Transcript
Jim Cramer (0:00)
Introducing the new Dell AI PC. Powered by the Intel Core Ultra processor, it helps do your busy work for you so you can fast forward through editing images, designing presentations, generating code, debugging code, summarizing meeting notes, finding files, managing your schedule, responding to Jim's long emails, leaving all the time in the world for the things you actually want to do. No offense, Jim. Get a new Dell AI PC starting at $699.99 at Dell.com AI PC how.
Sam (0:28)
Those ahead stay ahead homes.com knows that when it comes to home shopping, it's never just about the house or condo. It's about the home. And what makes a home is more than just the house or property. It's the location and neighborhood. If you have kids, it's also schools, nearby, parks and transportation options. That's why homes.com goes above and beyond to bring home shoppers the in depth information they need to find the right home. And when I say in depth, I'm talking deep. Each listing features comprehensive information about the neighborhood, complete with a video guide. They also have details about local schools with test scores, state rankings and student to teacher ratio. They even have an agent directory with the sales history of each agent. So when it comes to finding a home, not just a house, this is everything you need to know all in one place. Homes.com we've done your homework, Sam.
Jim Cramer (1:44)
Hey, I'm Creamer. Welcome to Mad Money. Welcome to Crane America. I'd be with my friends. I'm just trying to save you money. My job, not just entertain. Put everything into context. So call me 1-800-743- CNBC. Tweet me at Jim Cramer. When you've moved up as much as we have since the post Liberation Day lows, you better hope that earnings can justify that run. Today though, the earnings came up short. While there were many bright spots, there were enough negatives to offset any talk of a potential trade deal with China, or the strength of the economic data, or the continual parade of takeovers that would have been blocked by that previous administration. They wouldn't even thought about doing them. And that's why The Dow lost 205 points. The S&P dip 0.3%. The Nasdaq declined.38%. In fact, on the eve of wait and see Fed meeting, there was enough negativity about some parts of the economy, especially the consumer, that you might wonder if Jay Powell should simply do what the President wants and cut interest rates. Only some strength in a handful of industrials and tax seem to cut in favor of standing pat today. You know what? That might not be enough. Let me start with the negatives, because they are visible, they matter, and they cut President Trump's way. Today, three very big household name companies reported jarring quarters that made me feel like the stock market's becoming divorced from some real, real problems out there. Problems that should have been obvious given all the tariff turmoil. Consider the following from Carol Tome, CEO of United Parcel Service, after reporting a dismal quarter. Quote, despite uncertainties around trade policies in the second quarter, the overall economy remained resilient and quote, Just a second. Here we go. Quote. But our sector, specifically the U.S. small package segment, was unfavorably impacted by U.S. consumer sentiment. That was at historic lows, end quote. Wow. Very bad. Historic. A win for the president in his tip with the Fed. It gets worse. Quote, on the commercial side of the economy, manufacturing activity in the United States remains soft, end quote. Average daily unit volume declined by 7%. Now I know the UPS had its props. Profitability has been hurt by the labor agreement the company reached two years ago. Its pivot to cut dependence on Amazon traffic hurt. But Big Brown is a huge company that controls a major chunk of American shipping. So when its stock plunges more than 10%, I regard that as right. Now, did UPS present plenty of evidence of a weakening consumer? It also documented how the tariffs are already beginning to hurt consumer spend sentiment and consumer spending now. It kind of took my breath away when CEO Tomei pointed to some very strong business between lots of countries that did not include the United States. It was among the first quarters where I heard the damage that's being done to American commerce by our tariffs, damage that's not being replicated in country to country business that are not impacted by new tariffs, alas. But UPS wasn't the only one. Whirlpool, which was supposed to be helped by the tariffs at least eventually, instead got wallowed by them. Crushed. Ugly. Whirlpool's last man standing when it comes to appliances. The only one that's still domiciled this country. But the big appliance makers from South Korea and China, they're not dummies. They knew they'd struggle with the tariffs on their countries, so they front loaded their inventory, shipping lots of appliances here ahead of time. The result? The foreign onslaught crushed Whirlpool. Sell, sell, sell. It reported an astonishing weak quarter, taking its earnings forecast down from $10 per share to the 6 to $8 range. Worse, they took a meat axe to their dividend, cutting the quarterly payout from A$75 per share down to a shocking 90 cents. Let's call it a collaterally damaged situation. Because tariffs were meant to help Whirlpool, instead they blew up the divide. Include a dismal outlook is why the stock was down an astonishing more than 13% today. Oh, and if that wasn't enough, Stanley Buchan Decker, another name look in your house. You've got these really, really just whoa. It shocked me. A weak consumer who seems to have backed away from do it yourself projects, coupled with inevitable $800 million tariff hit as the company imports a huge amount of product from China and the so called reshoring safe haven of Mexico. It took my breath away. As I read over the quarter, all I could think about was that Stanley Black and Decker is the kind of company that President Trump was trying to punish for moving too many jobs overseas. That's