Skip to main content

tv   Mad Money  NBC  November 18, 2016 3:00am-4:00am CST

3:00 am
your family. and the four things to bring peace to your life. my mission is simple, to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere, and i promise to help you find it. "mad money" starts now. hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make frs. i'm just trying to make you some money. my job is not just to entertain but to teach, put it in perspective, educate. so call me at 1-800-743-cnbc or tweet me @jimcramer. is the equity asset class itself making a comeback? are people reentering the stock market after years of hitting the exits? joining us again today where the dow gained 26 points, nasdaq climbed 0.74%.
3:01 am
donald trump. there's a sense of optimism about stocks, and that optimism seems to extend to both republicans and democrats. whether you love him or hate him, people are clearly buying stocks the way they used to before stocks became persona non-grata when it came to places where to your money. magic wand was waved that removed the gloom, busted it, and it's being transmuted into higher prices even without any facts behind this move other than the kind of throw the bums out logic that you get whenever the white house changes handing from one party to the other. but here's what's hard to argue with. many of the biggest moves i've seen in my career started without any apparent basis in the facts.
3:02 am
prominent examples from my 36 years of investing. first was when ronald reagan was elected to the white house in 1980. optimism ensued which coincided with the end of the great bear market in bonds, one that saw interest rates climb all the way to 14%. now, at the time few on wall street believed that a former actor turned politician could really make a difference at a time of national gloom. almost mourning for america. reagan turned into the good kind of mourning although you could argue he had some help from fed chief fred volcker. i think the reagan analogy has some heft. even if reagan had actually been the governor of california while trump's a political neophyte, albeit one who spent decades running a real estate empire, however this analogy is a subtle one.
3:03 am
by of a malaise, a crisis of confidence. in this latest election, i think many people in states that went democratic four years ago voted for trump because of a similar sense of national economic malaise. even though the numbers paint a very different picture. we had the lowest jobless claims today in 40 years. wages have finally begun to turn up. but after six years of gridlock in washington, it seems like voters wanted the government to try something different to boost the economy. in this case, major infrastructure spending coupled with tax cuts and deregulation. that's a lot more reaganesque than you might think because the truth is the gipper did a ton of deficit spending. the second time i saw this phenomenon is a little more obscure. it was in 1991 in alan greenspan decided to raise short term
3:04 am
the banking group, always the best and broadest of leaders, as we are seeing again this time around, just took off out of thin air until you realized that greenspan's rate hike was giving the financials a chance to rebuild capital because it meant they could get a much better return from investing your deposits. it government their earnings on track. it instilled a level of confidence in stocks that we hadn't seen since reagan was elected, and then we were off to the races. these were both specific instances where the de government didn't just stand there. it did something, and those somethings were very good for the stock market. i reach back to those two incidents because they led to growth spurts that led people back to the stock market in droves. they changed the perception of the asset class from negative to positive. the entire asset class of equities. i think that could be exactly what's happening right now. people are starting to talk about this economy being able to grow sustainably next year, perhaps by as much as 4%. that's throwing investors into
3:05 am
until this election, despite the decent returns the averages had given us, stocks had fallen out of favor as a place to put your money. i sense that view could be reversing now, which of course as someone who lives and breathes stocks, feels like fresh oxygen pumped into the room. it's that sea change, whether you like trump or not, that's fueling this rally, putting these bids underneath. i mean for years the stock market had come to feel like a bit of a moribund entity. sure we had a few stocks that captured our attention like fang. now, those stocks have momentarily lost their luster and we've got giant moves in parts of the market that have been overlooked for ages. so what happens now? here's four thoughts i can back up with plenty of different examples. first, the move in banks, it is here to stay. you get a president who wants to spend without tax hikes, and you get a fed that's going to raise rates repeatedly and multiple rate hikes can fuel a rally that won't be stopping anytime soon.
