deal makes sense. I don't think Mark wants to sit there and buy back a lot of stock like Apple has done. He's itching to buy more businesses. If they're additive, they make the company faster going. If they augment Agent Force, I see nothing wrong with that. But I don't mind big buybacks either. Now how about this? Agent Force again, Salesforce will just have to prove that the price of winner over time. What do we really want to see? Well, I'll tell you what we really want to see. We want to see more bold face. Customer wins. But more importantly, we need to see companies that use Agent Force engaging in large scale, yes, layoffs. Now, no one in this business will ever admit this, but corporations are excited about all this AI stuff because it allows them to fire people. Salesforce basically needs to prove that Agent Force can Replace lots and lots of expensive white collar workers and all that health care costs and everything else with something that doesn't cost a lot at all. Or else it's just. What happens is AI is just something additive but not revolutionary in what it does to the enterprise. In the end, look, I'm going to stick with Salesforce because they got an incredible track record. Every time there's been something uncertainty about the company's outlook, the right call was to trust Marc Benioff and his team. Plus, at this point, the stock's gotten surprisingly cheap. The numbers keep rising, yet the stocks have struggled. I mean, The Dorothy's over 23 times earnings. That's the cheapest Salesforce has been in ages. Over the past five years, it's traded about 41 times earning on average. Right now, I think you're getting a steal. But here's the bottom line. Salesforce is hated here because Wall street doesn't believe in the informatica deal or in the core business. They think it's slowing and the idea that Asian force can somehow grow fast enough to make up for that difference. This is a moment where you need to have some faith in management. I have faith. But you need to decide for yourself if you're willing to trust Marc Benioff and his team. Because ultimately that's all this comes down to. And for many I know that ch just not enough. They have money's back after the bank.
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Voiceover/Announcer
Coming up, Dell had a strong quarter. So why did investors not compute? Kramer's taking a closer look at the PC players results.
- [22:42]
Jim Cramer
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Jim Cramer
Like a good neighbor, State Farm is there.
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Jim Cramer
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- [23:38]
Jim Cramer
You'Ll love this. Last Thursday night, Dell Technologies, we all know it, reported a set of numbers that confounded Wall Street. I thought it was a good quarter, but the stock still dropped more than 2% on Friday for sinking another 2.9% on Monday. Now today, Dell snapped back like a cool spring rally. 3.5% as part of a broad semiconductor LED move. But it's still not back to where it was before earnings. As I mentioned top of the show last night. Dell got hit yesterday because the Wall Street Journal reported that the Trump administration is looking to reduce spending with 10 technology providers, including Dell. And and honestly, when the stock initially sold off on Friday, that probably had more to do with President Trump's increasingly belligerent attitude toward China, given that Dell has plenty of China exposure. This is what's happening every day. It makes it very difficult to analyze stocks. Honestly, that almost makes it worse though. Dell pulled back after the quarter for reason. Nothing to do with the quarter and everything with the White House. Okay. But I hate to see a strong quarter go unappreciated like this. So before it's too late, I want to highlight everything that's going right at Dell, even though I know it's bounced back. First, let me give you some background. I'm a huge fan of Michael Dell for decades. Decades. I've been bullish on Dell stock ever since the return of the public market in late 2018. Since the end of 2018, Dell's up more than 350%, trouncing the 242% gain the Nasdaq 100 over the same period, to say nothing of the paltry 138% gain in the S&P 500. That was easy. That's a terrific long term move. But man, I mean I looked a lot smarter year ago and Dell spiked just under $180 mostly because their server business is a key partner for, yes, Nvidia. And 12 months ago Wall street was still in love with the AI infrastructure boom. We saw a little love today, but who knows, since then it's become a slop. Dell fell 63% from an all time high to a low of $66 after the liberation Day fiasco in April for recovery over the past