Mad Money w/ Jim Cramer 7/2/25

Summary

Mad Money with Jim Cramer – Episode Summary (July 2, 2025)

Host: Jim Cramer
Release Date: July 2, 2025
Platform: CNBC

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1. Introduction: Jim Cramer's Opening Remarks

[00:38 - 09:03]

Jim Cramer kicks off the episode by emphasizing his passion for storytelling and its crucial role in Wall Street investing. He stresses that understanding compelling narratives behind companies is essential for making informed investment decisions. Cramer highlights the current market sentiment, noting a slight dip in the Dow (11 points) offset by gains in the S&P (0.47%) and Nasdaq (0.94%), attributing the market's buoyancy to intriguing stories driving investor interest.

Notable Quote:
"Stories are driving much of this action. It's why the market's buoyancy continues." — Jim Cramer [00:50]

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2. Key Stories and Market Insights

a. The Importance of Storytelling in Investing

Cramer delves into his journey from journalism to Wall Street, illustrating how his ability to craft and understand stories helped him secure a position at Goldman Sachs. He underscores that focusing on significant, money-making stories rather than getting bogged down by minor market movements is crucial for investors.

Notable Quote:
"We are an inflection point people. We can either focus on the minutiae... or focus on some stories that can make us some money." — Jim Cramer [04:00]

b. Impact of Vietnam Tariffs on Big Companies

Cramer discusses the recent adjustment of Vietnam's export tariffs from 46% to 20%, highlighting its impact on major companies like Nike, Gap, Williams Sonoma, and others. He explains how the initial high tariffs forced companies to relocate manufacturing from China to Vietnam, leading to significant stock volatility. Cramer cites specific company movements:

• Nike: Stock surged 4% following tariff news.
• Williams Sonoma: Stock down over 6% for the year but jumped 2% on tariff news.
• Levi's: Experienced a positive reaction due to Vietnam exposure.

Notable Quote:
"We all knew that Nike moved a lot of stuff to Vietnam and that was the easy story. Hence why it shot up 4% today." — Jim Cramer [06:30]

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3. Caller Interactions and Stock Recommendations

a. Etsy Stock Advice

A caller from Georgia inquires about holding versus selling Etsy shares amidst a 50% loss. Cramer acknowledges the execution issues but maintains confidence in the company's core value, advising to hold and potentially buy more if the stock dips further.

Notable Quote:
"The franchise is worth more than the stock. Let me tell you about a story about Vietnam." — Jim Cramer [09:07]

b. Investment Club Testimonials

A caller from Massachusetts expresses gratitude for the CNBC Investment Club, sharing personal success stories and seeking recommendations for additional low-dollar stocks.

Notable Quote:
"That's how long ago I have been clapping my hands for you." — Caller [40:09]

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4. Banking Sector Analysis

a. Federal Reserve Stress Tests Results

Cramer analyzes the positive outcome of the Federal Reserve's annual stress tests, where all 22 major banks passed, unlocking the potential for dividend increases and stock buybacks. He details the specific actions taken by top banks:

• Bank of America: 7.7% dividend increase to a 2.3% yield.
• Citigroup: 7.1% dividend boost and a 2.77% yield, initiating a $20 billion repurchase program.
• Goldman Sachs: 33% dividend hike to a 2.23% yield.
• J.P. Morgan: 7.1% dividend increase and a 2.05% yield with a $50 billion buyback.
• Morgan Stanley: 8.1% dividend hike to a 2.8% yield and a $20 billion buyback.
• Wells Fargo: 12.5% dividend increase to a 2.19% yield.

b. Dividend Increases and Buybacks by Big Banks

Cramer praises the banks for their robust dividend hikes and substantial buyback programs, suggesting these moves signal confidence in their financial stability and future growth prospects.

Notable Quote:
"All the big banks raised their dividends by at least 7% last night. All of them now yield somewhere between 2 and 3%." — Jim Cramer [13:48]

c. Valuations and Investment Recommendations

Exploring valuations, Cramer compares the banks using price-to-tangible book value and price-to-earnings ratios, identifying Citigroup as the cheapest and Morgan Stanley as the most expensive. He underscores the relative undervaluation of the banking sector compared to the overall market:

Notable Quote:
"Our bank stocks are trading at less than the overall S&P 500, which is around 24 times this year's earnings estimate. So wow, these are out of whack. I would say they're cheap." — Jim Cramer [17:30]

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5. Managed Care Industry Crisis: Centene’s Plunge

Cramer provides an in-depth analysis of Centene Corporation's dramatic stock decline following the withdrawal of its full-year forecast. Key points include:

• Stock Impact: Centene's stock plunged over 40% in a single day.
• Reason: Lower than expected market growth and a sicker-than-anticipated enrollment base in health insurance exchanges.
• Financial Hit: Projected $1.8 billion reduction in risk adjustment revenue and a $2.75 per share earnings hit.
• Industry Implications: Indicates broader challenges in the managed care sector, exacerbated by anticipated Medicaid cuts and increased medical costs.

Notable Quote:
"Given the sell-offs in the other managed care stocks, many investors are clearly not willing to stick around to see just how bad the situation can get." — Jim Cramer [20:25]

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6. Interview with Jared Barron, CEO of the Metals Company

Cramer interviews Jared Barron, CEO of a speculative metals exploration company focused on deep-sea minerals. Highlights include:

• Business Focus: Extracting polymetallic nodules from the ocean floor, rich in nickel, copper, cobalt, and manganese.
• Strategic Partnerships: Collaboration with Korean firm Careers Inc., enhancing supply chain and market access.
• Environmental Considerations: Emphasis on lower environmental impact compared to land-based mining.
• Regulatory Support: Leveraging favorable U.S. regulatory frameworks established under the previous administration.

Notable Quote:
"We are very confident that this is the best thing we can be doing from an environmental perspective." — Jared Barron [37:14]

Cramer expresses cautious optimism, acknowledging the company's pioneering efforts but also highlighting the inherent risks.

