Transcripts For CNBC Mad 20240706

Times. The tao plunging 367 points. The s p 1. 6 . It was much more than 1pointtoday. There is too much to process. So what do people do . They sell. We have four potential negatives that are worth selling for. Actually rational. First there is tomorrows fat meeting. Then there is a Quarterly Report from apple. And finally there is the debt ceiling debacle. Those are four legitimate reasons to be concerned. If it were just one hurdle we will be fine. With four of them why do we take them one by one and impact them so that we can with them in a rational matter. Lets start with what is staring us in the face, tomorrows fed meeting. We simply do not know if the fed will pause aggressive tightening after that. I hope he will call in select reporters this time. This time the fine line of surprise versus forewarned is being learned. The many banking crisis may be contributed to multiple rate hikes. We just do not know and neither do they. I have been saying the tank failures might be equal to 100 basis points. If they did that, now it makes sense after Silicon Valley went under in march. And then First Republic was temporarily saved. In the end, even the extra deposits could not save them. The fdic had to facilitate atgu im wondering if j. P. Morgan is the only big bank that can save us . Are we really at a place where the fed can afford to tighten at all. Every time they raise the short rates, longterm rates go down. That is what happens when people think we are headed for a recession. That makes things tough for the fed. When rates go down low rates get cheaper and rates get stronger. The fans want to crush housing inflation. It is like they have no way to win. If they say they want to wait and see what happens, you could legitimately say we know what will happen. Things will get worse in banking and housing. If you want to stay tuned, i have a full takedown of the different options and the different odds. The second hurdle is apple. We really have no idea what apple says or does. Apple stock has moved up dramatically a son, who knows what. That means quarter has to be pretty darn perfect for the stocks to keep climbing. I do not see how apple could really have the same thing happen, but without a new iphone , stable chinese market, we dont know whats going to happen. Sure, apple could pull it off, but given how much the stock is run every line needs to be better than expected. Lets say we get past the fed and apple what we have them . It is the employment numbers on friday. It is actually numbers, you have implement ray, wage growth and the wage participated ray. I worry about the Regional Banks that i talked about earlier. At this moment we do not know what we want. If the bank tightens the numbers it looks like a hard landing. If the fed say they pause the rate hikes and the job numbers are hot, and the fed looks like it goofed. Either way wall street will not want to see a labor report that is too weak or too strong. That is a tough needle to thread. Can j powell finessed this issue . I bet he will, that it wont be easy. Finally the debt ceiling fiasco. Yesterday we found out we might have less than a month to do a deal before the government runs out of money. That was shocking. The treasury secretary painted a picture of uncle sam defaulting on obligations by early june. It made me feel like 2011 all over again. Back then we knew the democrats and republicans would eventually have to compromise. The market will systematically decline day after day. With the brunt of the fiasco coming on the standard poors, the actual organizatio , who downgraded our government debt. This time around i would argue we have a more divisive situation. It is a real game of chicken. Plenty of republicans in congress, i believe a default might help them win the white house. What is if you miss bills by the government . Is better than storm and the capital building. It is understandable why people want to get out ahead of the carnage. All of these issues would be much easier to put to bed if stocks were lower. That is what is happening. Stocks are going lower to adjust to the hurdles. There will have to be changes made. The fdic cant just the fall j. P. Morgan. They have to come up with a plan to spot the Regional Bank some points so they can bid and win the next bank that goes under. Or they need to levy a big enough field that lets them raise the deposit insurance to at least 500,000. The fed has to raise rates tomorrow, so we are going to wait and see how much damage has already been done. Apple will report what it reports, if it is weaker than it expected the stock will go down. But then it will come back again, i believe. There too many things going right for this Great Company including ai. We want wages to stay steady or even come down and little bit. I think that it will happen eventually. I do not know if it will be friday. The debt ceiling crisis will be resolved, but maybe not until the National Parks are closed. Maybe no security checks will be missed. There might be a hangover, it could be a little light 2011. You know what, you had to purchase it when i got to the bottom. Boy did we have a good run