couple of months, making it back to around 112 as of today. What a wild trader. I don't want to get too bogged down explaining the stocks agonizing decline initially was just exhaustion after a tremendous year near front. But then there were rolling concerns about enterprise tech budgets and the durability of AI infrastructure spending in recent months. So the weakness in Dell was all about tariffs because they still make tons of merchandise in China. Companies trying to diversify away from People's Republic. But it's going to take some time and that's why the stock had that final leg lower in April and including a decline of nearly 25% in the two days after the Liberation Day tariff announcements. And it's why the stock rebounded from its lows after the White House paused or rolled back its most aggressive tariffs on imports from China. Throughout all of this, I've tried to keep my eyes on the prize, which is that infrastructure spending still going strong. And Dell can clean up selling servers as huge companies spend fortunes to build out data centers. So far though, throughout all the noise of the last 12 months, none of that's looked at all impaired. The bull thesis was perfectly intact. It's just that the stock gotten much cheaper now selling for just 12 times this year's earnings estimates when it was traded 23 times earnings a little over a year ago. Shrinkage of the multiple. And when Dell reported last Thursday night, I think the story only got better. Granted, the headline results were mixed. A solid revenue beat paired with a meaningful earnings miss. Drilling down the PC business trounced the sales estimates while the servers and storage business came in a little, little light. Sounds kind of madness. So then why am I so enthusiastic about the darn quarter? First and foremost, because Dell's guidance was fantastic. For the current quarter, the company expects revenue of 28.5 $29.5 billion. Do you know the analyst looking for 25.3 billion? That's insanely better than expected. That's like an invitation video beat. We're talking 16% revenue growth at the midpoint for a company's been around forever. On top of that, management says they can earn $2.25 per share for the quarter, $0.17 higher than what Wall street wanted. Company also reiterated full year sales forecast. Despite the miss for the first quarter, Dell raised its full year earnings outlook by $0.10 to $9.40. The analyst looking for $9.31. More importantly, on the conference call, management made it clear that this rebuild robust forecast includes the impact of Trump's tariffs. CEO Jeff Carmen, he's been there forever. I love him. Explained that their guidance quote includes everything that we knew know about tariffs. As of today, you know that's a big issue. We want the companies to build it in. We don't want the ones that don't. Okay? Unfortunately we can't put this issue to bed because the President loves being unpredictable. But at least Dell seems like it has the tariff situation somewhat under control. Clark also gave a little color the cadence of the quarter, how it's going through, saying February was solid and improved for January and March was better than February. Though there was what he called a speed bump in North America when things slowed down after the Liberation Day announcement. Maybe that spooked some People. But Dell doesn't seem all that worried about it now. I've saved the best part for the last. Okay, Remember, keep your eyes on the prize. Focus on the secular growth story mean the infrastructure story which has hasn't shown any signs of slowing in Michael Dell certainly a complete believer. In fact, Dell's AI related businesses are on fire. Company said it generated $12.1 billion in AI orders in the quarter which surpassed the entirety of the company's shipments in all the previous fiscal year. Wow. They now have $14.4 billion backlog of AI business. The estimates are a bit shakier for these alliance, but according to data from Bloomberg, the analysts were only looking for about 5 billion AI orders and an AI backlog of less than 8 billion. They were dramatically shorter. Things were much better than people thought. In short, Dell's doing much more, much better than anyone believes. And that's why the guidance for the current quarter was so strong. And it's another reason why the stock should be bought. As Jeff Clark explained it, quote, we built a strong reputation for deploying large scale clusters quickly and reliably, significantly reducing time to first time, the first token and accelerating time to value for customers, end quote. Dell offers great customer support too in ensuring reliability and performance after the products are shipped. No longer. No wonder Michael Dell's in the front row