Notable Quote:
"I always have to say, it doesn't have revenues. It could be a long-term thing, but things have broken your way and I'd be wrong if I didn't say that." — Jim Cramer [38:49]

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7. Lightning Round: Rapid-Fire Stock Questions

In the fast-paced Lightning Round, Cramer addresses quick queries from listeners about various stocks:

• Domino's Pizza (DPZ): Reiterates his bullish stance, recalling past recommendations.
• Patten International: Declines to recommend post significant stock movement.
• Joby Aviation: Considers it a potential high-growth stock alongside Archer.

Notable Quote:
"I'm very happy with Goldman Sachs and Wells Fargo. We own those." — Jim Cramer [09:05]

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8. Discussion on AI and Layoffs

Cramer tackles the prevalent narrative linking AI to recent waves of layoffs, particularly in white-collar sectors. He argues that layoffs are primarily due to companies overstaffing and not directly because of AI advancements. While acknowledging AI's future impact, Cramer believes it will ultimately create more jobs by lowering barriers to entrepreneurship and enhancing business efficiency.

Notable Quote:
"Whenever I hear about layoffs these days, the pitch is coming from a decision to emphasize artificial intelligence. That's nonsense." — Jim Cramer [43:01]

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9. Conclusion: Jim’s Final Thoughts

Cramer wraps up the episode by reiterating the importance of focusing on compelling investment stories. He remains optimistic about sectors and companies with strong narratives and sound fundamentals while cautioning against overreliance on trends without substance.

Notable Quote:
"You can't avoid today's news stories either. And I promise you I will keep telling them. Why, because that's where the money is." — Jim Cramer [08:00]

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Additional Notes:

• Advertisements and Announcements: The episode includes periodic promotions for Fidelity's Enhanced Large Cap Core ETF (FELC) and CNBC's "America’s Top States for Business" segments. These sections have been omitted from the summary as per guidelines.

• Disclaimers: The podcast concludes with standard disclaimers about the opinions expressed being solely those of Jim Cramer and not reflective of CNBC’s views.

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Conclusion

This episode of "Mad Money with Jim Cramer" offers a comprehensive analysis of current market dynamics, emphasizing the significance of strong investment narratives. From the impact of international trade policies on major corporations to the challenges facing the managed care industry, Cramer's insights provide valuable guidance for investors navigating a complex financial landscape. His discussions on the banking sector's resilience and the speculative opportunities in the metals industry add depth to his investment strategies, while his candid conversation on AI and layoffs addresses timely economic concerns.

Transcript

[Fidelity Representative]

Don't just ride the index, seek to outperform it with Felc, the Fidelity Enhanced Large CAP Core ETF. Unlike passive ETFs, FELC is run by a team of experts to adapt to market conditions and pursue upside potential wherever it's hiding. And while you get the potential outperformance of an actively managed fund, you can still buy and sell it on your terms just like any other etf. Discover Felc, the Fidelity Enhanced Large Cap Core ETF part of Fidelity's suite of active ETFs. Learn more at fidelity.com felc before investing in any exchange traded fund, you should consider its investment objectives, risks, charges and expenses. Contact Fidelity for a prospectus and offering circular or if available, a summary prospectus containing this information. Read it carefully. While active ETFs offer the potential to outperform an index, these products may more significantly trail an index as compared with passive ETFs. Fidelity Brokerage Services LLC Member NYSE SIPC.

[CNBC Announcer]

Which American States are Driving Business Surviving and Thriving America's Top States for Business is back.

Which state will take the honors this year?

The list revealed July 10th and streaming on CNBC.

[Jim Cramer]