some real punishment. With their stock down 7% today, the house of UPS, Stanley, Black and Decker Whirlpool. They form a trio of well known household companies that tell me this economy might be substantially softer than we think, at least in part when it comes to consumer and some heavily tariff businesses. Which means the Fed might really need to think about cutting rates to offset the damage in cutting sooner rather than later, these companies are experiencing the true worries we had about the tariffs while they were being slapped on earlier this year. It's entirely possible that the negative effects are one time only and will go away as we get more trade deals. Right now we're in the thick of it. You know what, it just doesn't feel good. And honestly, it's hard to dismiss them as one off when Even fintech giant PayPal revealed slower growth in payments. Blaming tariff fears, the chief financial officer Jamie Miller said, and I quote, we observed a slight softening in retail spending in the U.S. most apparent in areas likely impacted by tariffs, end quote. After all the robust consumer spending we saw when the banks reported two weeks ago, I was, I was surprised by the news from PayPal. So was the market with the stock falling more than 8%. I say out, when you rally as hard and as high as we have, you really can't afford to see this kind of weakness. Today's earnings made me feel like we'd forgotten the impact of all the tariff turmoil on the consumer. Some of the decline I think was an overreaction. Royal Caribbean went down on its outlook, but I got, I checked that one out. I think the expectations simply got too high. People got used to this cruise line just crushing the high end of the estimates didn't have now I felt the same way about Boeing. Now here's a stock that just hit a 52 week high after giving you almost a double from its low in April. Thank you Kelly Ortberg and even though reported a great quarter with beautiful cash flow, the stock still got hit today. But unlike all the others, just call me a buyer of that one. The rash of takeovers didn't for once sour didn't it didn't create any buying and not even Union Pacific buying Norfolk Southern truly creating a a continent wide railroad colossus assuming the deal gets approved. Now that's much more likely under Trump than it was under Biden. But there are legitimate antitrust concerns. I think they will get the deal done but not for a long time. Hence why Target Norfolk Southern saw its stock drop $8.72 although it's still up nicely. From my colleague David Faber broke the story a few weeks ago when you could still profit from it or Baker used buying Chart Industries gtls, a very large facilitator of capital goods including those connected with the selling of LNG liquefied natural gas. That didn't help either. Nor did the potential combination of Palo Alto Networks. She's the Castro Kramer fave and Cyber Arc, a one time Kramer Fade which is an Israeli cybersecurity company. Not even the incredible earnings news from Cadence Design Systems also a favor of the show and Celestica could help things. Cadence, a good partner of Nvidia blew away the numbers with a tremendous quarter. But who cares. I mean we knew their business was great. Sam Soleska which along with Sam Mina and Flex belonging an elite camp of contract manufacturers to vote largely to tech. They have more than their fair share of orders. It's a great time to be in that line of work as we know when we had Flex on recently after their amazing quarter. Long story short, today was a wake up call. The tariffs, even reduced tariffs are starting to roil things. The consumer is not spending as much as I thought. There is an acknowledged slowdown there. The bonds, that's right, interest rates are singing. The same rates are going down. But how much of that slowdown is because of higher prices. Something that bolsters a wait and see attitude from the Fed at tomorrow's meeting. And how much is because the consumer is worried and insecurity secure and needs a rate cut. Bottom line, I think it's a mixture of both. But that mixture might not propel the Fed into action. Without a rate cut though, we could see more quarters like we got from ups, Whirlpool and Stanley, Black and Decker, all of which are a heck of a lot more important than a Cadence or Soleska and all which are crying that a rate cut must occur sooner rather than later. It's a conundrum that makes me think that Fed chief Jay Powell's and a real pickle when he speaks. Tomorrow, I want to go to Dina in Kentucky. Dina. Jim Cramer, I'm so excited to talk to you. I'm. I just started in August and I'm really old and I have to play catch up on my retirement and. You're really old, let me tell you. I got you beat on that. I know that. I mean, don't even go there. All right, what do you got? I'm so excited to talk to you. Yesterday you were just so on fire. I just loved it. I laughed all day long. But listen, yesterday I was an arsonist. Oh, okay. It was awesome. I laughed all day. My question to you, I was so far up on Netflix, so far up. And now I just hear that it's flattened and it may not go anywhere. And I just need to know from you, should I buy more or should I? Look, let me tell you, this is something, this is an anecdotal stock. And I think right now people feel like, I don't know Netflix. What's on? Nothing. I was watching Amazon last night, for heaven's sake. So that's what I think is causing it. Don't worry, it's going to be fine. They're smart fellas. All right. I think the earnings today was a wake up call. Whether the Fed thinks so, I don't know. We gotta wait and see. Mad Money tonight, Merck reported earnings beat expectations, but the stock fell. What gives? I'm Jake Kimber, the CEO. I'm digging into a new web based design IPO launching this Thursday. And it's called figma. I'll give you everything you need to know. And Waste Management now called wm, beat earnings expectations earlier today. I'm see the CEO has to say about the positive quarter and the stock's forever strong reaction. So stay with Kramer.