3:06 am
going to be given a pass on their earnings, even if they aren't doing well at the moment. every time their stocks come down, buyers emerge. it's almost eerie how much investors like these stock now. same with rail and airlines. third, the consumer is worth betting on because she's going to have a lot more cash if there's tax cuts. walmart had a suboptimal quarter today. but best buy, the quintessential s stock soared. people circled back to home depot today. oh, and children's place was up 13%. tonight ross stores blew away the numbers. now, that's consumer spending. notice a pattern? these are retailers of the more expensive, sort of discretionary, the kind you buy
3:07 am
believe me, the moves higher in these stocks would have stopped already if it weren't for the change in the white house. finally because there's enough new money coming into the market, we aren't sacrificing peter to pay paul anymore. plenty of people were worried tech couldn't go higher at the same time as the banks. but facebook is now higher than it was before the inflated video metric scandal hit. what does that tell you? amazon started roaring back too. these stocks feel like they've we also saw a huge lift in old-fashioned semis. now, we don't have the statistics necessary yet to confirm my new money thesis, to ratify the better light that now shines on the asset class, but here's what we do know. we've seen moves like this one that were broad and seemingly based on nothing, nothing but animal spirits, moves that were widely derided, laughed at,
3:08 am
discovered that they were rallying based on a recognition that the economy could be accelerating. and there's a belief that we'll get that growth if trump can pull off what he's promised. here's the promise line. welcome back, stock owners. we've missed you. don't worry, it's not too late. there's still lots of stocks nowhere near their highs. plenty to make a ton of sense. do some homework, find companies you like and wait. with new money coming in, they won't last for long. >> caller: jim, fantastic to talk to you. >> same. >> caller: what i like better than your enthusiasm is your stock picking ability. >> thank you. >> caller: stx. what's going to happen now that trump is going to change nafta? >> i think he cares more about tax on cars than he cares about a tax on modelo and corona. that would be an unpopular solution. i don't want a tax on modelo. well, not just because i own a
3:09 am
the constellation stocks have been unfairly punished. i want people to go back to that analyst day and you'll see a lot of good things in it about how well stz is doing. let's go to chris in new york, chris. >> caller: jim, with the proposed infrastructure repairs that trump is proposing, i wondered if you're still bullish on american water work or if there's a better way to play that. >> no, no. i think that's a long term sec reason why you sell that stock. you buy that stock because there's going to be more privatization, because that's what the municipalities have to do. let's go to john in high old home state of pennsylvania, john. >> caller: hey, jim, booyah. i watch your show every day. >> thank you. >> caller: i bought barclays after the brexit price drop in $7 range and just wanted your thoughts on the company's future. should i hold? >> yeah, i would hold it.
3:10 am
you know, you didn't buy the rbs, which is the one that i don't countenance. you bought a good bank that's doing quite well. i wish they'd come on air. by the way, ubs, you're also invited. let's get some of those foreign bankers in here. i'm an open minded fellow. all right. can you feel it? there's a sense of optimism about stocks again even if it all seems fanciful for now. in my experience, sometimes that's what you need to get things moving. on "mad money" tonight, all eyes on are salesforce tonight. we'll take a closer look when the ceo joins me right here on the set. then they came. they saw, they conquered. i'm talking about my inductees into the "mad money" wall of fame. don't miss who i'm adding to the fabled wall. and this is rally for real? one stock can tell you just that. i'll tell you which company holds the key to this market's move higher. stay with cramer. >> announcer: don't miss a second of "mad money."
3:11 am
tweet cramer, #madtweets. send jim an e-mail to or give us a call at 1-800-743-cnbc. miss something? head to can a toothpaste do everything well? this clean was like pow! it added this other level of clean to it. my teeth are glowing. they are so white. 6x whitening** i actually really like the 2 steps. step 1, cleans. step 2, whitens. every time i used this together, it felt like leaving the dentist office. crest hd. 6x cleaning*, 6x whitening** i would switch to crest hd over what i was using before. crest. healthy, beautiful smiles for life. ugh. heartburn. sorry ma'am. no burning here.
3:12 am
they don't taste chalky and work fast. mmmm. incredible. can i try? she doesn't have heartburn. alka-seltzer heartburn relief gummies. enjoy the relief. the roses are blooming in herbal essences hair is delightfully fragranced with notes of moroccan rose unforgettable, wherever you go the scents you can't forget... from herbal essences, blooming now! (coughs) cough doesn't sound so good. take mucinex dm. i'll text you in 4 hours when your cough returns. one pill lasts 12 hours, so... looks like i'm good all night! some cough medicines only last 4 hours. but just one mucinex
3:13 am
o, that looks gross what is that? you gotta try it, it's terrible. i don't wanna try it if it's terrible. it's like mango chutney and burnt hair. no thank you, i have a very sensitive palate. just try it! guys, i think we should hurry up. if you taste something bad, you want someone else to try it. it's what you do. i can't get the taste out of my mouth! if you want to save fifteen percent or more on car insurance, you switch to geico. it's what you do. shhh!