Hey, I'm Kramer. Welcome to Money. Welcome to Kramer. Go do it. Make friends. I'm just trying to make you a little money. My job is not just entertain but dedicate to a little teaching. So call me at 1-873CBC. Tweet me. ImKramer. You know why I first got into this wacky business? Stories. Stories. That's why. Tremendous, intriguing stories. Tales that could explain what's going to happen and you could actually make a little money from them. And that's what's happening right now. And the stories are driving much of this action. It's why the market's buoyancy continues. Dow dipping 11 points S&P advancing 0.47% Nasdaq filled with stories of great potential gain 0.94% House of Pleasure Let me tell you more about my obsession with stories. When I got out of college, I became a reporter. I loved telling stories. I write them every day. In that business. It worked. But holy cow, for the first three years, I never made more than $179 a week. By the end, I was loaded out of the backseat of my Ford Fairmont. Suboptimal When I started looking for a job on Wall Street, I set my sights on Goldman Sachs because I figured stories could matter there more than anywhere else because it was known as an equities house. I was right. So I met this guy, David Darce he was a Harvard Business School party I crashed at the Ritz Carlton, downtown Boston. I could see that he was bored stiff with all the HBS hangers on around him. So I pushed my way into the inner circle, got ready for his questions. Sure enough, ESD assembled. If they were stock, which one would they be? Well, none of these nerds said anything, so I piped up. I would be Exxon biggest in market cap biggest in revenue. I said that was child's play. Hit me with something hard. Come on, challenge me. Dar smiled, grabbed me by the arm, took me to see the fantastic partner in charge. Okay. There were probably three dozen interviews in two years before I ultimately got the job at Goldman, including one day where I was waiting in an office for someone to interview me, getting there at 9am as I was supposed to and staying until 5pm no one came in when I poked my head out. Everyone going home. I regarded that as a minor setback. Called the next day saying that while I learned a lot because I bought a lot of reading material, next time I'd like to meet some actual people, have a few conversations as a way toward perhaps getting a job. I was told that the solo treatment was meant to be a source of discouragement because I was not wanted. I said that I expected that to happen a lot on the way to getting the job. And I found it somewhat of an obstacle, but not anything I couldn't overcome. Couple more days where I was interviewed and turned down and turned down. I kept showing up. Finally got the job. You know why I was confident that the job would be mine always? Because I knew how to tell a story. David Darc, whom I saw just Monday night, always champion me because of my brazen Exxon answer, because of my storytelling ability. I bring this up right now because we are an inflection point people. We can either focus on the minutiae 20 basis point move in the 10 year, 10,000 jobs lost in some cohort. Tomorrow, a Federal Reserve chairman who wants to see if tariffs cause inflation because they always do. We can obsess about a Fed governor who agrees with Chairman Powell in some ways and disagrees with others. Sorry, didn't mean that. Or we can keep an eye on all of that but focus on some stories that can make us some money. That's not crass. That's our ultimate goal. Not the prediction of when the Fed will move or new Fed governor gets appointed. Let's not mince words. We're trying to make money here. So let me tell you about a story about Vietnam. Back in Liberation Day, the president set a 46% tariff on exports from Vietnam. Hardliners in the White House believe that China had infiltrated Vietnam, taking over a lot of commerce. Now, I knew this story. Why? Because I had read Eric Ambler's fabulous novel Passage of arms, written in 1959, which included ample description of how China controlled all the big industries, especially finance, retail and small industry. Of course, that was a very long time ago, before the Sino Soviet split, China's war with Vietnam over who would control Cambodia, et cetera. Now, I don't know if the hardliners in the White House are Ambler fans, but this 46% tariff put the kibosh on so many big companies that moved their manufacturing from China to Vietnam. Now, see, they made that move to stay on President Trump's good side, but it did the opposite. They know nothing. Since then, I've watched some of these apparel and furniture stocks get annihilated by their unlucky supply chain shift out of China into Vietnam. But today we found out the Vietnam tariff would only be 20%. Not great, but certainly less than what Trump proposed on Liberation Day. We all knew that Nike moved a lot of stuff to Vietnam and that was the easy story. Hence why it shot up 4% today on top of a lot of other points since it reported. Hey, but I have some other stories. I remember having Richard Dixon, CEO of Gap on the show right after the unfortunate Liberation Day tariffs in after his quarter stock was crushed. Decent story, Good rally. Laura Albert, CEO of Williams Sonoma, moved the ton of manufacturing to Vietnam. Her stocks down more than 6% for the year. Intriguing. Jumped more than 2% on the tariff news, but that's nothing. Hey, Levi's had a decent story when it reported some Vietnam exposure there. RH Steel Restoration harbor feels dicey, especially with that balance sheet, but it could be a nice short squeeze. Looks I'm telling stories here. Given all the product that they've sourced in Vietnam. Who else? Okay, I got a wild one for you. Contour Brands, the parent of Lee and Wrangler Jeans. They have almost no manufacturer in Vietnam. Forget that. But it just acquired Helly Hansen, the outdoor apparel company affectionately known in the Kramer family as Helly R. And Vietnam is a major manufacturing hub for them. Oh, I like that story. What else? All right, those who own Whirlpool have been long time sufferers. One of the stocks I first bought, 1983, it's pretty much the same price. It's hurt because it's the only real American manufacturer in the industry and all these other countries dump their appliances on our country. LG and Samsung by the way are from Korea and hires from China. They bought the GE appliance business but now they're facing some big steel tariffs. Suddenly whirlpool's in the driver's seat. They could be beneficiary of these foreign companies. Wow. It just ran 35 points though. But it's still a good story. Let me give you another story. The dollar keeps getting killed, right? We keep hearing chatter all day about how it's dangerous that the greenbacks at a four year low. Dangerous? I can't believe my ears. Have these naysayers ever been on a consumer packaged goods conference call? Practically every country on earth loves to devalue their currency in order to make their exports more competitive and kill our. Kill our competition, kill our commerce. Go listen to a Procter and Gamble any call and you know what year. They're always complaining that the dollar is too strong. So when their big earnings from overseas in this great company are translated back to our currency, their profits are dramatically lower. Now I don't like property gamble stock that much here, but it's pretty obvious they'll be able to beat the numbers thanks to that weaker dollar. Oh, and I don't want to go too far afield. The meme buyers after yesterday's takeation, they're right back. They're buying Palantir, the ultimate story stock. They're buying Coinbase, they can't stay away from that. And Robinhood, I mean like you know, man in I expect palantir currently at 132 and change to go to 200 this quarter. Can't avoid buying another data center. Welcome back in video and don't forget its fellow travelers like Texas Instruments, Broadcom, NXP Semiconductors, semi semiconductors become the new software stocks and the huge deal Oracle after the close. You can read about it. Here's the bottom line. Just like you couldn't ignore the choice of Exxon 38 years ago and all the metaphorical power of a good solid story with a solid dividend, you can't avoid today's news stories either. And I promise you I will keep telling them. Why, because that's where the money is. Let's go to Thomas in Georgia. Thomas.

[Caller]

Hey Jim, thanks for taking my call.

[Jim Cramer]

My pleasure.

[Caller]

I've phoned in a couple times and I've never taken the time to thank you and Jeff and the team for the incredible product that is the CNBC investment club.

[Jim Cramer]

Okay, that's Talking about and thank you. We're about to have our annual meeting. I can't wait. I've been working on it around the clock, but that's because I'm having trouble sleeping right now. How can I help you?

[Caller]

Well, I've. I've owned Etsy since the pandemic and I took about half my basis off back in 2021 at the 250 to 280 level. A very different valuation compared to now. And I'm currently sitting on the remainder of that basis at a 50% loss. And I guess what I'm looking for from you is a nudge. Either nudge to keep it because I do believe in the company and the management or the nudge to sell because.

[Jim Cramer]

There don't want you to sell. Now, this is a problematic story because I do believe there are execution issues. But I also think there's a core belief that there's a lot of value here and that's why the stocks at 52 after this bad quarter is not at 40. I want you to hold on to it. If it goes back to where it was at a low, I want you to buy more. The franchise is worth more than the stock. Let's go to Bill in Massachusetts.

[Caller]

Bill.

[Jim Cramer]

Bill.

[Caller]

Hi, Jim. You got me in this equity at $170 a share. Now it's at 215. I absolutely love it. I believe in everything you said about it. But if I buy it at this point I would be violating my cost basis. Is that okay with Capital One?

