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Jim Cramer explains what the Fed's 75-basis point rate hike means for investors - YouTube
Channel: CNBC Television
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my mission is simple to make you money
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i'm here to level the playing field for
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all investors there's always a bull
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market somewhere and i promise to help
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you find it mad money starts now
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hey i'm kramer welcome to mayor money
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welcome to create america other people
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make friends i'm just trying to make you
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a little money
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my job not just to entertain but to
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educate and teach you so call me at
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1-800-7436 or tweet me at jim cramer
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why did the averages roar
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after the fed's triple rate height today
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now gaining 436 points he has to be
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surging 2.62 in the nasdaq skyrocketing
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4.06
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two words
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data
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centric
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when fed chief jay pal spoke that phrase
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it meant the fed isn't gonna kill us
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normally two back-to-back seventy-five
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side basis point rate x would be the
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kiss of death to the stock market
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but jay
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said it's now important to watch the
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data after these hikes if the data stays
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too hot of course he'll keep tightening
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but otherwise he wants to sit and watch
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because at this point we've gotten
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enough weak data to justify some
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patience
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and he's officially now ahead not behind
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the curve
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that doesn't meet again until september
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hey they got august off so the bulls
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took this as a moment to frog
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and it might be a little bit longer
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moment than most of you expect
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of course these bend day spikes do not
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tend to last though hey you know the
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last two wednesday rallies in response
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to fed rate hikes have yielded nasty
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thursday
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you know after the conversation turned
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quickly into okay how big will the next
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rate hike be
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but there there really is some software
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in the economy this time and there
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really is no august fed meeting so the
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odds favor buying not selling stocks
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into the next moment of weakness you
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know i don't like to buy on spikes like
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this one that we had today but the
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dialogue will now switch from how big
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will the next hike be to will there even
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be a next hike and if so it's certainly
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promised to be smaller than the last two
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look i've long been
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a j-pal fan you know that i'm on his
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side now what did i want i wasn't too
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critical i wanted to do a couple of
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hundred basis point hikes but i'll take
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275s and then wait
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that's pretty perfect hence the rally
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more important we didn't get what i was
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most worried about the market would have
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been crushed if powell said the economy
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remains red-hot nothing's really working
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so we may need an emergency rate hike
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next month to stamp out inflation
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immediately don't take that off the
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table could always happen but it doesn't
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sound like it will all right we're being
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a little theoretical and you know i
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don't like theories what i do like is
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that in today's session
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a lot of bears
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were caught
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trapped
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filleted
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and put on the wall kind of like one of
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those exhibits at the museum of natural
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history and that left the bulls free to
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do some tramping the bears were quite
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looking the wrong way because they were
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extrapolating negatives and look
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extrapolation it could be a fine way to
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make money
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but it can also lead you astray
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lately i've seen a lot of extrapolations
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done wrong and very little done right
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think of it like this not long ago a
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distinctly second-rate company snap
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reporter is simply a horrendous quarter
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calling out tremendous weakness in that
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spin so what happens anything remotely
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related to advertising the web gets
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absolutely crushed it's a journal house
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after snap you think it's impossible
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that anything good can come from an
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internet stock and that's when the short
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sellers come out of the woodwork betting
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against anything that's even
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remotely similar
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alphabet the parent company of google
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starts getting leaned on oh the shorts
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where they think they think it's easy
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money
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but then alphabet reports terrific
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quarter list because this is a much
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better company than snap with a much
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higher return on investment for its
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advertisers plus output's always first
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party meaning you're going right to it
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so they don't have anyone blocking their
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data tracking and google tells its
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clients exactly how people got to their
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site so you know who is going you get a
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return on investment with other kinds of
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advertising after apple's privacy
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changes last year you have no idea if
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it's working
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with google you can actually figure out
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what your ad spending is getting so
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you've got every incentive to spend more
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with snap
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it's rice krispies snap
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crackle
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pop
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next thing you know alphabet's up nearly
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eight percent today response to that
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excellent quarter now meta which
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reported this very evening
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did not have a good quarter and did not
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have a good guide
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and yes indeed the long knives are out
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for the stock but remember it's down
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more than 50 percent coming into the
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quarter and
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by the way it was also up 10 points uh
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just this session so it's going to give
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something back was it horrendous
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i'm putting it in the not horrendous
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camp did i want it my chariot my travel
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trust owns it i'm putting it once again
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in the
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uh yeah we own it we got a low basis on
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it here's what i expect here's what i
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say it's not we're selling
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i mean oh it's going to give you a
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little good give back after that rally
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of 10. i think it should be expected or
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how about the extrapolation we've seen
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with the stock of spotify ooh that's
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been a nasty one hasn't it
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this podcast of music streaming coming
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has been endlessly leaned on by the
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shorts
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[Music]
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it didn't matter that we all loved the
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company didn't we somehow it got tagged
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as being a stay-at-home play and that
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that my friends is the kiss of death in
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this market after all spotify is a
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subscription service like deathless with
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growth it seems to have peaked also like
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netflix right aren't they the same
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wrong
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all aboard spotify just crushed it with
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amazing monthly user growth that shocked
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wall street extrapolating from netflix
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just crush you
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absolutely
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it shredded you frankly spotify jumped
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more than 12 today
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all right how about chipotle oh man i
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mean like we ordered on fridays by the
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way i don't know if we can get it down
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here we always we were up an angle with