3:14 am
what to do with the stock of salesforce. let's go to the man himself, fresh off a great quarter, here's mark benioff, the visionary co-founder, chairman, and ceo of salesforce. mr. benioff, welcome back to "mad money." >> jim, good to be here. >> good to have you in person. you put out a number more than 10 billion. we've been waiting for that. it finally happened, and you're putting out a 20 billion number which means you're not just thinking about thite >> it's very exciting. you can see the growth. it's incredible. you saw 12 billion on and off the balance sheet. that's amazing. >> last time you were here you were actually disappointed in yourself. you think there was business that could have closed that didn't. this is just back on track to the point where you actually are giving a forecast that's much further out than any other ceo i've been dealing with. >> last quarter we had that unexpected foreign exchange head wind. we talked about, the fall of the great british pound. we're past that. we had a great third quarter. we're anticipating a great
3:15 am
we're looking at a great year next year. >> i know you spent a month in japan, asia pacific up 38. is that what happens when you -- i want to talk about some customers because they seem like big wins. james gorman and morgan stanley has got a tremendous outfit. a lot of big retail but managed and done a great job. he's brought you in. what are you doing for him? >> well, you look at some of the big wins this quarter, and morgan stanley, amazing. pnc bank also amazing. and citi. three huge financial servi that was very exciting for the quarter. >> for our viewers, they're going to say why didn't you talk about amazon? that's the most exciting one. >> amazon was awesome, and t-mobile. we saw them at dreamforce and saw them expand again in the third quarter. >> i thought one was quizzical. the department of agriculture win. do you think those kinds of jobs will still be available in a different administration? >> i do. the government is transforming and they're looking to lower
3:16 am
that than salesforce. >> i know you regard yourself as an american. you don't talk about democratic or republican. that was before the election. but do you think because of some close ties with some work you did with the democratic party that it will be more difficult to procure large contracts because you're frankly not a big supporter of republicans that we know of? >> well, i'm not a republican, and i'm not a democrat either. you know that i view myself just as an american. >> right. >> i'm looking forward to a great future. president-elect if he gives you a call in. >> if he calls me, i'm happy to call him back. >> fair enough. i want to talk about what the world is like out there because this had been a feeling things had slowed. all of your geographies tell me that's wrong. i had a somewhat difficult conversation today with chuck robbins at cisco where they actually said that there were macro headwinds. not to denigrate cisco because it's a great american company, but i don't see any macro
3:17 am
>> if you remember in our last conversation, jim, we were in the second quarter and we told you at the very end of the second quarter, the very end, we saw a little bit of headwind. i think maybe that's what chuck robbins felt in this quarter and other companies like him have seen some of that. this quarter, i think we picked it up early. we had to make some shift changes in our business and now we have this great result in the third quarter. >> chuck also said this morning to me on "squawk on the street," feeling. now, maybe it's just post-election, didn't matter who won. i know it's only been a week for you. but are you -- you mean you speak with more clients than anyone. you've been in new york. you're in touch. among democrats and republicans, different feel? >> look, i think that everybody wants progress. everybody wants things to move forward. everybody is still -- we've talked about this, jim. we're still coming out of the 2008 problem. >> right. >> you know there's a huge tail on that. but you know also i've been a
3:18 am
i feel when you look at the global economy and you talk to these global customers, whether it's here in the united states, whether it is in japan, whether it is in europe, i've seen a lot of those customers burn off a lot of the 2008 problem, and i'm optimistic for what's coming in the future. so optimistic that you can see we've given guidance for more than 10.1 billion, and you know there's only been three software companies in history that have done that. >>el >> what i think is important is there was also, when i saw you at dreamforce, there was a belief that mark benioff was on a buying spree of new kinds of companies because his growth was not holding up. and i think if you're giving that long a forecast, that whoever felt that way is probably going to be -- >> well, we talked about that at dreamforce. i felt those comments were mostly coming from our competition. the reality is our core is so strong and we had these incredible opportunities to pick
3:19 am
incredible startup created by bret taylor, the former cco of facebook wants to sell us his company. you cannot turn that down, jim. and now you can go to the app store. you can download kwip and have the most incredible word processing, spreadsheet. >> let's talk about sales force's future. on the november 14th recode, our friend was interviewing you. >> i love cara. we all love cara, but she did talk about the evolution of your relationship with microsoft. it went from kind of said friend to frenemy to frankly with what you're doing with linked in, i can only call you guys enemies. >> we just had a surprise. that's all. we thought there was a new microsoft. we got a call from sacha, said, hey, we're so excited to work with you. would you spend some time with scott guthrie.