[Jim Cramer]

No, I won't violate my cost basis. We got in an unbelievable prices. We bought it on the way down. People were shorted. People were banging it down. Richard Fairbanks, great. If you were to come on the show, maybe I would my basis. But in the meantime we are sitting on a gold mine. And I think that stock now that they bought Discover, we're going to see great things out of them. Do not lose. I'm not saying no. It sells at 15 times earnings. I am saying we got a great basis and I don't violate it. As you know from the club. Thank you club members. I am most grateful. You can't avoid the companies with the best stories anymore. They're the key to making money right now, not minutia. Don't focus on minutia on everybody tonight. Last week, all 22 banks passed the annual Fed stress test which opened the door to dividend boost buybacks. After a host of announcements last night. I'm dealing. I'm going to tell you what I think is. Well, let's say what's what's worth noting then. Centene fell 40% today after withdrawing its guidance. What the heck is going on here? I'll give you my take and should investors dive into the metals company? Talk about a story I'm hearing how the Deep Sea Move Minerals exploration company is contributing to the renewable energy space with the CEO in one of the most speculative stocks that I've had on the show. So stay with Kramer.

[CNBC Announcer]

Don't miss a second of Mad Money. Follow imkramer on X. Have a question? Tweet Kramer Madmentions. Send Jim an email to madmoneynbc.com or give us a call at 1-800-743-CNBC. Missed something? Head to madmoney.cnbc.com.

[Fidelity Representative]

Don'T just ride the index, seek to outperform it with FELC, the Fidelity Enhanced Large Cap Core ETF. Unlike passive ETFs, FELC is run by a team of experts to adapt to market conditions and pursue upside potential wherever it's hiding. And while you get the potential outperformance of an actively managed fund, you can still buy and sell it on your terms just like any other ETF. Discover FELC, the Fidelity Enhanced Large Cap Core ETF part of Fidelity's suite of active ETFs. Learn more at fidelity.com felc before investing in any exchange traded fund, you should consider consider its investment objectives, risks, charges and expenses. Contact Fidelity for a prospectus and offering circular or if available, a summary prospectus containing this information. Read it carefully. While active ETFs offer the potential to outperform an index, these products may more significantly trail an index as compared with passive ETFs. Fidelity Brokerage Services LLC Member NYSE, SIPC.

[CNBC Announcer]

The potentially pivotal June jobs report. What will the data indicate about the strength of the labor market, implications for the economy and the Fed Employment numbers and analysis squawk box tomorrow, 8:30 Eastern and streaming on CNBC Plus.

[Jim Cramer]

Last Friday night, the Federal Reserve released the results of its annual stress test for the major banks. All 22 of them passed, which gives these companies more leeway to raise their dividends and in some cases even roll out new buybacks. But because all these announcements came at the same time last night, it can be tough to get keep track of them. It's tough to keep the fight out what's going on here? And that's why tonight I want to go over what's changed for the six big banks. That's bank of America, Citigroup, Goldman Sachs, JP Morgan, Morgan Stanley and Wells Fargo now taking them one by one. Bank of America announced a 7.7% dividend increase and now it's got a 2.3% yield. Citi announced a 7.1% dividend boost. Now it supports a 2.77% yield. Citi also stressed that they'd started a $20 billion repurchase program in January and so far this year they bought back 3.75 billion billion with the stock. So they still have enough ammo to shrink their share account by roughly 10%. Goldman Sachs, which we own for the Chapel Trust, is a long. Well, let's just say it. It's had a smaller dividend payout than its peers for a long time, but also just announced a major 33% dividend boost. Now, even after that, the Stock only yields 2.23%. But that is no longer chintzy. The big dog in the banking sector. J.P. morgan announced a 7.1% dividend boost. That gives the stock a 2.05% yield, or that is the lowest the group. But J.P. morgan also announced a massive $50 billion buyback and that would shrink the share count by about 6%. These levels. Morgan Stanley said they're putting through an 8.1% dividend hike, which translates to a 2.8% yield with the stock at these levels. They also announced a $20 billion buyback, which works out to be almost 9% of the bank's current market capitalization generous. Finally, as Wells Fargo, another charitable trust holding and a company that's been on a regulatory winning streak since a month ago when the Fed lifted the asset cap that's been holding them back for seven years. Wells Fargo announced a 12.5% dividend hike, which brings that yield up to 2.19%. So all of the big banks raised their dividends by at least 7% last night. All them now yield somewhere between 2 and 3%. And two of them, JP Morgan and Morgan Stanley, get extra credit for announcing major new buyback commitments. With all these higher dividend yields, we have to ask ourselves, okay, which banks are, let's call them the cheapest. There are two ways to look at this. You can use the same price charities multiples that we apply to every other industry or banks are peculiar beasts. You can judge the banks based on their price to tangible book value, which represents what the business would be worth if you liquidated the entire thing overnight. I know, chimerical, but that's how we look at. When you use book value, there's a pretty wide Range of valuations here. Citigroup the cheapest trades at just.95 times tangible book value. Remember, tangible book value is what the business will be worth again in a liquidation scenario. So any bank that trades at a discount to book value, well it's unbelievably cheap. CEO Jane Fraser has done a good job of turning Citi around, but clearly she still has a long way to go. Although this company used to trade at a much lower rate rate to book value. Bank of America, Wells Fargo are the next cheapest. But they both trade at a little less than 2 times tangible book value. Used premium the City Goldman trades at 2.22 times book value. JP Morgan trades at 2.91 times book value. And Morgan Stanley the most expensive at 3.1 times book value. Remember, most expensive doesn't mean bad, it's just it's a fact. To give these numbers some context, these price to book multiples are basically the markets assigning a value to the quality of these banks franchises what the businesses are worth beyond just their assets and liabilities. Citi trades at less than 1 times tangible book value because there's still a lack of trust in the firm. Bank of American, Wells Fargo right in the middle. Goldman Sachs, JP Morgan, Morgan Stanley have the most valuable franchises. Morgan Stanley and Goldman are two tremendous investment banks. And Morgan Stanley's also got a fabulous asset management business known for its consistency and its stickiness. JP Morgan is widely seen as the best run bank in the world. And look, when you judge the bank stocks on a price to earnings basis, you get a similar story. Citigroup's the cheapest, selling for just 12 times earnings. Bank of America, Wells Fargo 13 and 14 times earnings respectively. Goldman Sachs, JP Morgan and Morgan Stanley are once again on the more expensive side. All all selling for roughly 16 times earnings. Put that perspective though, the Overall S&P 500 currently trades at close to 24 times this year's earnings estimate. So wow, these are out of whack. I would say they're cheap. Now when you consider the bank's expected earnings growth, it doesn't seem to have much of an impact on these valuations. Citi's on track to deliver 22% earnings growth in the year, the best in the group yet it has the cheapest stock. JP Morgan is one of the most expensive banks, but it's tracked on track to grow at a mere 2% clip this year.