after. Think about that as her if you sell. I know these might not be satisfactory outcomes, but we have been selling what we can pretty much every day. We are not selling to flee from the market as we told members of the investing club. We are selling to raise cash so we can afford to be opportunistic and do this when the stock market goes down and not this and this. Bottom line, it is not a bear market. It is just an interlude. You have to recognize these four hurdles are a real garment that must be traversed. Those who beat it will get to the promised land. Not yet though. Patience is needed and a dose of fortitude while we are at it. Sunny in illinois. Hey, jim. Whats going on . This stock market is scarier than halloween. Whats going on . It does have an edge to it. How can i help . All right, i am looking at a Company Called cisco. They posted a pretty Strong Quarter last time around. What is your take and do you think they will post strong numbers . Do i have your blessing to purchase the stock . I think that the stock is kind of stuck. I want a stock that is going to go up. I am going to say you have to get a stock that i think and have a real run when it reports a good quarter and not a run and a fall right down. Lets go to eric in michigan. Hello, jim. Big fan of the show. Thanks. Whats going on . Im calling on general motors. Ever since earnings the stocks happen down over one hour. The bottom line quarters earnings of 209 per share, the adjusted even forecast was revised upward. The adjusted earningspershare is expected from a range of 635 735 per share, up from the prior forecast. I can just stop you and tell you that i am with you. I thought it was an excellent quarter. You know what, people are worried about internal Combustion Engine sales going down and competitions in ev. Whats going on his people feel the Profit Margins are going to be crushed. I think gm is a very interesting level. We will have much more about the cdc investing club this evening when jeff puts out a great piece. I saw a lot to like. It is looking a lot like what we saw with gm. It is annoying, but there is more to it. These four hurdles are a real gauntlet that must be traversed. Those who can traverse them will get to the promised land. The Parent Company of burger king, could they be crowned the winner in the fast food space . I will check in with the chairman. Just ahead of tomorrows meeting i am sharing the odds of what can happen. And then what did wall street seem to like or is it a dead cat and mouse . Will have to dig into the details. Stay with cramer. Lomita feed is 101 years old. When covid hit, we had some challenges. 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And it needs to smooth, like super, super, super, super smooth. Hey, should you be drinking that . Its decaf. Because were busy women. We dont have time for lag or buffering. Who doesnt want internet that helps a. I. Do your homework even faster. Come again. Sorry, what was that . Introducing the next generation 10g network only from xfinity. The future starts now. Bridgett is here. She has no clue that im here. She has no clue whos in the helmet. Are you ready . Im ready alright. Xfinity rewards creates experiences big and small, and onceinalifetime. Nearly 6 months ago we learned patrick doyle, a former longtime ceo of Dominos Pizza was being brought in as the executive chairman of Restaurant Brands international. I thought that it was a match made in heaven. He oversaw a period of incredible growth. A perfect domination for many years a profitable growth. What a homerun patrick gave us. This is going well also. This morning they were reported and that is why the stock jump over 2 on a very bad day. It is already up 20 since they made him chairman in november. Lets check in with the executive chairman of Restaurant Brands. Welcome back to matt money. I have to tell you, i have learned a lot even since youve come in. I did not know that i am buying tim hortons when i am buying Restaurant Brands international and not just burger king, and maybe more tim hortons that i realize. Tell us the real makeup of what this company is doing and where the religions are. That is exactly right. Tim hortons is the biggest business, about 40 of our earnings come out of tims. It is about double what we make on working in the us. In fact, our International Business for burger king is a little bigger than the bk us business as well. Tims is really the lead. They had an extraordinary quarter. Strong transaction growth. Most importantly and this is true across all of the brands and businesses, just laying great foundations for the future. Doing things the right way, proving improving quality. Very proud of the team. The team has done a particularly great job. One of the things that i found most amazing is when you came into dominoes it did not have anywhere near the digital that you wanted. It wouldve been so much better if it were more ties. I was shocked to read tim hortons is probably the most digital Restaurant Company on earth. It absolutely is. It is the number one food and beverage app in canada. I think it is the number two e commerce app after amazon and it is a very strong