3:20 am
strategy. we met with scott guthrie, and then two weeks later, read in the newspaper that scott guthrie is now in charge of their crm business. i'm like that would have been good to know ahead of time. then i kind of was like, you know, maybe the new microsoft is actually the old microsoft. look, these were the mid-managers during that era. now they've moved up, and the culture is back. >> in the old microsoft under steve palmer, who has worked with me at harvard was a bit of a mondaypp i think your linkedin complaint would indicate you think that could happen again. >> well, i think that you see, you know, the commissioners in europe have also stated there is a very sensitive acquisition because microsoft has stated publicly -- >> at that deutsche bank conference, which i read. you're right. >> what did they say, jim? >> they said they intend to use it to take all the business? >> is that fair and is that legal? >> it was called dumb. if they had general counsel
3:21 am
and other software companies like oracle and sage and others have read that and made the same conclusion that that is something that the industry is not going to stand for. look, we want a fair playing field, and we want everyone to have a good chance. >> all right. now, i'm not going to let benioff go without talking about benioff and the corporation and where that stands with the world. that i know you think that twitter was instrumental in electing a new president. >> i do think that's true. >> and that makes to me twitter a more valuable franchise. when i saw you, twitter was at 24. now it's at 18. you're a persuasive man. you persuaded many people. why don't we say let's do it and get it done?
3:22 am
fidelity and t. rowe price, who are shareholders said, that was not for them. >> that was before they elected a president. >> you know what, i operate this company in partnership with our shareholders, with our employers, with our partners. and i have to listen to them and work together. it's my pleasure to do so. >> on that leak, we saw a bunch of companies, workday, service now, pegasystems, viva, box, that was chatter. people said, he might be any one of those. you were always looking -- >> you're reading our directors' e-mails, i see. >> they put them online wherever you want them. >> it's an open kimono at salesforce. all of our secrets are online. it's all good. you can also see we run a really clean shop. >> absolutely. now, you famously, i think, started and were able to put a stop to some legislation that you regarded as discriminatory in indiana. the man who was pro-pounding that -- >> that was a bad law. you know that. >> did he ever tell you it was a bad law because marriott thought it was bad and walmart thought it was bad. they represent another part of
3:23 am
said that law needs to change. i knew mike pence before that. i called him, hey, the law needs to change. we are the largest tech employer in indiana. it's a very important state to us. then hundreds of other ceos also called him and said please change that law, and to his credit, he changed the law. the credit of the governor in georgia, he did not sign the law. and as you know, in north carolina, there is a recount happening. >> right. >> pretty much because of the law. >> okay. >> and i certainly hope as we move forward and think about equality for all, i think this is, you know, what our country is founded on, that everyone has, i think, the absolute divine right to have an incredible life, liberty, and i think the pursuit of happiness. >> jefferson and all that. >> that's all i'm trying to do for our employees and customers. >> i need to know something. i need to know the role of salesforce doing good, business
3:24 am
last week howard schultz said he felt the business became vilified during this election. where is business and where are you in terms of business? >> i think business is the greatest platform for change. you know that, jim. i think these businesses are amazing and when you pivot them not just to your stockholders, not just to your employees, not just to your partners but to also your community, that you can do amazing things. look what we're doing in the san francisco public schools, the oakland public schools, the 25,000on free. hundreds of millions of dollars we've been able to give away with our one-one-one model. >> so we have a business president. >> i think that's awesome. >> you do? >> sure. i am someone who is let's move forward. let's have an open mind. let's have an open heart. >> well, but before -- remember, tech did kind of band together against this man. are you saying that this is kind of like appomattox? >> there was an election.
3:25 am
and the will of the american people. i respect our process. i are he inspect democracy, and i want to move forward with an open heart and an open mind. >> are there others like you or -- because a lot of people on wall street feel this new president might retaliate and -- >> i think that's silly. >> silly? and you can't wait to break bread in the white house again? >> no. i'll tell you what i'm really excited about. what i'm really excited about is that, number one, this election is behind progress. let's move forward together. >> fair enough. let's leave it there. >> is there anything more important than? >> no. >> thank you. >> all right. that's mark benioff, the co-founder, chairman, and ceo of salesforce. thank you so much. >> thank you. >> stock's up huge. >> come see us in san francisco. >> will do. "mad money" is back after the break. >> announcer: coming up, woe to the ceo who ends up on the mad money wall of shame. but this is an honor that companies covet above all else.