[Caller]

Why?

[Jim Cramer]

At least right now investors are less concerned about the year to year changes in earnings power. They're more concerned about the long term durability of these earnings. Basically, some banks are trusted more than others and the trusted ones get the higher valuations even if they have not great numbers or the worst numbers. I bring all this up because so far 2025 has been a pretty darn good year for the big banks I typically don't even talk about because I know it puts you to sleep. Even with the market wide sell off in the spring, they've recovered nicely. The weakest bank of America still up nearly 11% for the year, while the strongest, Kramer Fave and former employer Goldman Sachs has rallied 25%. Much of those moves came in just the past couple of weeks, seemingly anticipation of positive results from these stress tests that were released on Friday. The results, they're all good and that bet has paid off as we got the strong results that we were expecting and now we're seeing the rewards from those results. All these six big banks now feature higher, higher dividend yields than they did at the start of the week. And some also have new robust buyback programs in place that should further support their stocks. Still, with the banks featuring discount multiples compared to the overall market, you know what, I'm, I'm not so sure that the good times have necessarily have to end for this group. I think they can continue moving higher the bottom line in this environment. I bet the big banks, some of the best investments this year yet still very inexpensive at least on earnings versus the rest of the market, have more room to run, maybe much more. As for which ones you should own, well, that's a personal choice. I'm very happy with Goldman Sachs and Wells Fargo. We own those. For the travel Trust. You got the work done for you do a little more. Hey, put them through one of these chats GPT. I don't care. But what can I say? I think they're all real good. We have money's back in price coming up.

[CNBC Announcer]

Can shares of Centene return to good health? Kramer is giving you his take on whether or not the health care company can rebound after cutting its guidance.

[Jim Cramer]

Next.

[Fidelity Representative]

Don'T just ride the index, seek to outperform it with FELC, the Fidelity Enhanced Large Cap Core ETF. Unlike passive ETFs, FELC is run by a team of experts to adapt to market conditions and pursue upside potential wherever it's hiding. And while you get the potential outperformance of an actively managed fund, you can stick still buy and sell it on your terms just like any other etf. Discover felc, the Fidelity Enhanced Large Cap Core ETF part of Fidelity's suite of active ETFs. Learn more at fidelity.com felc before investing in any exchange traded fund, you should consider its investment objectives, risks, charges and expenses. Contact Fidelity for a prospectus and offering circular or if available, a summary prospectus containing this information. Read it carefully. While active ETFs offer the potential to outperform an index, these products may more significantly trail an index as compared with passive ETFs. Fidelity Brokerage Services LLC Member NYSE SIPC.

[CNBC Announcer]

Which American States Are Driving Business?

Surviving and thriving America's Top States for Business is back which state will take the honors this year?

The list revealed July 10 and streaming on CNBC.

[Jim Cramer]