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cliffs i don't know if they deliver do
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they deliver chipotle
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no we don't know if they deliver it all
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right but anyway that that that's
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probably a little bit beside the point
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um chimeli is probably a dangerous stock
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right immediate higher priced food hard
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to keep help can't raise price just like
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all the other fast food companies this
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short slip this one was just like
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shooting fish in her bow which is
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actually done by the way it is not
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nearly as much fun as trying to land one
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in a pond but today they got shot
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because chipotle delivered a blow out
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quarter last night allowing the stock to
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jump nearly 15 percent today hey why not
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the price increase has been met with no
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resistance retention of employees look
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if you're not imagine place they aren't
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going to leave they stay and stay and
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stay um and you know what can i also add
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that the um food is very good
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sure chipotle's got
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they've got some things that are wrong
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they have a more affluent clientele so
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you can't necessarily say that it was
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because everybody's still going it's
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really the wealthier but so what
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isn't that something the sellers should
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have thought of before they started
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short in the stock i mean
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chipotle's always had a higher price and
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don't even get me started on the
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semiconductor stocks nvidia amd marvel
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tech of which one chapel trust owns all
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three now each of them has had an
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achilles heel that's really been hurting
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lately nvidia makes cards for
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cryptocurrency mining when everyone's
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giving up on crypto it's kind of like
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looks like a sophisticated pump and dump
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scheme doesn't it it also got exposure
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to gaming oh my goodness gaming well
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you're kissing hey amd has the same
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problems it's also got personal computer
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exposure a business that people are
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really worried about marvel texas 5g ooh
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scary oh i have a scary button
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no one wants that anymore but then
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google and microsoft start talking about
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how much computing power their cloud
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businesses need and boom it's up up and
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away now it doesn't hurt that the senate
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finally passed the chips act today a
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highly necessary piece of legislation
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that also happens to be very beneficial
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to the semiconductor industry and you
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know a bunch of hacks i'm going to go
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tell my staff to get us some chocolate
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chips i prefer chips ahoy just so you
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know in case you want to send them to me
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finally what could be worse than the
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telco after a t and verizon both
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reported oh my god
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horrendous numbers
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well at least they've got dividends
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right i just imagine what will happen do
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the dividend free t-mobile when it
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reports who wants that well once again
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the shorts got it wrong because t-mobile
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absolutely blew away the numbers how
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simple they're taking share from att and
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verizon sure it's a telco but as none of
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the baggage the other guys att
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complained that his customers are paying
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their bills late costing them hundreds
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of millions of dollars
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verizon has to spend 10.75 billion on
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dividends
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but t-mobile doesn't have those
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obligations it can plow its cash back
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into providing service plus unlike the
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other two guys t-mobile doesn't have to
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raise prices just imagine how many
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customers they'll poach next quarter oh
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by the way i spoke to mike siebert it
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was over here you see this is look at
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all these crazy people they do they do
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what do they do it's like a food stamp i
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can't make i was on food stamps
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that's my staff i just thought i had to
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do that it's kind of just got a kick out
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of it but anyway where were we oh yeah
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absolutely now we know the fed almost
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certainly isn't done with its hiking
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right we know that inflation's still too
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hot as i said earlier these rallies tend
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not to last the market usually reverts
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to case-by-case stock picking though and
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that's terrific
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that's what we do on their money we now
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know that pal doesn't want to cause a
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recession and doesn't think he needs to
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cause a recession so there's an
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advantage to the bulls here especially
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because he's caught up to the curve and
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maybe passed it
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but listen when a company misses and
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then guides down
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don't expect it to rally
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because that's not how you hook the
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balls bottom line
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the fed looks to be out of the way until
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the next mini september maybe they're
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ahead of the game even but the data's
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starting to go their way so let's go
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case by kiss and i bet there was some
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softer background the best earnings will
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be rewarded with higher stock prices
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while the declines in everything else
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at last could be more muted i want to
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take calls let's go to john in
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washington john
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hey jim how you doing
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uh i am doing well john how about you
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okay i'm down about ten percent in
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diamondback energy now with the uh
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earnings coming up soon i need to know
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should i buy some or sell some or or
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just wait okay what do you think well
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remember fang's got
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dimebag energy uh has got a very very
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good yield it's an excellent company
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travis stice is a terrific ceo my
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inclination is to buy it but it was up
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five points today and i tend not to want
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people to buy something up five but i
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would not sell bang the real you know
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this is the replacement fang because of
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that yield and because of that
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management i think you're in very very
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good shape
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i think that's all the questions we can
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take i love that i'm saying hi to my
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staff again because they've done an
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incredibly good job and i'm in an
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incredibly good mood but that's because
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i'm seeing jackson brown tonight
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it looks like the fed is out of the way
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until the next meeting i bet with a
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softer background the best earnings will
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be rewarded with higher stock prices on
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man today from the health of the
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consumer to the state of the stock
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market bank of america has its finger on
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the pulse of a host of topics and i'm
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going straight to the source for answers
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with the company's ceo then ford holy
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cow
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required to close i'm gonna take a
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closer look at the results which looked
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darn good with the ceo and shopify
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announced plans yesterday to lay off 10
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of his employees we got to figure out
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what the heck is going on there for
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e-commerce and the company itself i'm
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going to discuss with the company's top
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rank so stay
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with
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creamer
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don't miss a second of mad money follow
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at jim kramer on twitter have a question
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tweet cramer hashtag mad tweets send jim
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an email to madmoney at cnbc.com
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or give us a call at 1-800-743-cnbc
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miss something head to madmoney.cnbc.com
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