digital presence in canada. The number of users and the frequency, it is an amazing business. Still it is only about a third of all of the orders that are digital. Lots more to come. A terrific base. If it is digital you are thinking you would use the app to put an order in and come by and pick it up and be out really fast . It is that and often it is just using the kind of click and pay. So they are going through the drivethrough, they placed the order and then they pay with the app so we know who they are. We can market back to them. We know the frequency of purchase. Ultimately that data becomes very powerful for us to continue the relationship with the customer. One of the things as we circle to burger king and Burger King International is you have developed a level of account ability that i think the chain has not seen before. The chain has always been well run, including talking about how some of these frenchys are doing. Tell us about your level of accountability and what it means for sales . We announced the last quarter that our franchisee level of profits, so we had brought everybody together around that and said look, as an organization ultimately our product is the economic model that we provide for these franchisees. Those numbers were down when we announced. We made Good Progress this quarter, but we went out and said we are accountable for driving profits, driving the averages. Franchisees need to be in the restaurant. They need to be giving great service, making great food. Our part of this is we have to give them a great economic model to work with. It is the single most important metric that we have everybody focus on, driving franchisee profitability at the restaurant level. Just to push back, you mentioned at the end of your quarter the macroeconomic environment is terrible for these franchisees. Energy costs, commodity price increases, it is not a good time for them. It has been a bumpy 18 months with everything that you just mentioned. The pressures are actually getting easier. From a demand perspective employment is what drives consumption of this category. People are employed, they want the convenience of repaired food. Employment still looks pretty good. Clearly the food inflation that we were experiencing 612 months has started to ease. There is still labor pressure, but at least we are finding people to bring into the restaurant. It has gotten a little easier, but we still have a lot of work to do. We are going to wrap, but the next time you come back we have to talk about my old favorite, popeyes. I have always felt it could be a big driver. I know it is only 10 of your sales. I want to thank patrick doyle. Always great to have you on the show. Thanks, appreciate it. Matt money back after the break. Coming up, cramer paints what wall street might look like after the power posse has its say. Ah, these bills are crazy. She has no idea shes sitting on a goldmine. 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Well at at t well help you find the right wireless plan for you. So, you can stay connected to all your drivers and stores on americas most reliable 5g network. That sounds just pawfect. Terrieriffic i labradore you round of apaws at t 5g is fast, reliable and secure for your business. Like we told you at the top, this market is facing four major hurdles and the first is tomorrow and the Federal Reserve announces its latest Interest Rate decision. We will hear from the fed chief and his 2 30 press conference. The census among experts is a 25 basis rate hike. Like i mentioned earlier, there is more uncertainty about what they will say and signal for the future. Given the collapse of First Republic i believe it would make sense for quarter point hike and safe deposit as they take some time to assessed the current situation. It is a little dicey right now. I do not know, its not a sure thing. On the one hand yesterday morning the Goldman Sachs economist made the same argument that ive been making statements Silicon Valley bank when under. This represents a de facto tightening, forcing tons of banks to pull back on lending. There is no fdi insurance for a lot of these people. The number that is cut off his 250,000. On the other hand we have the opposite argument from the wall street journal chief economic correspondent. Hes been so attuned to the open Market Committee sinking. He predicted the fed will be delivering about whether one more quarter point rate hike will be enough . While he did not figured out right, he implied that he might want to keep his options open rather than a commitment to doing nothing, which i think may be difficult. I am concerned. I do think we have some sort of waitandsee. I certainly hope that is what happens. If we get a credit crunch that is really bad news where we already have areas of real concern like commercial real estate. Those areas will go from bad to worse with no concern for the Collateral Damage caused, particularly with the small and mediumsized banks. Its what im worried about. What matters is how this plays out in the stock market. If we do not get a signal that the fans will pause remember the average has been so strong. Thats exactly what you are