Mad Money w/ Jim Cramer 7/16/25

Summary

Mad Money w/ Jim Cramer - Summary of Episode Released on July 16, 2025

Hosted by CNBC’s Jim Cramer, “Mad Money” delves deep into the intricacies of Wall Street, offering viewers insightful analysis, strategic investment advice, and lively discussions on current market trends. In the July 16, 2025 episode, Cramer navigates through significant economic developments, earnings reports from major banks, and engages with callers during the popular Lightning Round segment.

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1. Federal Reserve Dynamics and Jay Powell's Role

Timestamp: [01:41]

Jim Cramer opens the episode by dissecting the contentious relationship between President Trump and Federal Reserve Chairman Jay Powell. He explains Powell's influence over short-term interest rates and the market's reaction to rumors surrounding Powell's potential dismissal.

• Impact of Presidential Actions:
  "The President takes jabs at him every chance he gets. Unfortunately, this presidential obsession has a lot of impact on the markets." ([01:41])

• Market Reactions to Rumors:
  Cramer highlights how rumors of Powell being fired initially triggered a sell-off, followed by a sharp market rebound once the rumors were denied.
  "Now I thought the sell off on the rumor and the sharp rally on the news of the President letting Powell alone was dispositive." ([01:41])

• Interest Rates and Inflation Concerns:
  He delves into the complexities of current interest rates, inflation metrics, and the implications of ongoing tariff policies.
  "We don't know how high the tariffs are going to go and he seems to roll out new ones every day." ([05:00])

• Cramer's Stance on Powell's Tenure:
  Emphasizing Powell's prudent approach, Cramer questions the rationale behind desires to oust him, especially given the stable employment rates.
  "I think lack of confidence in firing Powell is night and day right there." ([01:41])

2. Earnings Season Spotlight: The Big Banks

Timestamp: [15:27]

As earnings season kicks off, Jim Cramer provides a comprehensive review of the financial performances of the major banks, offering detailed analyses and personal trust insights.

• JP Morgan Chase:
  Cramer praises JP Morgan’s robust performance, highlighting CEO Jamie Dimon's positive outlook on the U.S. economy despite certain risks.
  "Nothing wrong with that. At the same time, JP Morgan raises full year net interest income forecast by $1 billion." ([15:27])

• Wells Fargo:
  Addressing Wells Fargo’s mixed results, Cramer expresses his continued trust in the bank despite a significant stock drop, attributing the decline to communication issues rather than fundamental problems.
  "Still, I'm sticking with Wells Fargo for the Chapel Trust, which you follow by joining the CNBC investing club." ([16:45])

• Citigroup:
  Celebrating Citigroup’s stellar earnings, Cramer notes the stock’s surge to a 16-year high, crediting CEO Jane Fraser’s effective leadership and the bank’s strategic turnaround efforts.
  "That's really all you can ask for from Goldman and it's the stuff that's going to make the stock a much higher multiple stock and I like that." ([15:27])

• Bank of America:
  While acknowledging the bank’s stable forecast, Cramer expresses mild disappointment over underperforming segments, yet maintains a neutral stance on its overall performance.
  "I was a tad disappointed with B of A markets and banking segments, both of which fell short of expectations." ([15:27])

• Goldman Sachs:
  Applauding Goldman Sachs’ exceptional quarter, Cramer underscores the bank’s strong performance in investment banking and wealth management, anticipating continued stock growth.
  "It's a great trading firm, very strong wealth management, beginning of a turn in M and A and IPOs." ([15:27])

• Morgan Stanley:
  Highlighting Morgan Stanley’s solid earnings, Cramer remarks on the market conditions affecting its stock performance despite strong financials.
  "It's not unexpected. It is a competitive dynamic that we're very comfortable with." ([15:27])

3. Listener Engagement: Lightning Round

Timestamp: [08:56] - [45:16]

a. Stock-Specific Queries

During the Lightning Round, callers reach out to Jim Cramer with inquiries about specific stocks and investment strategies.

• Sony and International Tariffs:
  A caller from Illinois asks about Sony amidst government-imposed tariffs on Japan.
  "I think Japan's going to get the brunt. Too many soldiers there." ([09:00])

• Micron's Volatility:
  A listener expresses concern over Micron’s fluctuating stock price post-earnings.
  "I think the stock is inexpensive. But you know what the chart is saying? We got to wait." ([10:13])

• Verizon's Dividend:
  A 60-year-old investor seeks advice on Verizon’s 7% dividend.
  "I think it's okay. It's really just a bond." ([11:17])

• Cheesecake Factory's Surge:
  Questions about the rapid growth of Cheesecake Factory’s stock lead Cramer into a detailed analysis of the company’s strategies and future outlook.
  "Even with TCF’s set to report earnings the Tuesday after next, might be wise just to wait and see the latest results." ([23:02] & [31:29])

b. Strategic Investment Advice

Cramer offers personalized strategies based on callers’ concerns, often advocating for patience and informed decision-making.

• Golden Sachs and Market Sentiment:
  "When the stock starts to go lower it will often keep going lower until all the people who don't know anything are done selling and you get a terrific price from their interest ignorance." ([45:31])

• Dividends and Market Opportunities:
  "Those are the way to be able to answer the quandary. Look, I'm hoping President Trump cools it with the too late pal rhetoric." ([11:17])

c. Notable Quotes from Callers and Cramer:

• On Market Volatility:
  "The market's got a lot of winners that feel like they came out of nowhere, don't they?" ([23:23])

• On Investment Strategies:
  "Let the weakness won't last for long." ([45:16])

4. In-Depth Analysis: Cheesecake Factory’s Performance

Timestamp: [23:02] - [32:31]

Cramer dedicates a significant portion of the episode to analyzing the Cheesecake Factory’s impressive stock run, exploring the factors behind its success and potential risks ahead.