when I go out there to see Jensen at that GTC conference. We were also heartened to see signs of progress in the IPC which initially got a lot of hype but now, but never really took off. Now though, Dell says enterprise customers are upgrading to Windows 11 machines, many of which are a IPCS, the consumer side of the PC business. It's incredibly weak. Sales were down 19% in the quarter. But look, that was more than offset by the strength of the enterprise side. That's side we care about. One last point. During the quarter, Dell returned a record $2.4 billion to shareholder, including the repurchase of almost $2 billion in shares at an average price of $90. That's almost as much as the 2.6 billion the company spent on repurchases or all of last year. And Dell CFO said on the company's call that the repurchases reflect management's quote, continued confidence in the business, end quote. And Dell's quote, ability to act opportunistically during periods of price dislocation, end quote. That is Michael Dell. That's his view on the stock. Putting all together, Dell deserves a lot more credit for the quarter reported last Week. The bottom line, their business is on fire. And more generally, the company's on track to grow sales by 8% and earnings by 15% this year despite tariff headwinds and economic uncertainty at 12 times earnings. That's enough for me to stay bullish on Dell, waiting for the day that the fundamentals matter again. Bye bye, bye, bye, bye, bye, bye, bye, bye. Let's go to Melissa in Florida, please. Melissa. Booyah. Jim, this is Melissa from Groveland, Florida. Fantastic. My nickname is Sunshine. I'm an elementary school counselor by day.
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Voiceover/Announcer
And investor by night.
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Jim Cramer
Sunshine, you do it all. That's right, Jim. I'm a first time caller and a huge fan of the show. My stock of PayPal, it has been looking pretty stormy since 2021. It's down more than 60%. Should I hold for brighter skies or rotate into something with more shine? All right, listen, listen to me, Sunshine. Alex, Chris is really coming. He's. He did not deliver in a couple of quarters. I now think he is ready to roll. I like the stock of PayPal. It is a crowded space, admittedly crowded space. And you know, there's a lot of companies that are trying to do the somewhat of the same thing, including a firm. But I will tell you that I think Alex, Chris, he be the man and he will get you where you have to go. And thank you for the kind words and for the call. She made me feel like Jimmy, Chill. I've been checking. Chilling. I know I have been. All right. Dell's AI business is on fire. And the fact it's able to grow sales and earnings below the headwinds, well, that's enough for me to stay bullish on this company as a whole. Boy, we have so much man by the head, it's scary. A fresh look at what the charts are telling us about the prices of crude oil and the dollar where that's headed. And as the JP's budget bill makes its way through Congress, could an under the radar provision provide a new path to to retirement for Americans? I'm going to share the details and of course all your calls. Rapid Fire, tonight's edition of the lightning round. So stay with Kramer. With the price of oil now down at 63 bucks a barrel, can it stay this low? And just important, what does oil in the 60s mean for the rest of the economy? Takes that question. We're going off the charge with our resident commodities expert Carly Garner. She's a brilliant technician. She's the co founder of the Carly Trading. She's author of Higher Probability Commodity Trading. Now, Garner's pretty bearish on oil here, especially in the context of what's happening to the US Dollar. She thinks the greenback's likely headed for a major rebound. Unlikely fight, what many people think, but that's her thought. And given that all commodities are priced in dollars, well, that's bad news for crude. So why don't we start with oil? Garner points out that commodities tend to experience bear markets more frequently than they experience bullshit bull markets. Do you know that? And the bear markets also tend to last longer. As she sees it, oil is very much in bear mode and that bears nowhere near going into hibernation. Take a look at this weekly chart of West Texas Intermediate WTI crude futures, Garner notes accrued peaked way back in March of 2022, just after Russia invaded Ukraine. So far, it's never really recovered. For years though, as oil worked its way lower, as it would always run into a dice kind of floor of support. And where's that floor support? $65, okay, always holds it. That wasn't natural. It was OPEC stepping in to tamp down production every