supposed to do. However, its not what im most worried about heading into tomorrow. What truly has me concerned is you have a large cohort of people, investors who truly believe the vet will start cutting Interest Rates by the end of the year. According to the futures market there is a 73 chance where going to get a rake cut by september. A 93 that we have one by november and a staggering 99 chance will get one by december. I think these odds are ridiculously wrong, that is how able are betting. Tons of investors are convinced the fans will be cutting rates. I do not think that jay powell is willing to go there. He and his compadres believe retractable inflation is the biggest threat even though it has been cooling it still too high and i get that. This might be hard to understand if you didnt live to the 70s as i did. Nobody wants to be remembered as the next arthur burns. He was the fed chairman from 19781979. He is widely regarded as the worst central banker in modern history. He was dealing with serious inflation. Every time the economy started cooling he would blink and it cooling he would blink and it will come right back. At Morgan Stanley, old school hard work meets bold, new thinking, to help you see untapped possibilities and relentlessly work with you to make them real. The only thing i regret about my life was hiring local talent. If i knew about upwork. I would have hired actually talented people from all over the world. Instead of talentless people from all over my house. Double check that. Fromeh, pretty good rld. whistles yeek. Not cryin, are ya . 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And if you look at the oldest business, the biggest things are the new ergonomic mice and is the same for keyboards. Explain why. It is because it is affordable. You dont have to drop hundreds of dollars and think about how much you use your personal workstation at home. I have been thinking about this as youve been writing this in your releases with sales down and income down and earnings per share down. These go away as you annualize, but what is it like for you as a total winter to show it down like that . I hate that and everyone in my company hates that but you need to keep your head on straight and still say that we are up 40 or 50 versus pre pandemic. And we have to accept that. And gaming is still strong. And we are reporting big numbers. Big numbers. I think gaming will always be strong. At what point do we say that everybody who is going to game has gamed . Gaming is growing in terms of the market share of entertainment and the biggest games are bigger than movies. There is always a young cohort of 12yearolds and 13year olds coming in. You have this from the bottom and more people doing more gaming and people gaming into their 30s and 40s. This is a growing market for decades. Im glad you say that. I would do the opposite, i think these are exciting and i know there are more gamers than people who watch netflix. All right, bracken is a sea of logic. Ive got to tell you it is a tough category. Watching tonight you would say bottom or not bottom and its very, very hard. I understand on the stock. Coming up, cramer takes your calls and the sky is the limit. It is a lightning round, next. Next on last call. Next on last call. From paying your people from anywhere to supporting your talent everywhere, we use data driven insights to design hr solutions and services to help businesses of all size work smarter today. So, they can have more success tomorrow. One thing leads to another with gold bond. You can age on your own terms. 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E trade from Morgan Stanley cecily youre looking pleased with yourself. seth not to brag, but i just switched to verizon. cecily so you got an awesome network. seth and when i switched, i got to choose the phone i wanted. For free. Not bragging. cecily youre bragging. neighbor oh, hes bragging. seth who, me . Never. Oh, excuse me. Hello, your royal highness, sir. cecily okay, thats a brag. seth hey, mom. I gotta call you back. vo switch and choose the phone you want, like the incredible iphone 14, on us. cecily on the network worth bragging about. Verizon and we have the light around with david. And stone cold. Is a Brazilian Company with Enterprise Software and i can do without it at these highs. Lets go to catherine in taxes. Catherine. Hi jim, i got to meet you on the floor of the New York Stock Exchange 10 years ago with my family. Yes, i would say it inspired me to complete my bachelors degree in finance. Find tested. Anyway, my question is about the farmers market. I know they had a great quarter one Earnings Call yesterday. Should i buy tomorrow morning. I think you let it run and you are right the quarter was excellent. A lot of people were surprised. Im glad we got to meet each other and i wish you the best of luck and thank you for your success and sharing it with us. Lets go to darrell in tennessee. This is darrell flowers from nashville, tennessee. I knew you with a head full of hair and you are a guest. That is an actual true story but it was black and white back then, whats going on. Closing today 200 above average. After