3:26 am
find out jim's inductees when "mad money" returns. i love you so much. that's why i bought six of you... for when you stretch out. i want you to stay this bright blue forever... that's why you will stay in this drawer... forever. i can't live without you. and that's why i will never, ever wash you. protect your clothes from the damage of the wash with downy fabric conditioner. it not only softens and freshens... it helps protect clothes... from stretching, fading and fuzz... downy fabric conditioner wash in the wow. (coughs) cough doesn't sound so good. take mucinex dm. i'll text you in 4 hours when your cough returns. one pill lasts 12 hours, so... looks like i'm good all night! some cough medicines only last 4 hours. but just one mucinex lasts 12 hours.
3:27 am
3:28 am
if you want to understand what makes for a great company and a great stock, you need to do more than just look at the numbers or the day to day action in the share price. the process of picking sto and judging companies is inherently subjective. it's squishy even because there's always a part of the story that you can't quantify. sometimes it's the most important part. i'm talking about management. specifically the quality of the people running a given company. because, listen, i'm not exaggerating when i say the ceo can make or break a business. i've seen terrific chief executives turn unremarkable companies into titans and lousy ones turn high-quality enterprises into absolute dogs.
3:29 am
difficult. you could look at a ceo's track record but past performance only tells you so much as you always hear in those ads. you can look at their vision for the future, but not everybody has the chops to deliver on their vision. what you can definitely do, though, is learn from example, and lately we've gotten examples of ceos who have created vast amounts of wealth for their shareholders by selling their companies for huge amounts of money. yes, instant, instant money for the shareholders. so tonight we're returning to the "mad money" wall of not shame, but fame. also known as hof, to celebrate an executive who has made you a fortune if you listened to my advice and own the stock. i'm talking about rick clemmer, the long time ceo of nxp semiconductors which recently
3:30 am
qualcomm, a 34% premium versus where it was trading before. this is shaping up to be an amazing deal for both sides. not only have i liked nxp semi for ages, but we actually own the stock for my charitable trust. i've got to tell you, rick clemmer has made his investors so much money over the years, that this qualcomm deal, i'm calling it icing on the cake. that's why i'm awarding clemme both to salute him for success and, more important, to show you what great management really looks like so you can spot it when someone else is doing a good job. just remember, we're interested not just in celebrating but in making money going forward. the nxp semi of today makes chips for cell phones although they've also got exposure to some of the hottest areas in tech like the connected car, the internet of things, cybersecurity. in fact, this company is the leading supplier of chips for the lucrative automobile market, which is why call com was so
3:31 am
by the way, of course nvidia had that too in spades. but here's the thing. this is not what nxp semi looked like a few years ago, and that gets to the genius of clemmer. under his leadership, this company has constantly been innovating and transforming itself, which is how a stock that five years ago was trading at just $15 gets $110 takeover bid. how did clemmer do it? rick took over as ceo on january 1st of 2009. before that, he masterminded the turnaround at agere systems, which he then flipped to lsi for $3.5 billion in stock in 2000. that's what brought him to our attention. then he spent a couple of years as an advisor at kkr, one of the private equity firms that owned nxp semi before it came public. about a year and a half after taking the helm, clemmer took nxp public. it had over $5 billion in debt, and the initial offering price was actually slashed from the 19 to $21 range down to $14.
3:32 am
no demand for the shares. not a lot of enthusiasm. but take a look at this chart going all the way back to the beginning. nxp stock spent the rest of 2010 rallying. then it stumbled hard at the beginning of 2011. after that it embarked on an amazing multiyear run and that's because under clemmer's leadership, it has spent the last six years innovating like crazy but in a very disciplined way. he didn't spend like crazy. he always focused on growing his businesses 50% faster than the competition, and he always delivered. for example, nxp helped invent what's known as near field communications technology. now, you actually know what this is. you just never heard the term. these are the chips that help make apple pay or samsung pay possible. the same technology helps to power all kinds of wearable technology, like virtually every smartwatch. if you've been to -- oh, just a
3:33 am
hey, believe me, it's great. you've been at disny land lately? they give you a magic band. it serves as a wallet, a room key, and a ride pass at the tap of a wrist. i just called my wife. this is terrible. at the same time, nxp helped create the specialized chip that's used in smart cards. also over the years, the company had gotten itself some exposure t the leading supplier of chips for radios, remote access, and mobilization. that's where they can remotely shut down your car if you report it stolen. remember harman that got the bid? all the same, everything. the smartest thing clemmer ever did came in march of 2015 when he announced nxp semi was acquiring free scale for nearly $12 billion in cash. it was widely seen as a beleaguered company but clemmer realized it had real value, particularly its divisions that made chips for autos and the internet of things, or i.o.t. which people say to confuse you. after the acquisition, the new nxp came the number one maker of
3:34 am
microcontrollers. most importantly, by purchasing free scale, clemmer reduced nxp's exposure to the smartphone market and, yes, apple in particular. you have to do that. apple is too fickle. the combined company was a diversified semiconductor powerhouse with a leading position in some of the hottest chip makers out there. now, nxp's stock surged after the deal was announced but two months later seemed to peak and sp selling off hard. so for most of this past year, many people pooh poohed the free scale acquisition. that all changed three weeks ago when after a month of speculation we found out that qualcomm, a real semi giant, was buying nxp semi. a more than 70% premium versus the stock's low. why did qualcomm want nxp? they needed to diverse too, and acquiring it gave them exposure to the internet of things and connected car.