• Diverse Menu and Value Proposition:
  He attributes the stock surge to the restaurant’s extensive menu and ability to cater to a wide range of customer preferences.
  "This diverse menu eliminates the 'no vote' when deciding where to go out to eat." ([23:23])

• Operational Excellence:
  Emphasizing the company’s focus on employee retention and guest satisfaction, Cramer draws parallels to Costco’s successful strategies.
  "If there's one thing the winners in the restaurant space have in common right now, that they offer a great value proposition." ([23:02])

• Future Growth and Conservative Outlook:
  While praising current performance, Cramer advises caution, suggesting a wait-and-see approach before committing further investments ahead of upcoming earnings reports.
  "There's a lot to like about this story. But let's see how they did last month last quarter." ([26:19])

5. Market Strategies and Insights

Timestamp: [45:31] - [48:57]

In the concluding segments, Cramer challenges prevailing market sentiments, advocating for contrarian investment strategies based on thorough analysis.

• Buying on Weakness:
  "When it's down, that doesn't make it bad. When I saw Goldman down 6 I said someone wanted to buy 100 shares by 25 now by 25 a little bit lower and then by 50." ([48:57])

• Utilizing Technology for Informed Decisions:
  Cramer recommends using tools like chatbots to analyze conference call transcripts and identify genuine buying opportunities amidst market dips.
  "Check the conference call transcript. Then put it through a chat bot and ask if anything went wrong that you might have missed." ([48:57])

• Valuation Metrics Emphasis:
  Highlighting the importance of price-to-earnings (P/E) multiples, Cramer critiques the overreliance on more complex financial metrics and underscores the simplicity and effectiveness of P/E in stock valuation.
  "I never paid. I don't pay it that much. Mine, I am at heart a price to earnings multiple." ([48:57])

6. Final Thoughts and Market Outlook

Timestamp: [45:31] - [49:39]

Jim Cramer wraps up the episode by reiterating his investment philosophies and offering a forward-looking perspective on the markets.

• Contrarian Approach Encouraged:
  "More markets sell by problems where I find just for you right here on Man Money." ([48:57])

• Encouragement for Investors:
  Cramer motivates listeners to remain vigilant and proactive, leveraging market fluctuations to their advantage.
  "Weird Money is back." ([45:16])

• Disclaimer and Advisory:
  The episode concludes with standard disclaimers emphasizing that Cramer’s opinions are his own and should not be solely relied upon for investment decisions.
  "All opinions expressed by Jim Cramer on this podcast are solely Cramer's opinions..." ([48:57])

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Conclusion

In this episode, Jim Cramer offers a blend of macroeconomic analysis, sector-specific insights, and personalized investment advice. He navigates through the complexities of Federal Reserve policies, evaluates the financial health of major banking institutions, and engages actively with his audience during the Lightning Round. Cramer's emphasis on contrarian strategies, coupled with his in-depth analysis of individual stocks like Goldman Sachs and Cheesecake Factory, provides listeners with a comprehensive understanding of current market dynamics and potential investment opportunities.

Transcript

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[Jim Cramer]