fundamental research, what about United Rentals . I didnt think the quarter was that great, frankly. They missed the number and there are other industrials that i think are better. I was surprised about the weakness. Now is go to shawna new york. How are you doing . Im good. I had question since they did the whole merger and i want to know what you think about their future . I think he is a great ceo but i will reiterate that im not recommending any of the companies that are losing money and they are losing loads of money and i cant go there, i am sorry. Lets go to jamie in california. Hello from california, jim. Whats happening . I would like your Expert Opinion on mrvl. I expect not one but two good quarters. People do not like it even though the coffee is excellent. Lets go to chris. Hey jim, my stock is so five. I have been a customer since 2020. Anything on the short term and longterm . In the end it turns out that sofi is not different than Regional Banks even though it is a national on light bank. It is trading in that cohort and it is nauseating. I cannot figure out where sofi stops. It is a cohort. Lets go to tony in washington. Tony. Mr. Kramer, thank you for having me on. Excellent. I have something for you on what i believe is strong in the hyperlink space. Many are soft but this one has good operating margins this year. For the ira and separate bsg goals. Despite all of these positives and trading down, what you think about . I like it and that Company Makes money. Bloom energy does not make money and herefore i do not desire to recommend it. And that is the lightning round ladies and gentlemen. Mac the lightning round is sponsored. Trying to analyze market trends. Thats what vector vest is for. Our market timing indicators let you know when to buy and sell so you can ride the rallies and avoid downturns. Vector vest■s powerful tools give you the foresight you need to buy low and sell high. And while everyone else is looking at the hot stock of the day, vector vest digs deep to find the real moneymakers, the ones you can win big with. Timing is everything, so make the smart investing choice today and head to vectorvest. Com for your risk free trial. At the top of the show, i told you about four hurdles including the debt ceiling crisis. On top of that, there is something i have to go over. The response to the banking crisis going on right now. The Treasury Department and fdic did a terrible miscalculation when they didnt figure out what would happen with First Republic. It did not fill the field in favor of j. P. Morgan. Maybe everybody has to put up some amount and then tell why you should get republic. Maybe a local car dealer or use a point spread like the gamblers. You could spot a touchdown and just give it to the favorite like they did. The way they handled First Republic has set a precedent and now likely every bank they get snapped up will be purchased by j. P. Morgan via fdic and i dont think it is right. I like j. P. Morgan but i like healthy competition which we cannot have if there is too much consolidation. That is why they must raise the insurance cap which will support rich people with their deposits so it is somewhere safer. They had to do it because they had no plan for First Republic opus demise which was obvious. We dont want another panik of 1907 when j. P. Morgan chase saves us is the lender of last resort. Shame on the fdic for not having a plan when the outcome was pretty much inevitable. How could they be so of twos . It was shredded by previous events in only a matter of time before their pants are down. Now they need to raise the deposit insurance cap. And recession may be upon us. Its one indicator but somehow the be all and end all. I dont think there could be such a recession with so many good use companies. Im not going to argue with the crowd. The market goes down and all it does is help the fed. Nevertheless, it is a trigger and it is being a trigger. In the attack of ai. Ibm is saying it may be laying off people or at least not hiring people by using ai to replace them. And this is an Educational Assistance company that is a free service that does elementary things. Until they come up with something simpler, better and cleaner. At the very least they are in trouble if teachers use Ai Detection Software for essays , and that will happen. These issues with the banks and the oil and Artificial Intelligence need to be dealt with. That may just mean that stocks need to be lowered to adjust which happened today. These problems might be less severe than expected. You would wish, ultimately you wouldve bought and not soldld the stocks of cramer. See you tomorrow last call starts now good afternoon from out west, everybody. Im Brian Sullivan we are joining you live again today or tonight for the milken global conference in los angeles. And there is no better place to be on such a dramatic news day because despite what some are saying or have been saying, the Regional Banking crisis slash problem slash issue apparently is not over, at least not yet. And there is no better lineup than the one we have got for you over the next 59 1 2 minutes alan schwartz. He has probably seen this kind of