time that oil got too low. Now, I've got no love for opec. And these countries aren't idiots. They know that nothing good happens when oil sinks below 65. Unfortunately, that's exactly what happened in April after the Liberation Day tariff announcements. And now $65 is going from a floor of support to a ceiling of resistance. How about that? As Garner sees it, this is an ugly situation developing here for the oil market. In her view, it can't escape from this bearish run unless it breaks out above $72 a barrel. And even then, you've got another ceiling of resistance at the 200 week moving average. So you see what she's got. The yellow one is turned we. So she says even if you got up here, you'd still bump into that wall. Okay, now, so even if the oil bulls win the battle in the next few weeks, which doesn't, it's going to happen. Garner still expects him to lose the war somewhere in the 70s. More likely though, she's betting the crude will fail to break through 65, leading to a watershed move lower. Keep in mind when you look at the relative strength index RSI at the bottom, it's an important momentum indicator. It's not yet in oversold territory. Has to go down. To Garner, this decline unlikely won't end until oil becomes oversold. Now, historically, $65 per barrel has been a penny pivotal price for crude. And you can see that on this longer Term monthly chart. When the crude. When crude broke below $65 all the way back in 2014, it continued going lower until it reached 26 bucks. I mean, that was just unbelievable when it did that. And that was in early 2016 and 20. And the 2018 breakdown eventually ended with a plunge. And a negative price is a few years later in April 2020. So you can see when oil break, there is that critical negative. I mean, there was just. There were just no buyers. So if oil can't climb decisively above $65, Garner thinks gravity will come into play. She wouldn't be surprised if crude drifts down to the low 50s or even the high 40s. After all, oil spent most of Trump's first time first term trading at below 65 plus, just like the weekly chart. Crude's a long way from oversold in the monthly chart, meaning it still has plenty of room to go lower. Should be done with that. What about the pin action from lower oil? Okay, take a look at the monthly chart of oil in the black. In black and the dollar index in green. Okay. The dollar index measures the greenback against basic foreign currencies. Normally, oil and the dollar have a negative correlation. They're supposed to trade in opposite directions because oil is priced in dollars. By definition, a strong dollar means cheaper oil and a weak dollar means more expensive. But ever since Russia invaded Ukraine in 2022, oil in the US US dollar have almost been trading in lockstep. You can see black and green. So you can see these are in lockstep. You can't even tell which one's which. Right. Over the past 180 days, Garner points out that oil and the dollar index have headed in the same direction about 70% of the time. That is highly abnormal. However, in recent weeks, Garner started to notice a gradual return to normalcy. In the last 30 trading days, oil and the dollar index, basically zero correlate correlation. Okay, so there's hope here that we'll go back to which he suspects that we're headed back to the historic norm where they tend to trade in the opposite direction. Now, in recent months, the dollar has been weakening, which would be good news for oil if it keeps getting weaker. But when Garner looks at the data, she sees signs that a significant dollar rally might be headed our way, which would put real pressure on the price of crude. For starters, a recent Bloomberg article stated that sentiment on the dollar is, as measured by the options market is as bearish as it's ever been, literally at its lowest level since 2011. Norman sentiment on the dollar gets this bearish. Garner points out that it tends to bottom. The last time dollar sentiment got anywhere near these lows was in 2020. But in the first few days of 2021, the dollar index bottomed at just below 90 and then rebounded to 115. Now she's betting that this is that. Well, we're about to have a rip, rip your face off rally here. Certainly in 2018, overly pessimistic sentiment triggered a dollar index rally from under 90 to 103. The aggressive sell American trade that we all think is going on it's working against the dollar will climax in the coming week, she says. Allowing the greenback to make a major comeback. She says, even though we have a lot of craziness in this country, including a morally front trade war. Garner says that the dollar should should remain the world's currency for the simple reason that it's the least dirty shirt in the hamper. The dollar is