Hey, I'm Kramer. Welcome to Mad Money. Welcome to Kramer. I'll be my friends. I'm just trying to make a little money. My job, not just to entertain, but to educate, teach it. Call me at 1-800-7-for3 CBC tweet me at Jim Cramer. Maybe you hate Jay Powell. Maybe you love him. Maybe you have no idea who he is. Regardless, what you need to know is that he's in charge of the Federal Reserve. So he controls what's known as short rates. That means the short term interest rates there are like the ones you borrowed today and pay me back tomorrow. The President appointed the head of the Federal Reserve, and in this case it was President Trump who hired Powell during his first term. Trump now thinks Powell is doing a terrible job because he won't cut interest rates. So the President takes jabs at him every chance he gets. Unfortunately, this presidential obsession has a lot of impact on the markets. Today, for example, we got hit on rumors that Trump will fire Powell. And then the market came back when the President said it's not True. Dow only gaining 231 points. SB advancing.32%. Nasdaq climbing point to 5%. Now I thought the sell off on the rumor and the sharp rally on the news of the President letting Powell alone was. Was dispositive. And I am going to tell you why the President wants Powell. But when we got a whiff of the rumor that he'd take action, longer term interest rates went up with the sacred 30 year treasury going from 4.9% to 5.07. Now that was done in an hour. I know it's small, but you know the direction directions for interest rates to go higher Bad. At the same time The S&P 500 went from 6254 to 6201 on the rumor but then rallied back to 6263 after the denial. Good. So clearly the stock and bond markets don't want Powell getting ousted. Isn't that. That's night and day right there. Boom. Now is Powell the issue here or is that the Wall Street's terrified of the idea that the President might be able to fire the Fed chief, something he's not supposed to be able to do. Legally, he doesn't have the authority. But the Republicans control all three branches of government right now. In terms of guy, of course there are still institutions that are concerned about Federal Reserve independence. But they're financial institutions, not political ones. The financial institutions don't have as many divisions as the political ones and they never will. What is rarely talked about is why Powell even bothers to stay. What's the point of taking this now? As someone who's had his share of national ridicule, it's not something you look forward to. But when you look at the action, the stock and bond markets today, how we went down when the rumor was first floated went up when the President walked it back. It's worth asking why stocks didn't soar when we thought Powell was getting fired. Soar? Stocks supposed to benefit from lower interest rates, right? You cut rates, you get better format business formation, you get stronger employment. Housing market gets stimulated by teaser rates. So why didn't stocks blast off when we heard Powell, who is standing in the way of all that, was sacked, why didn't. Why did the market go up? Question one that I think the President has to be pondering. But therein lies the problem. The market at least today is saying that Trump might be very wrong about firing power. What's the case for firing this man? We spoke to presidential adviser Peter Navarro last week and he thinks a good reason to fire him is that he's got a terrible track record. According to Borrow 2018, Powell took rates up in the face of incipient weakness. 2021 he didn't take rates up because he thought that inflation was transitory. I'll admit the Powell is not perfect. Nobody bets thousand. But we have to ask, should we judge him harshly for holding rates steady right now? Or to put it another way, why hasn't Powell started cutting rates again? We had a cooler than expected PPI number today that could make it easier to justify a rate cut. Right? But how about inflation? The incredibly important consumer Price index from yesterday had some prices that had some signs of inflation from the President's tariffs. Higher prices for clothing, furniture, cleaning products, food away from home, meats, poultry, coffee, gasoline, even soft drinks. That's a long list. Now is the tracing right? Appliances and canned fruits and vegetables went up because the tariffs were certain. We know from ConAgra that the price of tin cans went higher. Tariffs on aluminum make cans, including soda cans, more expensive. Korean and Chinese appliances went up in price because of that steel tariff. That helps give Whirlpool an edge, but it hurts you because you have to pay more. Coffee imported. So the fall of the tariffs. Meat and poultry, that's more problems with due to herds and flocks. Furniture to move out of China raised prices. Same thing with clothing Tariffs are the issue against all this though if you know where to shop. Not something that they put in these numbers. Amazon, Wal Mart, Costco, the prices are tame. Come on. Score one for the President. However, we don't know how high the tariffs are going to go and he seems to roll out new ones every day. We don't know if there's going to be doublings or even triplings on some countries. We haven't seen the car and truck tariffs that we all fear. We haven't seen how much the imported parts of a house drove up the price of homes. We're nowhere near finishing tariffing. And that's what Powell wants to wait for. That's why. That's why he's on hold. He's prudent. Score one for Powell. So what's the case against Powell's patience? If you believe the economy's about to fall apart, then there's no time to wait. But we just heard from the big banks over the last two days. Not one of them said the consumers heard a lot of. That's because it's still incredibly easy to find a job. Sure, there are lots of layoffs at the banks themselves, but there aren't a lot of white collared workers without jobs. I find it very hard to worry about A downturn when employment's at 4.1%. That's the problem with President Trump's position. The Fed's supposed to cut in a slowdown, but we don't have a slowdown. And the only thing that might cause one is the President's tariff policy, its paradoxical Mexican standoff. If Powell doesn't wait, if he cuts front running the August set of tariffs, he'd be caving. And if he's wrong, he'll look like a fool. He has absolutely no reason to cut other than to stop the hackley. What's in it for President Trump if he tries to fire Powell? I think we saw it today. Nothing. The stock market would get rocked. Long and term interest rates would rise. What president would want that to happen? If I were President Trump, I'd wait to see what happens with his tariffs. As long as inflation stable two and a half months from now, then by all means, bash power for refusing to cut rates. But today should have been a real wake up call. For who? For the President. He does himself no favors if he fires Powell. Even if you thought Powell is a doofus, which he most decidedly is not, you would still be fighting all the usual enemies you charged. The Fed's independence. I'm one of them. It's been good for. It's good, good policy for a great nation. It's worked, ain't broke, don't fix. So, Mr. President, write down this one. May 15, 2026. That's when Jay's done. His loyalty is clear to the country. Can't be that. Plus this whole rap about how Powell may have spent too much money in the Federal Reserve renovation. Was he like that guy is like his house. Trump's credibility is hurt by this. Does Powell look like a guy who cares about this stuff? Does he? Does he like a contractor? Honestly, the guy's so intense about his job that if you told me he didn't even choose the color of paint, his own office, I believe you. Bottom line, I hope today is the last day that Trump goes after Jay Powell, whose term ends in 10 months anyway. God, for Powell only hurt Trump the same way it hurts the markets. And I don't think the President's a masochist. At the end of the day, we're either going to see more inflation or not. If inflation really does pick up, firing power won't matter because the rest of the Federal Market Committee won't let him cut either. Mr. President, sometimes this is genius by me. It's better to leave well enough alone. Hey, let's go to Tom in Illinois, please. Tom.

[Caller]

Hey, Jim. Thanks for taking my call.

[Jim Cramer]

My pleasure. What's up?

[Caller]

I wonder what you think about Sony. I know the government's coming after Japan with tariffs. How do you think that will affect the stock?

[Jim Cramer]

I don't want to be there. I don't want to be there because I think Japan's going to get the brunt. Too many soldiers there. We've done too much for them. I think that Japan and Korea. The next wave is what I think that Jay Powell is worried about. To the next wave is going to be really. It's just going to be. Let's go to Rick. Illinois, please. Rick.

[Caller]

Jimmy. How are you today?

[Jim Cramer]

I'm at a pretty good day. How about you?

[Caller]

It was okay except for this poll announcements during the day. A little bit upsetting, but we move on. Jim, I've been an accolade of yours since. Since Kramer and Kudlow.

[Jim Cramer]

No, that's not possible. Because it was Cutler and Kramer. I lost the coin flip. I wanted Kramer and Kudlow. I mean, let's just tell the truth. After 25 years, it's time to tell the truth. I wanted Kramer and Kudlow. So did my dad. All right, what else? What else? Yeah.

[Caller]

And now I'm a member of the club. And my question to you is, what's with Micron? They reported earnings. They were outstanding. Made a new high at 137 and now it's like they're going out of business.

[Jim Cramer]

I got to tell you, I look at it every day. You know, I said, what's with micron? Three times today. I think that run from. From 70 to 130 really got people spooked. I don't know. Now everyone's talking about how the charts bad. I'm with you. I think the stock is inexpensive. But you know what the chart is saying? We got to wait. I'm going to obey the chart. I just am. I'm going to obey the chart. And anyway, I like Nvidia. Let's go to Anthony in Florida. Anthony.

[Caller]

Hey, Jim. I just want to tell you I'm a member since day one. And I love the 1020 meetings. I do not listen with you and Jeff, they're really great.

[Jim Cramer]

Jeff works so hard. When he goes out to lunch, he goes out for like 30 seconds. It's incredible. The guy is so intense. I love it. I sit right next to him and he is so dedicated to the club. It is fantastic. Fantastic. He's dedicated to you. How can I help?