Plus take the story a little slower because it's really difficult, but it's really important for you today. Some of the biggest losers in the market were a handful of managed care companies that by a company called Centene, which handles government supported health care plans, that stock plunged over 40%. Worst single day performance of record because last night after the close, the company withdrew its full year forecast. Companies make forecasts. They're supposed to try to beat them or not. They rarely pull them. She Sentine explained that it had recently received and analyzed Health Insurance Marketplace data from an independent actuarial firm that covers 22 of the 29 states where the company operates. 17 said the data showed that overall, the overall market growth in all 22 states is lower than they expected, meaning fewer people signed up for plans from the state health care exchanges, which is a very negative development. At the same time, those people who did sign up for these Obamacare exchange plans are turning out to be much less healthy than anticipated. And people who are less healthy, of course, end up costing Centene a lot more money. Now, after its preliminary analysis of the data, Centene told us that it now expects a $1.8 billion reduction in its expected risk adjustment revenue transfers from the federal government, and that is a huge hit people. As a result, management expects a $2.75 hit to earnings per share this year, which is horrifying given that as of the most recent update in late April, Centene was looking to earn more than $7.25 per share for 2025. So what are we talking? We're talking about a 35 to 40% hit to their numbers. No wonder the stock was eviscerated. Even worse, management said that because this whole assessment was based on data from a firm that only covered 22 of the 29 states where they offer exchange plans, they have to run the numbers for the other seven states and they've, they're assuming that those states will be just as bad. In other words, their earnings just took a huge hit and it looks like there's another hit that could happen now. We haven't even seen the full extent of the problems for Centene's health care exchange plans. On top of that, Centene mentioned that its Medicaid business has, and I quote, experienced a step up in medical cost trend, end quote, in certain areas, namely behavioral health, home health and high cost drugs. And especially in certain geographies with New York and Florida. Florida called out in particular. Now as a result, management said their second quarter Medicaid health benefits ratio should be higher than it was in the first quarter. Now this is something we've seen throughout the managed care space. These insurance providers are having to pay out far more than any of them expected to cover their policyholders health care costs. Well, let's just say things are way out of whack. So what on earth really happened here? How is the managed care space suddenly collapsed under its own weight when it used to be? Steady Eddie first, there's been some noise recently about the fact that the government wants to crack down on inappropriate or fraudulent enrollments in health care plans sold on these kinds of exchanges, which were established about a decade and a half ago through the Affordable Care Act Obamacare. Basically, there are some people who aren't eligible for these government subsidized plans, but they're allegedly lying and applying for them anyway. The Trump administration is intent on rooting out these bad actors. Most of us assumed it wouldn't be a big enough problem to truly impact the health care exchanges or the companies that run these plants like Centene. What last night's announcement from Centene indicates is that there's already some attrition in health care exchange enrollment. Whether that's in anticipation of this crackdown or for some other reason and worse, what they're finding out is that the population that's remaining for the Obamacare exchanges is less healthy, meaning they require more health care, making them much less lucrative customers for companies like Centene. Basically, the people who are leaving the health care exchanges are actually some of the people that insurers want to cover. Healthier people who pay their premiums but don't require much medical care. And what's left now that the more healthy people are no longer enrolling is a less healthy population, which of course is bad news for the insurers because Sentinel is the largest player in the health care exchange space. They're getting the hardest hit. Unfortunately, I think the situation is only going to get worse. In order to account for the new situation, Sentient likely have to raise its premiums, which will lead to fewer people enrolling. The only people who will pay up are maybe the ones who are really sick. It's what one analyst today called, I quote, an insurance spiral. Overnight, two different research firms downgraded the stock, with JP Morgan and UBS both taking the ratings from buy to neutral. The UBS analyst wrote, quote, with the unexpected risk adjustment results in marketplace and persistent Medicaid cost trends, the company's near term earnings have been significantly reduced. While the company will look to reprice its exchange book, earnings will be on a small, small it'll be on a smaller membership base and quote oh boy. What does this mean for the broader industry? Well, certainly nothing good. Although Sentience uniquely exposed to the problem, so they have it a lot worse. Given the sell offs in the other managed care stocks, many investors are clearly not willing to stick around to see just how bad the situation can get. And who can blame them? While the negative trends in Obamacare exchanges are Sentient's main problem right now, it's clearly not the only issue. The higher costs for Medicaid plans are also hurting them, and higher costs for health care have been an industry wide problem for over a year now. By the way, all of these problems are happening in a world that still hasn't factored in the Medicaid cuts in President Trump's big, beautiful budget bill that passed the Senate yesterday. In the Senate's version, they're imposing work requirements on Medicaid recipients which would dramatically shrink Centene's customer base, while at the same time the bill restricts fees that are imposed on health care providers to help fund Medicaid. This stock's already falling apart and that piece of legislation hasn't even been signed into law yet. At the end of the day, the news from Centene last night amounted to a very negative development for the company itself. But it's also just the latest in a long line of bad news for the health insurance cohort, a group that's already been having a really tough time. You certainly haven't heard me give a ring endorsement for any managed care companies on this show in a long time. Just last night when we covered the horror show that is UnitedHealth Group, I said that I might be optimistic for better performances now that the old CEO has been ousted. But I also told you that it would take a while for the new CEO to turn things around. But after what we heard from Centene, I think that assessment probably way too positive. So here's the bottom line. Given this news from Centene, I think the whole managed care industry is borderline uninvestable right now. And unfortunately things will get worse for the sector before they get better. So I just can't justify telling you to own these stocks right now even after they've already come down so dramatically. Very painful story. Very. Let's go to Oscar in New York.

[Caller]

Oscar, hello, this is Oscar, longtime listener and second time caller come from Harlem in New York City. I had owned this stock for decades but aggressively trimmed my position about six months ago when it began a really ugly slide. I'd like to know if you think it's finally time to get back into Danaher ticker symbol dhr.

[Jim Cramer]

Okay, well let me tell you, we never left it for the Chabot Trust because I have faith ultimately that this company will come through. Why? I known it for 30 years. I have felt that it always does things right in the end. I am sticking by that and I truly believe that Danaher can make a comeback. This is healthcare. A lot of IPOs coming. They have China business. The China business isn't that bad. I am not abandoning Danher right here. All right. It seems like the entire managed care space is on investable right now and I can't recommend stepping in here to buy a company like Centener even after its big decline today. I hope I made it clear to you why there's multiple reasons for the problem here. Now I have much more mad money on it, including my exclusive with a very risky speculative company, the metals company, soaring over 400% this year. We have to find out more about the company mining the ocean floor for metals and I'm going to go straight to the CEO for answers. It is a story stop then I'm a believer that AI will create more jobs than it destroys. I'm sharing my thesis as well. Concerns spread regarding AI induced layoffs and all your calls Rapid fire in tonight's edition of the Lightning. So stay with. I've always made it my mission to shine a spotlight on not just the companies Wall street wants to hear about, but also the ones that you home gamers want to hear about. I think that's fine. Which brings me to the metals company. It's a deep sea minerals exploration play that's seen its stock jump more than 4% this year helped by an executive order in April by the President that gave this industry a much needed regulatory framework. While the Metals company might be too speculative for some of you. It's the kind of stock that maybe can appeal to younger people or people who are less risk averse investors. It's hard to argue with something that can quintuple in just six months. So let's take a closer look with Jared Barron. He's the chairman CEO of the metals company. To learn more, Mr. Barron, welcome to Man Money.

[CNBC Announcer]

Jim, what a pleasure. Great to see you.

[Jim Cramer]

Well, thank you for coming on. Now first, sir, I know I read a very strong endorsement about your company from an analyst who's both my friend and I think is excellent, Daniel Ives, who was talking about really some possibility of some very big things. So what I want to do first is give you the floor to tell the story because if a fellow like Dan Ives likes it, I got to know it better.

