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Dell Representative (0:00)
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Jim Cramer (0:29)
Stay ahead.
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Jim Cramer (1:09)
Hey, I'm Kramer. Welcome to Mad Money. Welcome to Kramer America. Other building friends, I'm just trying to make you a little money. My job is not just to entertain you, but to educate and to teach you. So call me at 1-800-743- CNBC or tweet me. Jim Cramer. We've now got two trade deal wins on our hands. Last week's deal with Japan and this weekend's deal with the European Union. Despite the market's muted response, Dow slipping 64 points as me inching up 0.02%. Nasdaq advancing point three. 33%. I think our country ran the table on both. First, let me just say I play with an open hand. I've never been a free trader. Never. That didn't work for a whole group of angry people in this country who sold their jobs exported to other lands. I know the era of free trade brought down the cost of a lot of things like clothes, like electronics. That certainly changed people's lives for the better. It was egalitarian. We were able to spend much less of our budgets on so much stuff that used to be genuinely expensive when I was a kid. And that's not nothing. But it also led to the de industrialization of vast swaths of America. And a substantial part of the electorate felt the sting, not just the virtue of free trade. The central mission of the Trump administration's trade policy was twofold. To bring back jobs to this country and to make it easier for our countries to do business overseas. See, the dirty secret of free trade is that America was the only country that ever played fair with this stuff. I think the president is winning on both counts. He has a much better hand than these countries and possibly the countries after this, because many of the countries in question have used our market as a dumping ground while buying very little from us. When the president comes in to negotiate, he has nothing to lose. Hence why he's getting his way. With a 15% tariff in European goods. Not so high as to preclude commerce, but high enough to make a difference. These countries won't be flooded with our stuff. They'll still be reluctant, but it looks like something will get bought, including the usual Boeing planes as well as American natural gas. More on that later. Meanwhile, we'll get the tariff money and so far frankly, the cost of these tariffs mostly eaten by the manufacturers themselves. At some point though, I guess they'll be passed on the consumer. Not yet though. Our government showed some real shrewd behavior when it got the European Union to commit to buying $750 billion in energy products from us. That should box out Russia. Even when the war in Ukraine ends, which is a big deal, because I was worried that Europe would just go right back to Russians for gas. Looks like that might be off the table. Then there are the totally opaque gifts from Europe and Japan. So 600 billion from Europe and 5,50 billion investments, loans and guaranteed back loan guarantees from Japan to help support Japanese companies investing in the US not benefit ends up helping our country in some way that's productive. Although there's no real enforcement mechanism with this stuff, we don't know what the strings attached really have to say. It's certainly better than not having these commitments though. Maybe the money can be used to fix our nation's crumbling infrastructure. Who knows. So if these trade deals are so good, then you have to ask yourself why is the market screaming higher? Why was the Dow down today? Great question. Let's answer it first. This is already a fabulous market. It's gone up almost every week since the post Liberation day lows. The rotations from tech to industrials to finance transports, almost perfect. I mean just wow. The earnings so far have been excellent. Totally justifying the rally. The the trade deal with Europe might have meant much more, but earnings season has its own pull. Quite apart from the event driven futures that blunted the advance. Don't get greedy. We are making a ton of money here. Second, there was this pressure article I read this morning about tariff on wheat. There's been drama, there's been brinkmanship, there's been old fashioned Donald Trump wheeling and dealing to the point where it almost feels like we're watching a nation sized episode of the Apprentice. But now we get the drill. You get assigned a number, percentage, some level of ridiculously high tariff. Then you work it down to 15% throwing some sort of sweetener like a natural gas Buy or a big investment and then you cut a deal. It's a colossal game of chicken that turned into some reasonable, rational decision making. We hear every winner. So at this point we just say good. We already freaked out about the terrifying Liberation Day, right? Those tariff announces just, they were frightening. We already rebounded from those lows once we realized that that was just a negotiating position. At this point, nobody's buying stocks off any trade announcements unless something's radically different, and it hasn't been. Now, they shouldn't be radically different. These are really big deals. But. But very few understand them. I don't even know if the White House understands what it gets when Japan and Europe promise those billions. Sovereign wealth fund, maybe Bitcoin reserve, new factories, robots, who knows? Certainly not me. Maybe the Japanese. The Europeans don't even know themselves. Oh, and let's remember the serial nature of this tariff story, which is so daunting. We nailed down one. We have to then focus on another. EU is huge, but now there's China. There's always a big one ahead. Canada will be very big. Mexico will be very big. We'll be doing this for months and months, hence the ennui. It's just maybe too much. There are only four weeks a year where earnings can beat general news, and this is one of them. When Amazon, Apple, Microsoft and Metal all report in one week, they're big enough to defeat the broader news flow. Even if the news is positive. In the absence of big earnings, the EU announcement might have had more impact. But not this week for the Fed meeting. Normally, a Fed meeting where you don't expect a cut is a yawner. But our president, who had the Fed chief walking around a hard hat checking out the renovations, the Federal Reserve, he'll make sure it's anything but a yawner. Regardless of the overall strength of the economy, we're going to see a level of presidential hectoring that will be painful for the markets. No chance to celebrate the EU deal with that ahead of us. Fifth, we got the labor report on Friday, and if it's weak, the President will demand an immediate intermediate rate cut. If it's strong, well, the President will probably still demand a rate cut. In other words, this week is a total gauntlet. The problem with the tariff story is that it's becoming a gigantic distraction from a terrific stock market where only Dow, which is a chemical company and Charter a cable company, have sincerely disappointed. We do have a lot of meme activity, which is always worse, and given how noisy and excessive they are, but it was tamped down today. Putting it all together, given the run we've had, given that we've seemed to have a template that our trading partners can live with. Given that we have China coming up, China, which probably will want the same rate as everyone else. Well, might be difficult. But the bottom line right now we're presuming these tariffs don't matter. What matters is earnings, unemployment, the Fed meeting and you know what? Dead last tariffs. Now, it may be a disappointment to the White House. It could be fraught. It won't be assuaged by a $600 billion from the EU or 550 billion from Japan. This week is a beast of its own. And nobody on Wall street is going to care about trade policy until the week is over. Can I go to Robert? New York, please. Robert.