the most liquid, the most stable and it's most backed by it's got the most productive assets. We are a rich country Now. I want you to look at this monthly chart of the dollar index. During Trump's first term, the dollar index fell more than 15 points. Okay, Trump won from one of four down to 88 and change it eventually bottoms as he was leaving office on a lower level of a long term price channel. The incident Trump 2.0 took control of the White House. The dollar index began to collapse from the same trend line. Just like we saw in 2017. A 15 point decline from the day Trump was sworn in would put the dollar index on the major month on a monthly uptrend near 95 right here. GARNER suspects that this is the level where the sellers dry up and the buyers are going to jump in. Now, just like in Trump's first term, the dollar is an opportunity to make a run to the top of the channel before retreating. This would mean a rally back to 110 right now. Garner says almost no one's considering its possibility. And she is right. I don't know anyone who is yet the chart combined with overly bearish sentiment makes her believe that it's not merely possible. She thinks it's therefore probable. If Garner sworn about the dollar index finding a bottom at 95 then she believes that 90 would likely be the floor that would represent a full retest of the decline from Trump's first term. In the end though, she's betting on a dollar rally. And historically the price of oil has traded between 30 and 65 a barrel in a high dollar environment. Here is the bottom. The charts in this very contrary piece as interpreted by Carly Garner, suggest the bear market in oil is likely to continue, especially if the dollar starts rebounding. But even if she is wrong about the dollar, Garner says the technicals look pretty ugly as long as the price of crude stays below 65. The longer stay stuck below that level, the heavier the oil market will become. Bad news for the oil industry, but very encouraging. If you're worried about inflation, that money's back everywhere.
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Voiceover/Announcer
Coming up, Cramer takes your calls and the sky's the limit. It's a fast fire lightning round.
- [40:42]
Jim Cramer
Next time it's up to the and then the lightning round is over. Are you ready, Ski Dad? Time for the light round crunch. Always start with California. Who is that? Si in California. Sigh. Hi there, Jim. How are you? I am good, Si. How about you? I'm great. Jim, you used to comment regularly, somewhat regularly on Goodrx and you haven't said anything in a long time. Well, sometimes, like my Nana Mary said, if you have anything good to say about someone, don't say it at all. All right. Let's go to Monte in California. Monte. Hey, Jim, how are you today? I'm calling you about Arrowhead Pharmaceuticals. You know, look, it doesn't make any money. I've been waiting for it to do something break out. I just don't know if it has the horse business. Let's go to William in Michigan. William Guillaume. Guillaume, speak to me. Hi Jim, thanks for taking my call. Of course. I'm a member of the investment club and I appreciate the support you provide for retail investors. The company I'm calling about is Snowflake. Oh, Snowflake spoken. I mean, it is just. You know, I was thinking about this, but Ramaswamy first comes in, not sure, then he takes off and why? Because the guy is cerebral and he's got a real good closing sense. And man, does he ever have momentum. He is project momentum. Let's go to Henry in Colorado. Henry. Hey partner, how you doing? I am good, chief. What's shaking with you? Everything good here. I wanted to get your your opinion on if you think dover will ever hit 222. I look. I look wrong right now. And Dover for the club and thank you for the kind comments club. But I think I'm going to be right. Why? Because I think that that Tobin is very smart. The CEO and the stock should never been thrown back 19 times earnings. It even went down when steel tariffs went on. I say enough is enough by Dover, right? Now, tomorrow morning. How about. Sam. Pennsylvania. Sam. Jim, listen, I got interesting stock for you. The company is trading at 4 billion. Billion. But it did 16 billion in revenue last year. What makes it interesting is it sits right at the intersection of onshoring and remanufacturing the re industrialization the United States. What I'm talking about is floor floors. Always a bridesmaid, never a bride. I mean that engineering, construction. But people have lost money more on floor than. I actually did a study for Harvard that owned floor and I said you got to sell floor no matter what. And that was in 1982. And. And that ladies and gentlemen is the conclusion of the Lightning round.