3:35 am
because nxp bought free scale, which transformed the company into a leader in those red hot markets and made it an irresistible takeover. i think this will be a terrific deal for qualcomm, but i also think rick clemmer deserves mad props for making this deal possible and making his shareholders a fortune over the years, capping off an incredible record with this amazing sale. that's what a "mad money" wall of famer looks like. the humility of this man is extraordinary. let me give you two more potential future wall of famers because they're going to be on the ballot. i'm talking about dinesh paliwal, the ceo of harman international industries, whose stock sn wrong, by samsung. that was $112 takeover bid. the humility of this man is
3:36 am
let me give you two more potential future wall of famers because they're going to be on the ballot. i'm talking about dinesh paliwal, the ceo of harman international industries, whose stock was snapped up by apple -- wrong, by samsung. that was $112 takeover bid. considering harman traded down to 9 in the doldrums of the great recess, i think it's impressive. but he can't join the wall of fame until we know that's a done deal. same goes for really how about a picture of a great american, please? same goes for jeff bewkes, the ceo of time warner, give that at&t wants to buy his company for $107.50 a share, which was much higher than the $85 bid from fox that he walked away shareholders. i think this deal could have a hard time making it past the regulators. here's the bottom line.
3:37 am
deserves to be celebrated and commemorated in "mad money." probably won't happen anywhere else. for this sale to qualcomm, i think rick clemmer of nxp semiconductors absolutely belongs on our ceo wall of fame! congratulations, rick. and thanks for making our viewers a barrelful of mad money. mike in california, mike. >> caller: cramer, booyah! >> booyah right back at ya. >> caller: ups hit a high november 11th. i like the dividend. i like the company. they're going on a spending spree. i'd like to know where jim cramer sees it in the future. >> jim cramer likes ups, but he likes fedex even more. how about fred smith, the ceo, meeting with president-elect trump? that made me feel better about the whole shooting match. he's a trained economist. i don't know why i'm telling this -- i looked at my stage director. he's a trained economist. how about bob in my home state of new jersey, bob. >> caller: thank you for taking my call, jim. >> my pleasure. >> caller: my call is on a recent railroad mentioned, csx.
3:38 am
reaching a high this week. is there room to move up? hold or sell? >> yes, all the rails. this -- i think the rails, because of president trump and his pro coal. that's why the rails have been acting so well. tonight we congratulate rick clemmer for his work at nxp semiconductor, mainly sellin the home gamers are the one who's can reap the rewards of this incredible value creation. just remember the important role ceos can play before making your next investment. do you know the guy's name or the woman's name before you pull the trigger? do some homework. at least google them. there's much more "mad money" ahead, including the one stock that could point to whether the rally could last. i'm going to reveal it just ahead. then do your stocks have what it takes to survive the unknowns in this market? i'll be the judge of that when
3:39 am
and an electric and eclectic edition of the lightning round.
3:40 am
3:41 am
3:42 am
how can you tell when a rally is the real deal? you watch how the most loathed stock in the group is behaving. so when it comes to the seemingly endless bank rally that began when donald trump won the election, that means look no further than the stock of wells fargo. we all know that some bankers at wells fargo committed serious transgressions, abusing rules, creating false accounts in order to be compensated for what now appears to be an aggressive fraudulent cross-selling. the stock has been in a gigantic penalty box since then because of these disgraces and the subsequent resignation of ceo john stumpf, who stepped down when he realized the damage.