[Caller]

I appreciate it. I'm 60 years old and I still got some time to stay in the market and I want to get some dividends. And Verizon is my company that I have. What do you think about Verizon with a 7% dividend?

[Jim Cramer]

I think it's okay. It's really just a bond. I mean, there's a lot of competition now in the telco business. You know, I wrote this, I wrote this book, how to Make Money in Any Market. And I had to default to a lot of the real estate estate investment trusts and to a lot of the, the massive partnerships in the oil market. Those are the only place where I see really great value in dividends right now because the stock market has run so much. It's a quandary, but those are the way to be able to answer the quandary. Look, I'm hoping President Trump cools it with the too late pal rhetoric. I find it seem too insulting for me at this point. I think he's only hurting himself and of course, the markets, too. On Man Money tonight, with earnings season kicking off as always with the financials, I'm thinking through the top bottom lines of all reports and giving you my take on the big bank. Then lots of surprising socks have been rallying lately, but I found one that I think takes the cake. I'll reveal what it is and whether you should take a bit, take a cut of the cheese. And we have the big bags reporting strong numbers. But what about the regionals? I'm getting the list with the top brands first of all, so stay with Kramer.

[Dell Representative]

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.

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[Jim Cramer]

Over the past two days, you've heard from all six of the financial institutions that I love. We call the big banks the four big money centers, JP Morgan Chase, Wells Fargo, Citigroup, bank of America and the two big investment banks, Goldman Sachs and Morgan Stanley. Every time earnings season kicks off, I like to go over the big banks because you know what? They tell us a great deal about the economy. What's going on, whether the Fed should be cutting or raising rates. You get the picture. This time the banks came into earnings season hot. I mean like maybe even way too hot. With year to date gains ranging from a 7% 1 to 4 Bank of America to nearly 25% for Goldman Sachs. In other words, the bar was high. So even though most of them reported good numbers, sometimes they weren't good enough to satisfy Wall Street's elevated expectations. Let's take them on by one side with JP Morgan, the biggest bank on earth by the way, three times Bigger than the next. The next. I mean, what's kind of crazy is it on Tuesday morning delivery its clean top bottom line beat loan loss provisions were lower than expected, although their net interest income came in a tad late. CEO Jamie Dimon proclaimed that, quote, each of the lines of business performed well, end quote. Though technically, the two largest segments, consumer community banking and the commercial and industrial investment bank, beat expectations handily, while the smaller asset and wealth management business was basically in line with expectations. Nothing wrong with that. At the same time, JP Morgan raises full year net interest income forecast by $1 billion. Also raises expense guidance by 500 million. For once, Jamie Dimon had good things to say about the U.S. economy. Taking up the big beautiful budget bill, but also throwing some cold water on, citing risk from tariffs, trade uncertainty and the budget deficit. Fed independent, what else? JP Morgan just announced a $50 billion buyback last month after the stress test results were released. And they could do more, but would rather not if the stock gets too high. There's a lot on the one hand or the other stuff right here. John Forbes. Love this bank look, the shares dropped two bucks yesterday, but there was nothing really wrong here at all is another good solid quarter from industry leader J.P. morgan. Wells Fargo reported the next one and this one really ruined my day because we own it for the Chapel Trust. And Wall street hated the results, even though the sales and earnings were better than expected. Some of that lower provisions for credit losses offsetting the bank softer than anticipated net interest income. Wells even cut its full year forecast for net interest income. Caused people to dump the stock in droves and me to hit the linoleum floor, always dirty with the cheap scotch, now on the company's earnings call, management tried to explain this change was intentional. Now that Wells Fargo is no longer limited by the punitive asset cap, they're prioritizing their institutional business. Think sales and trading. So whatever they lose in net interest income, they expect to make it up, make up in fees. Still, the change clearly caught everybody off guard and I didn't think they really explained it that well. Hence why the stock dropped more than 5% yesterday. Still, I'm sticking with Wells Fargo for the Chapel Trust, which you follow by joining the CNBC investing club. I hope you do. In fact, yesterday's pullback, the trust upgraded Wells. We had it as a two, we took it up to a one, meaning we think the stock can be bought right now, ultimately, I trust Wells Fargo CEO Charlie Scharf, who's really good. I think you can get the bank back on Track, it's never really off track. But you know what, it had that asset cab, it went away and now I think they got so many things going it wasn't communicated well. They need an analyst meeting. With the asset cap gone, Wells has a bright future. It's just they have, I call it a messaging problem now. Also on Tuesday morning we heard from the Senate bank which is Citigroup. This ended up being the best received bank quarter the day with the Dow with the stock jumping 13.7% and hitting a 16 year high for pulling back a bit today, not only did Citi report a big top and bottom line big, their net interest income was much, much higher than expected. More than $1 billion above the consensus estimate. I don't know why the estimates haven't caught up yet to what this, what's going on at this bank. That's the real issue. But why it keeps surprising. All five of Citi segments grew in the quarter with the best growth coming from the wealth management business of 20%, their investment banking business up 18% and their markets business up 16%. I got to hand it to even better management says they've made significant progress on the turnaround efforts and higher costs from the turnaround should start to come down next year. That's a big reason the stock caught fire. CEO Jane Fraser's turn is working and as long as the bank keeps avoiding big setbacks, doesn't get injured, I bet the stock can keep climbing. After all, Citi's still the cheapest group by a pretty wide margin. It's got a lot more to run next this morning. Back of our report, a good quarter but it was the weakest of the four majors. While the bank managed a bottom line beat, it was the only one of the four that missed on the top line thanks to a nasty net interest income miss. But it wasn't that big a miss. That said, bank of America managed to maintain its full year net interest income forecast which helped blunt the impact of the miss and why the stock didn't get hit that much. I was a tad disappointed with B of A markets and banking segments, both of which fell short of expectations and a quarter with so much volatility. Their sales and trading business should have been printing money but it didn't happen. The company shares had already declined nearly 2% yesterday, fell a little bit more today. I don't know, I can't get excited about it I guess. Now the single best report of the big banks came from Goldman Sachs. Bye bye bye. Another travel trust holding really bailed me out this one now it got me off the dirty linoleum floor sipping this stuff. They changed the owner of this, the CEO of this today and back with what I like. Pour in the best of the best to celebrate what was the best of the best. Goldman blew away the numbers I think they may have the best quarter ever for most of the divisions thanks to the red hot global banking and markets division that's the investment bank in the sales and trading operation. Investment banking up 26% year over year equities trading grew 36% fixed income currency and commodities which sometimes really blows up the joint trading grew 9% Big story though right now is the return of M and A as M and A advisory revenue grew a staggering 71% year over year 48% just versus the previous quarter and it appears with CBC this Morning CEO David Solomon explained that Goldman's corporate clients gained confidence in the quarter as the quarter went on indicating that the strength in M and A is just getting started. That is so terrific for stocks I've got to tell you we're going to see some big big M and A now that we've got common sense regulators. In the end the stock drive more than six bucks today. You know what I think is going to be up much much more. You know why? Because it is just the cheapest when it comes to eps. More on this one later. Also this morning we heard from Morgan Stanley a healthy top and bottom line beat all three of the divisions Institutional securities, wealth management, investment management beat expectations and by the way the wealth and investment management business here is on fire. They continue to see big inflows they now have $8.2 trillion in combined total CL sticky fantastic business overall very solid set of numbers in Morgan Stanley. Well why did it work? Well I think the coverage actually hurt by the fact reported the same day as Goldman Sachs Goldman had a stronger performance than everybody in investment banking, sales and trading spaces yet even Goldman couldn't rally all that much today. So it's no surprise that Wall street shrugged at Morgan Stanley's report and the Stock pulled back 1.27% that's not a lot at all. Again nothing wrong here. It just looked like the I'd less enticing right now than Goldman's numbers Bottom line overall I'd say that we had a generally strong reports from the bank big banks overshadowed by the way by the speculative stocks the stocks that are somehow related to a theory I'm more bitcoin. It's that kind of thing that's winning Even as the banks to me showed me that they could go up for a very long time. You can throw this stuff away. It's all this bad money's back.