[CNBC Announcer]

Well, thank you. So we're all about opening up a new source of critical minerals. And we hear it every day. It's one of the most important geopolitical issues on the agenda. But 70% of our planet is covered by ocean. Yet we don't get any metals out of the ocean and on land. We're pushing into more and more pristine ecosystems known as our tropical rainforests to develop these critical minerals. And of course the problem with that now is that they come with enormous environmental impacts and they're generally controlled by the Chinese because they have been working with a much forward facing perspective. So we're focused on picking up these polymetallic nodules like the one in my hand and in an area about 1,000 miles southwest of San Diego. They literally sit on the ocean floor just like this. And on our license areas we estimate we have about 2 billion tons of those. Now they're really high grade of nickel and copper and cobalt and manganese. And most of your viewers will be familiar with probably copper. Now if I put all of the nickel and cobalt and manganese into copper equivalent, we're more than 7% copper equivalent. And with more than 2 billion tons of resource, there is no other resource on the planet that compares in size or quality to this one. Now of course, being the first is exciting. It comes with some challenges. What we've been doing recently is moving through the permitting process. In 2022, we showed how we can collect these at commercial scale. World class partners. We recently took.

[Jim Cramer]

A Korean company that is very big and has a great deal of money. That gave you a lot of money.

[CNBC Announcer]

I know. How lucky are we? Outside of China, Careers Inc. Are about the only company that can help US Integrate an important part of the refining step. And of course, one of the reasons why Careers Inc. Decided to make this investment is because they want to have more access to the US Market. They want to have bigger supply chain in this critical minerals arena. And of course, they also need a lot of critical minerals for their own business back in Korea. And so I think for the last many years, we've been talking about bits and we've been talking about AI, but now it's time to focus on atoms. But because of it.

[Jim Cramer]

But we should point out that for many years, but there was a regulatory regime that was unclear and would make you a lot less bankable until President Trump did pretty much say, this is an imperative. And it looks like that you're well, well ahead of everyone else in fulfilling the imperative.

[CNBC Announcer]

Indeed, in fact, for 14 years, we've been pushing this project forward. And when the President was elected last November, much of the cabinet that he chose were people very familiar with us. They'd been big supporters of ours while in opposition. And so we decided that now was the time, given the President's priority, to focus on reindustrialization. We knew that he understood the critical mineral issue, and the cabinet he chose understood our issue, and they understood how this resource could solve the problem. So in March, we announced that we were going to permit, not through this international organization that unfortunately can't get its act together, but instead through the United States. And if we cast our mind back 50 years ago, American companies led the development of this resource. It was only when the United nations got involved that things slowed down a bit, and America has full entitlement to go and pick up these nodules because sovereignty of the oceans is open to everyone. You can traverse them with shipping. You can collect the metals on the bottom of the sea floor. You can lay cables. Now, 169 countries went off and signed a treaty known as UNCLOS. America never signed the treaty. In fact, they'd been a persistent objector to the treaty. And so in 1980, America put in place the regulations, including for exploration and commercial recovery rules, that allow us to move forward. And it was really, well, the success of the election that gave us the confidence.

[Jim Cramer]

It's very clear that this is something that the President wants. Now, I do want to make the point. You do have. You've raised money. There will be people who will listen to you, and they'll say, you know what? I want in on this. And I understand that. I mean, because if we can get these metals, it's huge in the Same way that MP Materials, you know, that's a company that, that people are excited about, which means that if it jumped up, would you feel that would be the right thing to do? An equity offering and people come in, or are you confident with your cash position?

[Caller]

Position?

[CNBC Announcer]

We are very confident with our cash position. We, we announced that we finished the quarter with $120 million in the bank, plus we have undrawn credit facilities of more than $40 million. And we've really focused on getting strategic investors. We took a big investment from the Hess family in June.

[Jim Cramer]

Just that Hess Oil Company. You have someone on the board from Hess. You have venture capital people on the board who are very well qualified. I mean, there are many reasons why I believe that this could be a great company. I just want people to understand, and I'm sure you do too, to understand that it's risky.

[CNBC Announcer]

Well, I don't see it that way because it's. But it is pioneering. But that's the exciting part. I mean, we need to make critical minerals and ocean minerals sexy again. And we can do that because the engineering challenges that we have solved in the last 14 years, both onshore and offshore, are exciting. And of course people are excited about space exploration for a variety of reasons. I want to bring that excitement into ocean exploration as well. And the fact that we can pick up these critical minerals for a fraction of the environmental impacts compared to land based. And of course they also solve one of the biggest geopolitical issues that we hear everyone talking about today. And so I don't see it as risky. We proved how we can pick the nodules up at commercial scale in 2022. We've spent hundreds of millions of dollars on environmental research to show the impacts and to show the fast rate of recovery. And those environmental dollars had been spent with 20 of the world's leading institutions. We funded them, but they were free to go and do their work. And we're very, very confident that this is the best thing we can be doing from an environmental perspect because we.

[Jim Cramer]

Have to leave it at there because we've got the rest of the show. I will say this. I want, I want. There's ample research about you, many articles about you. Dan Ives at Wedbush has done a very positive piece. So I want people to do the homework. But I understand that it seems not risky from your point. But I always have to say, you know, doesn't have revenues. It could be a long term thing, but things have broken your way and I'd be wrong if I, if I didn't say that. The president wants this to work. I want to thank Jared Barron, the chairman CEO of the metals company. I'm sorry, I wish I could give you more time because it's a fascinating story. We've got so much going on. But it's great to meet you and thank you for coming on Mad Money.

[CNBC Announcer]

Thanks, Jim.

[Jim Cramer]

Okay, it's been an.

[CNBC Announcer]

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

[Jim Cramer]

It is time. It's time for the lightning plan. And then the lightning round is over. Are you ready, Ski dads have a live recursion. Let's start with Jody in Colorado. Jody. Hey, Jim.

[Caller]

Jim has done terrific. 20 years. I've been a real big fan of yours. Actually longer than that. In fact, when you were talking about DPZ, good old Domino's Pizza, it was $9. That's how long ago I have been clapping my hands for you.

[Jim Cramer]

That's absolutely true. When I recommend it.

[Caller]

Close was over 450. So that illustrates mad money makes big money. Anyhow, my question to you is maybe you might have another $9 stock waiting in the wings or something today or maybe in the future. I would love to know about that.