3:43 am
policy of tax cuts, deregulation, and massive government spending, the bank stocks have been on fire, including the scandal ridden wells fargo. that's because long term interest rates have gone up dramatically. at the same time, it's becom obvious the fed is going to raise short term rates next month and perhaps give us more hikes rapidly to balance out what the fed will likely believe is an entirely inflationary end game for the trump regime. trump also wants to dismantle dodd/frank, something that would allow banks, including wells fargo to make more money and spend less in compliance. love him or hate him, there's no denying these regulations make the banks less profitable. so we have an interesting confluence here. going into the election, everyone feared wells fargo was
3:44 am
a democratic senator that would empower the fiery anti-big bank, senator elizabeth warren. i mean she could have really crushed them. of course now the reality is we've got a president who doesn't seem at all focused on wells, and a senate that's equally uninterested in legislating against the bank while at the same time interest rates soar. so the stock goes from $44 to the low 50s almost immediately and it's been hanging there for a couple days, perhaps precariously, maybe waiting to see how damaged and toxic the franchise has become after the cross-selling scandal. but then this morning as part of a policy of transparency, wells fargo put out a monthly report about how it's doing. the answer? not so hot. listen to these numbers from the release. customer interacts with tellers were down 10% from a year ago. customer account openings have fallen 44% from a year ago. new credit applications plummeted 50% year-over-year. wow. these are just a few of the massively negative comments on that wells fargo october retail bank report card.
3:45 am
to the point where many potential customers just aren't doing the business they would have if the scandal hadn't occurred. yet how has the stock done after this news came out? it was on fire all day today. advancing for man a percent and a half. what does that tell us? i think it says that higher interest rates trump everything, and i don't use that verb lightly anymore. even a recent scandal that could have made wells the pariah of the industry in a clinton administration. here's the bottom line. despite these dismal results, wells fargo has gone from worst to first, an amazing turn that proves without a doubt that the bank rally is real, and it's terrific. stay with cramer. toddlers see things... a bit differently. thanks to pampers easy ups... while they see their first underwear... you see the best way to potty train. introducing new pampers easy ups. our first and only training underwear...
3:46 am
ou'll see fewer leaks. and they'll see their first underwear. new pampers easy ups. the easiest way to underwear. pampers. it's judgment day. the in-laws, the type-a cousins, siblings and back seat chefs have all assembled to look inside your oven. but you've cleaned off all the baked-on business from meals past with easy-off, so the only thing they see is "mmmmm" go ahead.
3:47 am
3:48 am
3:49 am
>> it is time! it is time for the lightning round! that's where i take your calls rapid fire. you tell me the stock. i tell you to buy, buy, buy or sell, sell, sell. we'll play this sound -- [ buzzer ] -- and then the lightning round is over. are you ready, skee-daddy? it's time for the lightning round on cramer's "mad money." let's go with ryan in pennsylvania, ryan. >> caller: booyah, jim. i'm calling from beautiful south philadelphia. go birds. >> go geno's, go birds. >> caller: first time caller. i want to say thank you for all the help and guidance that you provide for the followers of "mad money." >> thank you. >> caller: thanks, jim, for everything you do. >> thank you. >> caller: i wanted to get your take on weatherford, international. >> no, no. weatherford we don't need. remember, when we get schlumberger, halliburton when it got a great president, by the way, in the western hemisphere. i want to say that you should buy schlumberger.
3:50 am
>> caller: booyah, mr. cramer, from gun barrel city, texas. >> wow. that's cool as all get out. what's up? >> caller: not a lot. calling about stm, microelectronics. supposedly they're predicting this stock soars 6,000 to 8,000. >> it's a very inexpensive stock. it's had a big move of late. i was surprised to see that stock all the way up. but marvel had a big move too. i'm going to bless it because that group is red hot. look at micron. look at amd. holy cow. let's go to nathan in florida, nathan. >> caller: hey, jim. how are you? nathan froam skip amat and go with lam research, but applied materials has been on a rally for the last two months. do you think they have more room to grow? >> i do actually. i think people were mildly disappointed with amat. i think they're wrong. with the quarter tonight, i think amat is in real good shape. i think it's a real sweet spot. i do like novelis more than amat. every day i'm stunned by the action in stocks like goldman
3:51 am
let's go to chris in virginia, chris. >> caller: hey, jim, honeywell just spun off its chemicals division into an independent company. what are your thoughts on advansix? >> we have not done the work on advansix. we have not done the spinoff work, and we will. if dave cote spun it off, i got to be sure that i like it because why didn't he want it? well, the answer is he tried to clean the company up to be perfect. it could be a buy. i don't know. remember, i do like the stock of arconic. let's go to stephen in washington. stephen. with the opec situation talks coming up, i was reading the street and it said murphy oil is poised for a big rally. >> i like murphy oil. i'm not going to be against it. i do think the fossil fuels are going to have a rally under president trump. i think it's going to be a bit of a bust, the opec meeting, but i think there's good demand underneath, particularly from china. and that, ladies and gentlemen, is the conclusion of the lightning round! [ buzzer ] >> announcer: the lightning round is sponsored by td
3:52 am
... geico has a long history of great savings and great service. over seventy-five years. wait. seventy-five years? that is great. speaking of great, check out these hot riffs. you like smash mouth? uh, yeah i have an early day tomorrow so... wait. almost there. goodnight, bruce. gotta tune the "a." (humming) take a closer look at geico. great savings. and a whole lot more. ugh. heartburn. sorry ma'am. no burning here. try alka-seltzer heartburn relief gummies. they don't taste chalky and work fast. mmmm. incredible. can i try? she doesn't have heartburn. alka-seltzer heartburn relief gummies. enjoy the relief. what are you doing right now?