- [43:34]
Voiceover/Announcer
The lightning round is sponsored by Charles Schwab. Still to come, could the US be trying to usher in a new baby boom? Kramer's betting on how you can make the big beautiful bill's baby bonds bring the best bang for your buck.
- [43:49]
Jim Cramer
Next, Jim Cramer, the die hard of the doll. Hey Jimmy, love the show. My five year old grandson loves to watch your show. I have to thank you for making us money when it's there to be made. Our world is a better place with you in it. Like any gargantuan piece of legislation, the one big beautiful bill act wending its way through Congress is packed with juicy giveaways for all sorts of powerful groups with expensive lobbyists. But there's one cause that's an unlikely benefactor of the bill. A baby bond provision that would give every baby born during Trump's time in office $1,000. These so called baby bonds should be called baby stocks, although officially they'll be known as trumpet cash. Say what you feel about the President, the man understands branding. I don't know how much of the bill will get through the Senate, but I think the baby bonds have a chance of passing house of pleasure. Senator Cruz from Texas says the purpose is to create a shareholder democracy. And boy am I on board for that. This morning an op ed in the Financial Times, our foremost thinker about markets, Larry Fink, the co founder and CEO of BlackRock, praises the policy, as he puts it, quote, even a modest deposit could grow by the age of 50. Retirement cushion, end quote. Larry's an apostle of the investing and this piece talks about all sorts of investment possibilities that we could take advantage of even if most Americans are seemed reluctant to do so. Look, we're just not great at saving. Europeans say three times what we do. But there's hope with these baby bonds because someone who starts out with $1,000 from Uncle Sam might be want to take big risks with it. That's precisely what I do. When you get money to a baby, what you really do is invest in long dated assets that can compound over time, truly amount to something by the time the kid turns, I don't know, even 18. So what should the baby do with her money? Well, I just happen to have a plan. We need this baby to take risk, but we also need her to be diversified. I know that the veiling money management orthodoxy is to go all in on index funds because the experts don't believe you're smart enough to handle your own money. But the truth is that in this case you can split the baby or at least split the baby's account. You want to put $500 in the NASDAQ 100 to get diversified exposure of. And this one does skew toward tech. I don't mind that. And then you want to pick five stocks for the other 500. I prefer the first one to be risky. You could take a pound to ridiculously expensive stock Consulting company uses AI to conquer organizations. Show them how to become more efficient. You can buy Joby or Archer. Go ahead. Flying cars, quantum computing. I don't mind. Yes, something nuclear. Let's go at least a legitimate one like G Vernova because they actually know how to build nuclear plants. Basically this first position is the highest risk speculative stock, even meme stocks. Then I want a solid health care stock. Maybe Vertex with a cystic fibrosis franchise but also that revolutionary non addictive painkiller maybe by an Abbott Labs. I have a Boston Scientific. Of course you can always bet on eli Lillard with GLP1 drugs. You need a semi, that means you need a video. You need a software, that means you go with Microsoft. And then a wildcard. Want to go with Costco inflation fighter. Now 1000 bucks is great. Thank you Uncle Sam. But how about this? $100 every month divided among those two categories. The NASDAQ 100 individual stocks. And who knows, maybe your baby can retire off the Trump account. As long as you just keep putting in a little more money and letting those two saving systems grow. I like to say there's always a bull market summer and I promise to try to find it for you. Next on Mad Money. I'm Jim Cramer. See you tomorrow.
- [47:21]
Voiceover/Announcer
All opinions expressed by Jim Cramer on this podcast are solely Kramer's opinions and do not reflect the opinions of cnbc, NBC Univers 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 he should not be relied upon as such. To view the full Mad Money disclaimer, please visit cnbc.com madmoneydisclaimer Tipping culture is out of control. Yesterday I tipped someone just for handing me a napkin. So when hotels.com gives me up to 20% off for being a member, I finally get tipped. And you know what? It feels good. Hotels.com, members save up to 20% off at hundreds of thousands of hotels.