[Dell Representative]

Coming up, Kramer's looking closer at the Cheese Cake Factory's recent run. He'll be back with his opinion quicker than it takes to browse the menu next.

[Jim Cramer]

This market's got a lot of winners that feel like they came out of nowhere, don't they? I mean, stocks are always checking, trying to feel what they are. I mean, last night I talked about imax. Well, just make it a fortune because it's the best way for struggling movies theaters to sell tickets. Today I got another one for you. Just kind of popped out of nowhere on my screen. Cheesecake Factory. Yeah, it's up over 31% year to date, chasing the 6.5% gain. The SB500 over the same period. Cheesecake Factory. So once again I'm asking what the heck is going on here? It's not obvious that she says Factory would be clean up right now, is it? They have three or 50 locations across the US and Canada anchored by their flagship brand, of which there are 215. Although they've got a bunch of others like a North Italia and upscale Italian chain Flower Child, fast casual chain where everything is locally sourced, all natural, made from scratch. And the Fox Restaurant concepts, which is more of an innovation lab for new brands. So what's the secret sauce that's driving this thing? Whether you're a regular customer or not, Cheesecake Factory is infamously. It's infamous for one thing, it's ridiculously large memo menu. It's over 20 pages long, roughly 225 different items at any given time. Of course, when you take away the roughly 45 different cheesecakes and other desserts, slightly more manageable, but they've still got a sprawling line of foods that can't get enough of those avocado egg rolls. Basically, Cheesecake Factory covers all the bases, making it a good choice when you're looking to go out with a group of friends. This is quite literally the safest option because nobody's such a picky eater that they can't find something to order here. As analysts at Goldman Sachs put it, this diverse menu eliminates the quote, no vote when deciding where to go out to eat. Plus, with its wide variety of price points ranging from 1295 for cheese flatbread to $31 for steak frites, there's a value here for everybody that's crucial in this environment. Throw in cheesecake factories, massive portions that have you leave them with leftovers. Plenty of leftovers. And the value proposition here is clear. If there's one thing the winners in the restaurant space have in common right now, that they offer a great value proposition. I mean, given the size of the stuff, it's almost like get two meals in one provide use the doggy bag, which is what my father's business was. And look, even if you're not a fan, it's hard to argue with Cheesecake Factory's annualized unit volume of $12.5 million. And that's what they make per share. And it's an obscenely large number for the restaurant industry. Everyone does marvel at these guys. Profitability high average uniforms are great, but converting into higher profits is even even better. Luckily, management's been focused on doing just that by investing in their workforce with the goal of making the Cheesecake Factory a better place to work in order to retain talent. On the last conference call, management proudly shared that they once again been named the Fortune magazine's 100 Best Places to Work for the 12th consecutive year. They got the same strategy as Costco. It's only cheaper to pay your people well because hiring new employees and then spending months to train them is a huge waste of money and really hurts the profits. At the same time, if you consistently retain your best people, that's generally good for the numbers. As management explained in the last conference.