[Jim Cramer]

Well, I'll tell you if I had one, just offhand, I mean, I can tell you that I like Domino's here. That's my, my best hope. I do have a big, big annual meeting for the club coming up. Maybe we can give a little, little sense of some of those stocks that are very low in dollar amount. That's what you're interested in. Let's go to Blavon in Kentucky. Blavon. Thanks Jim, for taking my call. I would love to know what you think about Patent International. Yeah, no, I've been following this company for a long time and frankly, I mean it just went up so huge I can't go for it. I mean I've been waiting for this thing. It's like done nothing for ages and then suddenly, you know, it went from, you know, here's a nine dollar stock, a $10 stock. It's very interesting to me, but I don't know how it got there. It just happened like that. So I can't recommend it. After this big move. Let's go to Chris in Pennsylvania. Chris. Booyah. Jim. How you doing today? I'm doing well, how about you?

[Caller]

I'm still alive.

[Jim Cramer]

I can't complain. My question is about Leonardo Drs. Yeah, Military stock that I'm going to have to Speak to Professor Stodo about. I don't know, Leonardo. Doc Drs, I just. I gotta do more work. What can I say? I gotta do more work. Let's go to Telly. Oh, Telly. Rich in Michigan Telly.

[Caller]

Hi Jim, It's Kelly from St. Clair Shores, Michigan. Thank you for all your books you have written.

[Jim Cramer]

I appreciate it very much. Oh, thank you man. Thank you very much. What's up? What's up?

[Caller]

All right. I want to know about Joby Aviation.

[Jim Cramer]

You think this could be a 10 banger stock in the next three years? I think the chopy. I'm going to do a twofer because I'm in the mood for the nine ten dollar stocks. Archer and Joby. What can I say? I'm not going to fight them. Boeing has a flying car. Why can't they? And that lady Conclusion of the Lightning Round.

[CNBC Announcer]

The Lightning Round is sponsored by Charles Schwab. Coming up, is AI to blame for the wave of layoffs and white collar jobs? Kramer is giving you his take ahead of tomorrow's jobs report.

[Jim Cramer]

Next. Not everything is AI Take layoffs. Whenever I hear about layoffs these days, their pitch is coming from a decision to emphasize artificial intelligence. To replace some people then move them to more meaningful jobs within the organization. Ladies and gentlemen, this is nonsense. Companies aren't doing layoffs because of AI they're doing layoffs because they have too many, perhaps superfluous people. They just want to make the quarter. Sure, occasionally there are people who are replaced by robots when the jobs are dirty or dull or dangerous. That's when business brings in automation. But so far that's not what's happening on the white collar side. Yet of the vast majority of businesses I follow, why am I so certain that we aren't moving so called productive people from one job that doesn't produce much of return on investment to one that does? Simple, for the most part is still very early and experimental. So most men business just don't trust. Yet most supervisors are afraid to ship people out of software writing jobs. They think it's possible that I either won't work or work just well enough to take you by surprise when it makes staggering more mistakes. And that's especially true at the investment houses where they're terrified of embarrassing their clients. Now I'm a big believer in artificial intelligence. So I'm sure one day this will change. And some firms like Salesforce are doing their best to change it. Other firms truly are trying to get rid of the software writers. And I get that the big accounting and law firms. They will no doubt confidently use AI to handle by road documentation, huge indentures and S ones. Big firms audit documents of a company with AI. Investment houses will allow generative AI machines to reason. It'll be a breath of fresh air. But it's definitely not happening yet. Hiring hasn't slowed down in these professions. Even as in the case of accounting is a huge shortage of young talent. AI isn't being trusted here either. CEOs are just afraid to say on air that they aren't using AI. Less people think they're mozos. They're not relying on it for anything critical yet. Now before you say that eventually this transformation will be deadly for white collar jobs. We're getting the June non farm payrolls report tomorrow and if it's like the ADP report we got this morning, you're going to see layoffs from white collar jobs again. These layoffs are not because of AI. They're simply happening as business is getting weaker because interest rates are too high. But you will hear AI is the culprit because that's all we know to say. Still, even though it's not happening yet, someday AI will destroy a massive number of jobs. But I'm still a believer ultimately that I will create more jobs that it will destroy. Bye bye bye. That's because these AI platforms will make it easier for people to start new businesses at a fraction of what it costs costs right now, meaning they'll have more money left over to hire people. These new businesses will create far more jobs and will be lost by AI and the older firms. There's so much annoying red tape that small businesses owners need to handle. This is a perfect application for AI. Thank you Intuit for helping. It involves mindless regulation and almost no, you may understand, but it's very easy for say, Intuit to understand. Many of the accounting tasks that cost fortunes and cause a business to be on the ropes from day one can be taught by AI. Plus I can help new entrepreneurs reach customers for a fraction of what it used to cost and they're the right customers. Agentix Actual agents based on AI are being used because real people never had those jobs to begin with. I think those people coming out of school who know how to write software will find it tough going because white collar executives fear they're going to have to lay off the programmers once the bosses figure out how to use AI. Right. But we have to be on the lookout for companies that are laying people off and then claiming that they're just moving them over to more meaningful jobs. Don't believe it. I think this big, beautiful bill will spur big job growth, even if it blows up the deficit. However, right now, that's not happening. Instead, companies see the world slowing. They're worried about tariffs. They're worried about making the numbers. So they fire people and cover up by saying it's AI. Don't be fooled. AI is not yet a reality. It'll come in and it'll matter. But right now, no. These layoffs, they're just layoffs as companies try to make Alex says, as always, bull markets. Albert Palms are fine. Just for you. Right here on that bunny. I'm Jim Cramer. See you Monday.

[Fidelity Representative]

All opinions expressed by Jim Cramer on this podcast are solely Kramer's opinions and do not reflect the opinions of cnbc, NBC Universal 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. Kramer's opinions are based upon information he considers reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Mad Money disclaimer, please visit cnbc.com madmoneydisclaimer which American states.

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