3:53 am
t see cake, i just see mess. it's like awful. it feels like am not actually cleaning it up. what's that make mommy do? (doorbell) what's that? swiffer wetjet. this is amazing. woah wow. now i feel more like making a mess is part of growing up. only new wetjet pads have absorb and lock to soak up tough messes and lock them away stop cleaning. start swiffering. who wants to play am i diversified? this is where you give me a
3:54 am
five holdings. i'll tell you if you need diversification or whatever. cheryl and cara in new jersey, you're up first. what have you got for me? >> caller: hi, mr. cramer. this is cheryl from new jersey, and i'm here with my 11-year-old daughter, cara. she's learning how to invest, and she would like to ask you a question. >> caller: hi, mr. cramer. >> hi. >> caller: i first want to thank you for signing my book for me for my birthday. >> so nice. >> caller: my stocks are merck, disney, apple, exxon, and procter & gamble. am i diversified? >> man, i think this kid's got horse sense. look at this. merck, one of my favorite drug companies, doing fantastically. procter & gamble, consumer products company. exxon mobil, largest oil company. disney, entertainment. apple, you got a lot of cash coming on the sidelines. yes, both best buy and target said their stuff is well done. i think that's fantastic. great play. thank you, cara.
3:55 am
how are you? >> i'm good. how about you, chief? >> caller: fantastic. hey, i got google, facebook, amazon, lockheed martin, and martin marietta. jim, am i diversified? >> all right. you got a bit of the fang. fang does trade together, so we're going to have to -- maybe have a little surgery here. what do we do? my charitable trust owns both facebook and google, but we've got a lot of stocks. i feel this is -- you're going to have to get rid of one of them. facebook, amazon, geez, you own too many of them. let's keep amazon because it's pulled back 15%. and let's keep facebook because it's down on that metric story that's not true. we're going to hold off google right now even though it's a charitable trust name. lockheed martin, defense. martin marietta is materials. i just want a health care in here. we'll use merck from the last one. just add it. don't have to subtract any of these. i want merck added, and then i'll feel better. now a tweet from @gheorge31.
3:56 am
my top five holdings are united technologies, apple, facebook, altria group and jpmorgan chase. am i diversified, hashtag? okay. we got tech. we got a great industrial. we got tobacco. we got a bank. hey, that's perfect. nothing wrong with that. we'll throw apple in, but i think apple is different from facebook. i'm calling this social media, and i'm cag tech. that is fine. i'm willing to bless it. >> hallelujah! >> thank you, players. we had old tech rally today, "charades?" "yeah, let me check my score too." "try credit karma. it's free."
3:57 am
olay total effects vitamin enriched to revive skin and fight 7 signs of aging your old school dance moves might show your age, your skin never will
3:58 am
3:59 am
we had old tech rally today, advanced micro, texas instruments looked pretty good, and i got to tell you, micron looks like it's breaking out. but tomorrow should be new tech in light of the fact that salesforce had such a good quarter. you're going to see cloud stocks moving up on that. you're going to see the workdays moving up, even oracle, a sworn competitor.
4:00 am
i promise to try to find it just for you right here on "mad money." i'm jim cramer, and i will see you tomorrow! . . . . first a member of donald trump's cabinet has been chosen, but he hasn't accepted the job yet. >> they were against each other during the campaign, trump plans a healing policeman striking a woman during an altercation. >> the winter weather that has us excited. the lengths they will go for milk and cookies. and the eye popping sales prices for marlin monroe's infamous happy birthday mr. president dress. "early today" starts right now.


info Stream Only

Uploaded by TV Archive on