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[Jim Cramer]

Recent operational performance and notable results were driven by our talented team and our ongoing focus on staffing and retention. Management went on to say during the first quarter we saw further improvement in our already industry leading manager and staff retailers retention, which we believe directly contributes to outstanding guest experiences, overall restaurant performance and ultimately sales growth and in fact first quarter guest satisfaction scores improved both sequentially and year over year. End quote. Hey look, it's hard to argue with those results. The customer's always right. I'm calling this the Costco philosophy, but this is also very much what we heard from Kevin Hoffman. He's the CEO of Brinker, parent company of Chili's, when he was executing his big turnaround. And look, Cheesecake Factory hasn't just been relying on improved service to jumpstart this recent rally. Cuppy's also been making changes to the menu, something they usually do to keep things fresh, just in case you were sick of the 225 items already part of this. The main reason really that these semiannual menu changes help the company stay on top of any hot food trends. As one JP Morgan analyst astutely noted on the last conference call, citing his hard hitting research of going to the restaurants and trying to all the new items. Much of these new dishes are very vegetable heavy. That's smart. I can confirm that this analyst is right, although here at Mayor Bunny we use the more cost effective method of looking up the changes online. Jamie Dimon might have to revoke that analyst company's card, but it's true they added a ton of vegetable dishes, giving you a few more ways to avoid that. No vote from your more health conscious friends or my vegan daughter. At the same time, Chise Factory has also changed the menu to offer their customers better value, something that they're planning to stick with going forward. The result? When Cheesecake Factory put its most recent quarter at the beginning of May, they delivered impressive unit level margins of 16.6%. Wall street was only looking 15.8%. Meanwhile, they're planning to open 25 new locations. They're in growth mode this year across all their brands Although only three or four of these will be cheesecake factories, which isn't much given that they currently have 215. The other concepts are doing the heavy lifting. Management expects to open six of these six to seven these North Italia locations, six to seven at flower child location and as many as eight to nine FRC restaurants. Values of these other concepts are no joke either. North Italia is unified with 7.75 million flower Charles 4.6 million. So adding new locations will be meaningful to the overall earnings. This comes out to 7% unit growth overall, which is enough to make this a pretty compelling restaurant growth story. So I like the company, but where do I come down the stock right now this thing has been red hot. Although with tcfactory set to report earnings the Tuesday after next, might be wise just to wait and see the latest results. While performance has been strong, management's remain conservative in its outlook. So the stock might sell off even if they have a real good quarter, specifically a top bottom line beat. And these impressive margins when they last reported the stock slipped the day after earnings thanks to management. His commentary that quote, the environment doesn't feel as robust as maybe three months ago, end quote. With their second quarter revenue outlook coming in below consensus expectations. So let me give you the bottom line of cheesecake. Even though management's been pretty conservative in their outlook throughout this rally, I don't know if it would be prudent for me to tell you to buy Cheesecake Factory ahead of the quarter given the stocks rallied 30% since those comments about deteriorating environment. And it's done so on very little news. There's a lot to like about this story. But let's see how they did last month last quarter. As much as I want to say let them eat cake. Maybe let this one cool off before you take a bite. Let the meat cake. Do you think I didn't do this whole thing so I could do that? I just wanted to say let them eat cake. Okay, let's go to Larry in Florida. Larry.

[Caller]

Hey Jim.

[Jim Cramer]

Larry.

[Caller]

So I'm studying for the bar down here and I've been eating a lot of pizza. I just wanted to know what your thoughts were on Papa John's.

[Jim Cramer]

Okay. I'm into fitness. Fitness pizza in my mouth. I love Papa John's. It's fantastic. And I think that, you know, look, here's the thing. The only problem with Papa John's is they changed management. The really great guy went over to from Papa John's. He went over to. Oh, to the company that. The Shake Shack. He went to Shake Shack. And you got Todd Pentagore there. And Todd, he's a really good guy, but he was at Wendy's but before. And I have watched what Shake Shack has done since and I think that Shake Shack got the better end of the deal. It's been really fabulous since Rob lynch moved over there. So I'm going to have to say we have to wait and see. I like the pizza though, very much. But I need to see how Todd does there. He's new. And that I couldn't think of Shake Shack immediately. That's just. I think I got. I had Danny Meyer on my brain. Let's go to Greg in New Jersey, please. Greg.

[Caller]

Booyah. Jim, Greg again.

[Jim Cramer]

Hey, man, what's up?

[Caller]

All right. All good. You know, maybe a little unfortunate, but I'm calling about the maker of the Baconator. I know that there's a new CEO in town, the old one left. Maybe you could give me a little news on Wendy.

[Jim Cramer]

I'm not, I. Look, other than the fact that my wife loves Wendy's so much, it's just ridiculous. I'm not liking this stock. I mean, you know, they, they cut the dividend already. The dividend now is 5%. There's something very wrong at Wendy's and the answer is you do not want to touch it. That happens to be a very tough industry, the burger industry. You want to stay away from Wendy's. All right. There's a lot to like about the stock of the Cheesecake Factory right now. But I wait a month or so before taking any action. I want to see that quarter now. Much more money ahead, including my Swiss league regional financial player. First Horizon has been so good all this time. Then there's prevail so called wisdom on Wall street that's been bugging me. Today I'm taking another look at the stock of one big bank and I'm going to tell you why I think the broader sentiment is just plain wrong. Of course. All your calls. Rap Fire. Tonight's edition of the Lightning round. So stay with Kramer as we move through the bank portion of the earnings season. Please just don't focus only on the big banks. Look at the regionals like first rise in Tennessee based bank that's becoming one of the top players in the southeast. Like most bank stocks, First Horizon had run up pretty dramatically going into the quarters. Up roughly 40% from early April lows. But the company is still able to deliver a strong enough quarter to make the stock rally this morning. But it was a small revenue beat plus a Nice. Recent earnings beat off a 42 cent basis. So what drove the beat? And more importantly, can the stock keep running? Let's dig deeper with frequent guest Brian Jordan, the chairman, President, CEO of First Horizon by now. Jordan, welcome back to Bear Buddy.

[Brian Jordan]

Thank you for having me. It's great to be here.

[Jim Cramer]

So Brian, once again, it just sounds like your customer base is pretty strong, wants to continue to do things, obviously worried about the same things everybody else is in the country, but otherwise the consumer and the person who wants to grow the business seem pretty positive.

[Brian Jordan]

Yeah, I would say given where we were 90 days ago in terms of the market reaction to Liberation Day, the customer has really become very encouraged and very confident over the course of the last 90 days. Momentum has been building across the quarter and I think we have very good momentum in the economy, broadly speaking as we transition into the third quarter in the back half of 2025. So customers are very optimistic in leaning in.

[Jim Cramer]

So this is something I've been wrestling with. I see. I talk to many bankers and many of them are saying you're a little more positive most because you have great, great franchise in great area. But I'm not hearing anything which just says, you know what, the Fed should cut rates. At the same time, I could argue that 4% is too high in history. So what do you do with the historical nature of the rates are too high versus the customer confidence in how business has grown pretty strong?

[Brian Jordan]

Yes, I look at the data and I find that I can argue it either way. You can cut rates or not cut rates. And I think we're at that inflection point and I suspect that sometime over the next six months the Fed will settle on a direction and all likelihood that is a cut or two potentially. I think the customer has become broadly comfortable with the level of interest rates or certain sectors like commercial real estate that are much harder to make work with higher interest rates and would benefit from lower rates. But I think customers are learning how to deal with whether it's higher cost of imports or whether it's higher interest rates. There's so much good going on in the US economy that customers have continued to be optimistic and really look through that and see the potential for the long term.

[Jim Cramer]

But at the same time, your CFO said when I saw how bad the mortgage data was just from last week, I guess the question is, is that a one week trend? Are we going to see see continued decreases in mortgage originations? Obviously you had a big mortgage origination. You have a warehouse business that she didn't Sound that positive? Yeah.

[Brian Jordan]

If you look at our business, the percentage of purchase money mortgages have drifted up. It's I think 75, 78% in the second quarter, 22% refinance. So the high rates is really stifled mortgage originations. But our team has done a really nice job of consolidating market share. Purchase money activity continues to be pretty steady. So the combination of the seasonality and purchase money activity in the second quarter, people buying homes, and the fact that we've consolidated some share, our balances have been strong. And as we look out, we think they'll be strong in the third and into the early fourth quarter.

[Jim Cramer]

Do you need rates, short rates to go to three for, for, let's say, for things to go even faster, or do you think that it wouldn't matter the short range of three because you're talking about long rates?

[Brian Jordan]

Yeah, I think if, if rates drop in, you know, call it 50 to 100 basis points, and I'm not advocating as much as I am, I think our business is very balanced. You'll see different parts of our business pick up and perform. Our fixed income business will, will benefit and you'll see a steeper yield curve. I think what you will ultimately see is mortgage refinance and mortgage origination activity start to pick up. Commercial real estate, which actually contracted on us in the second quarter, will start to grow again and people will start new projects, whether it be in warehouse or industrial or whatever it happens to be. So I think lower rates would actually accelerate growth in the economy. It's hard for me to anticipate the interplay between rates and tariffs at this point because there's still so much being settled. But all in all, I think lower rates would have a stimulative effect in the near term.

[Jim Cramer]

I think so too. I do not blame anyone for waiting to see what happens with tariffs. They change every week. But once you over tariffs, if you're not cutting rates, then there's something wrong with it. That's the way I feel. But now let me ask you a question. I heard something that was disturbing to me today. I did not know that JP Morgan was three times the size of any other bank in the country. Now we have a kind of an informal rule that you can't have more than 10% or whatever. That seems wrong. I'm thinking about why doesn't Brian Jordan build a national bank and instead of the big four, that report, why don't we have First Horizon be the fifth?

[Brian Jordan]

Yeah, there's, there's no way to make that math work, I think is the short answer. I think there's a real opportunity in this middle market space that we are, we do have two or three very large, significantly larger financial institutions in the U.S. but it's still a banking system made up with 4,000 plus institutions. And the needs that we all serve are slightly different. I think there's a very good place for us in this middle market space where we're serving those companies that are middle market, commercial, Main street organizations, consumers. And our footprint, given where we are concentrated in the, in the southern United States is a fantastic place to do business. So I think over time you'll see further consolidation in the industry. But for where we are today, we think continuing to generate and invest capital in our existing franchise is the thing for us to focus on.

[Jim Cramer]

One last question. You did two times ago. You came on and said there's a lot of newcomers coming in. You have to defend your turf. But don't worry, they're really short timers. Did they turn out to be short timers? Some of these guys decided to be a little less aggressive.

[Brian Jordan]

Well, I think you still see spots of aggressiveness and you can pick up the paper any day of the week and find somebody who's building branches in the South. And if I were not in the south looking to grow, I'd be looking to grow in the south as well. So it's not unexpected. It is a competitive dynamic that we're very comfortable with, we're accustomed to, and it has not been problematic. And I think our team did a fantastic job serving customers, growing the business, growing our deposit base and controlling our costs, particularly deposit costs in the context of all the competitive dynamics that are here.

[Jim Cramer]

Terrific. Well, look, another great quarter from you. That's Brian Jordan, chairman, president and CEO of First Horizon. Brian, you're always a great calming voice in a market that always seems to have something going crazy. Thank you so much.

[Brian Jordan]

Thank you.

[Jim Cramer]

Everybody's back at this break.

[Dell Representative]

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

[Jim Cramer]

Next time join the light. So isn't really clear. I don't know, tough questions out of time. I said prison GR and then the lighting round is over. Are you ready? Ski back to Lori Crim. Let's start with Lewis in Pennsylvania. Lewis. Hi there, Jim.

[Caller]

I'm from outside Philadelphia, near the home.

[Jim Cramer]

Of your buddy Jeff Lurie. Are you picking the nice over there? It's nice there. My husband was over. Fantastic. What's going on? Yes, what do you think?

[Caller]

About new gold.

[Jim Cramer]

It's okay. I mean when I buy Igniko Eco, that's the one I really really like. They're doing so well. Let's go with that. Nico, I need to go to Chip in Mississippi. Chip.

[Caller]

Hey, what's up? Chill man.

[Jim Cramer]

Not much. How about you? I'm chilling little. It's pretty hot.

[Caller]

Chilling. I'm chilling. Hey listen, I heard Blue Horseshoe like some qbts so I bought some that some really well over the last couple of weeks. My question is do you think I'm better off selling my rig which seems like I've been averaging down for a.

[Jim Cramer]

Year and a half. I want you to own this D Wave. Here's why I want D Wave because one headline, one little story and that Scott goes up 10 points. I mean I'm looking at stuff that is going up 10 points on nothing and D Wave has the ability to be able to do that because it's actually a real company. Let's go to Rick and was to going Wisconsin. Rick. Hi Jim.

[Caller]

Rick from Wisconsin.

[Jim Cramer]

All right, Rick, what's up? Thank you.

[Caller]

It's my first time in Cremerica.

[Jim Cramer]

Oh, good to have you.

[Caller]

My worst performing.

[Jim Cramer]

I said you tripped it.

[Caller]

My worst performing stock does does have a nice dividend but isn't doing much else in a bull market. Although it was up today. Should I sell, hold or even add to Bristol Myers?

[Jim Cramer]

All right, Bristol. Never seen it this cheap. We're holding it. I did have high hopes for their what I would say is their central nervous system drug. It better work. If it doesn't work, we're going to get rid of it and it will be a disappointment and it will be a shame. Let's go to Chad in Wisconsin. Chad.

[Caller]

Hey Jim, thanks for taking my call.

[Jim Cramer]

Of course. Chad. What's up?

[Caller]

Hey, you know I had to get your thoughts and opinions on this under the radar stock. It's currently rated by many as a strong buy by at least 12 analysts. It's a bitcoin fintech energy infrastructure company. It's rated about 50% below its price target. Even JP Morgan, Chase and Citi have much higher price targets. It seems like it's on the verge of a breakout. What is your thoughts on Clean Spark?

[Jim Cramer]

Okay. All right. Clean Spark is another one of these stocks that I mean frankly I didn't even know JP Morgan followed that one. I'm not so sure they do. It's another one of those stocks that one headline is going to roll. So I now say it's okay to have a speculative head look you can speculate with it as long as you understand that it's speculation and nothing more. Let's go to Greg in Michigan. Greg. Booyah.

[Caller]

Jimmy, chill.

[Jim Cramer]

Yo, man, what's the chill? What's happening?

[Caller]

Hey, listen, I've been watching you for 20 years and look forward to watching you 20 more. My man.

[Jim Cramer]

I'll go.

[Caller]

Thank you for all you do and thanks for everything I got. I recently retired. I've been watching this company for a little over a year. Did a big fat juicy dividend of 13% and it's called Flex LNG.

[Jim Cramer]

Yeah, I've been trying to figure out why that has such a big dividend. Let me go to work on that for you. Rather than just say, well, I think that dividend's safe. We gotta find out when you see dividend that high versus the rest of the market, there might be something wrong. We're going to get on it. And that, ladies and gentlemen, is the conclusion of the Lightning Round.

[Dell Representative]

The Lightning Round is sponsored by Charles Schwab. Coming up, even when a stock is down, it may not be out. Kramer speaking out against the market's prevailing thought pattern when it comes to post earnings declines.

[Jim Cramer]

Next, the stock is down. It must be something bad. That's all everyone thinks during earnings season. It's like one big echo chamber. It's astonishing to watch far more often. It's totally backwards. If a stock is down, you might be better off assuming it's a buying opportunity. I know that sounds like a really ridiculous orthodoxy, but it sure makes sense when I see like on my screen the banks and what's going on. Take Goldman Sachs, a company I worked at know very well one reason we are for the Chapel Trust. Whenever I get with fellow Goldman alums and I do, or current members, I do that too. Among the first things that come up after you talk friends and family is how cheap the stock is. Remember, lots of people use really sophisticated metrics involving replacement return on tangible equity and the efficiency ratio to measure banks versus banks. I never paid. I don't pay it that much. Mine, I am at heart a price to earnings multiple. Man, I spent about two dozen pages in the soon to be released how to make money in any Market on how brilliant the P E multiple is when you're trying to compare apples to apples. Craziest thing is that Goldman fabulous firm trades at a big discount to the average stock in the SB 500 because its earnings used to be so episodic. Notice used to be. This is something that CEO David Sullivan has worked hard to Change and this quarter showed how the company's become much more of a well oiled machine where you're going to get a number that doesn't swing wildly, good, bad or indifferent. I think this is the beginning of when the stock gets revaluated upward and the multiple is a giant upward revision and that's going to propel the stock much higher. Rocket ship, house of pleasure. So today when I saw the stock down at one point this morning after Goldman reported a blowout quarter, a truly blowout quarter quarter, I went ballistic at our investing club morning meeting show and said enough already. When it's down, that doesn't make it bad. When I saw Goldman down 6 I said someone wanted by 100 shares by 25 now by 25 a little bit lower and then by 50. That's called pyramid style buying gradually getting more bigger as it goes down. Why did I have to give that instruction? Because when a stock starts to go lower it will often keep going lower until all the people who don't know anything are done selling and you get a terrific price from their interest ignorance. We saw that with Goldman today as the stock eventually rebounded and finished the session up more than six bucks. This was their best trading quarter in history and it's a great trading firm, very strong wealth management, beginning of a turn in M and A and IPOs. That's really all you can ask for from Goldman and it's the stuff that's going to make the stock a much higher multiple stock and I like that. The number of times this kind of thing happens in earnings season is truly insane. People just don't have the time to investigate so they presume and very often they get it wrong. Here's what I want you to do. I can't promise that every decline is a mistake. While there are many mistakes made, plenty of stocks go down because they deserve it. But if you own a stock and you see it go down first check the conference call transcript. Then put it through a chat bot and ask if anything went wrong that you might have missed. I like Chachi Beatty and Perplexity to do that. The good ones will tell you what lines may have been a disappointment. Ask it to compare Goldman to the others in the industry. If it checks out the way I saw a checkout, then the answer is you need to do some buying on weakness. Why? Because the weakness won't last for long. I like to say as always more markets sell by problems where I find just for you right here on Man Money. I'm Drew Kramer. See you tomorrow.

[Fidelity Representative]

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

[Homes.com Representative]

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