Transcripts For CNBC Mad Money 20170322

That old paradigm of political gridlock coupled with slow growth and, most importantly, cynicism. Cynicism, which also combined to produce hohum parks like today. Dow spliping seven points. S p inched up 0. 19 . Nasdaq advanced 0. 48 even after days of declines concluding with yesterdays crescendo of selling. Worst day of 2017. Now, look, ive been adamant, and you know that if youve watched this show, that this rally hasnt just been about the power of donald j. Trump to effect change in washington. I think the optimism that the president s created in the Business World through his endless projobs, antiregulation drum beat and rhetoric has been far more important for stocks than anything related to actual legislation in congress. Yep, the positive implications of deregulation coupled with better than expected profits have been the real impetus for the run. All that said, i totally recognize that my view is distinctly in the minority. So lets go over the majority thats in control right now, the narrative of selling that produced yesterdays bleak session, the story of why stocks got crushed and havent yet really been able to bounce back yet. First theres an incredible tugofwar that goes on most sessions between how companies are actually doing and what the broader indicators say about how those Companies Might or should be doing. You know me. I follow the fortunes of individual companies. The vast majority of companies that have reported in the last few weeks said their businesses are strong and getting stronger. Weve got two on tonight that are going to tell you a similar story. Many of these executives come on mad money proclaiming a better environment, and that better environment has produced better order books, better profits, more hiring, and ultimately the thing that drives stocks higher raised forecasts. The positives are so pronounced that the stocks connected with them managed to bounce back nicely today even with the terrible terrorist incident outside of parliament in london. But these kinds of moves seem almost oneoff versus the broader tale of the tape lately. So lets explain whats really in charge and what makes these winners simple outliers, islands in the storm of the foibles of the new political dynamic. First on a day to day basis, this market is almost entirely a referendum on trumps successes or failures. Trump stock, trump stock. Where everything is a trump stock until its not. Sell, sell, sell. When it comes to judging the president s success, what matters more than anything else for these pros is the bond market. When Interest Rates go higher, that suggests that trump is going to get his way when it comes to expanding the economy through tax breaks. Higher rates equals more borrowing and more growth. When Interest Rates go lower, that means trumps not going to get his way, and his political clout is nil, and the economy is grinding to a halt. For example, when you see the obamacare replacement bill floundering in congress, that causes bond yields to fall because its something that could delay or derail the president s probusiness agenda. When fbi director james comey suggests that some of the president s highranking associates or former associates or whoever could be indicted, that also pushes bond yields lower because it pushes back any hope for tax relief or infrastructure spending, which would boost the economy. The impact of lower rates is swift on the stock market. The longtime leaders of this ral list, the financials, meaning the banks, which desperately need higher rates in order to be able to crush their own estimates. Well, those stocks go the wrong way because rates are going the wrong way. The strilgs also take it on the chin. Now, it doesnt matter if the stocks of the industrials have rallied after they reported good numbers. Those moves get repealed whenever trump seems weak as sellers arent going to let the corporate facts get in the way of the negative bond story. Plus lately its gotten worse. I dont know if youve noticed. Now the transports, which took up the mantle of the rally after the industrials and the banks stalled, that Important Group that measures commerce, now theyre starting to roll over. Why not . The thinking goes that if trump is failing, then there will be less commerce. If theres less commerce, then the stocks of the rails and more important the airlines go down in price. How can we be so sure . Okay. You sitting down . We know the airlines should go down because not only is the bond market telling us the economy is slowing, but Something Else is happening. Oil broke down earlier today, which confirmed the bond markets severe judgment even as it ultimately rebounded and closed just down 15 cents. That caused the lateday rally. But thats right. Think about this. Something thats actually great for the airlines profits, lower oil prices. Its their principle expense is less important as a cost control than as a barometer of overall Business Health and how if might impact the airlines. Oil goes down, business must be weak. So lets go over this whole absurd arc, not to help you make sense of it because it aint making no sense, but because its nevertheless whats driving this market. In short, a weakened president means lower Interest Rates and lower oil prices, which is therefore bad for stocks. Now, in the interest of history, i just want to note that lower Interest Rates and lower oil have been responsible for most of the greatest rallies ive ever seen in my 37 years. Not now, though. Now were all about trump and nothing else. It doesnt matter if fedex says business is excellent and getting better. The president is weak. It doesnt matter that tech company after tech company adobe, oracle, reported fabulous earnings. The president s hobbled. It doesnt matter that starbucks is predibting acceleration in samestore sales. The president is in trouble so everything is more subdued than it should be. Of course it helps whenever we hear anything that seems to strengthen trumps position, like the chairman of the House Intelligence Committee saying this very afternoon that some of trumps personal data may indeed have been collected by the fbi, which means maybe trumps not quite as offbase with his wiretap claims, which means maybe his power indicator jumped a bit. Geez, maybe Interest Rates go higher. So what do we do . I think you resort to what we always do. If you want to make money, you do the opposite of what a wacky market says to do. I suggest you buy the stocks of companies that are doing well, like a starbucks, betting that trumps daily vicissitudes are not that important to creating longterm wealth. Oh, let the traders try to trade it. Who cares . Thats something the investing mindset, the honest investing mind set started happening toward the end of the day. It was very gratifying. Its why ultimately im going to declare this session a victory for the bulls. So heres the bottom line. At least now you know the fever gripping the market even as it hasnt affected the actual fortunes of individual companies, which in the end matter a heck of a lot more than the day to day narrative about how the president may be doing. Stefan in florida, stefan. Caller hi, jim. Booyahs to ya. My question is about new York City Bank corp. I bought it in the low 15s. Its languishing down around the high 13s, has a great dividend. Do i sell it . No, no, no. I would hold on to that. I dont want you to do that. I think youre fine. The bank stocks are down right now because people feel that theres really going to be a cessation of business activity, which is ridiculous, and that Interest Rates are never going to go higher again, which is wrong. Joan in maryland, joan. Caller thank you so much for taking my call. I bought boeing for about 141, and its well up into 170ish. Im not a trader. Im an investor. Should i what should i should i sell some of it, and if so, how much . Joan, you describe yourself as an investor, and youre taking a longterm view. Well, boeing has a tenyear plan. Actually you could argue they have a 20year plan, but they have order book filled for years and years. Yeah, you can, what, sell it at 176, try and buy it back at 168. Were not going to play that game on mad money. I say you hold on to it. All right. Dont get off track. Its the fortunes of individual companies that determine longterm wealth creation. Sure, theres a different narrative in control right now, but that just gives you a buying opportunity. On mad money tonight, its the end of an era. Starbucks Howard Schultz had his final annual meeting as ceo today. Tonight im sitting down with howard and incoming ceo Kevin Johnson. Then are the retail reits on the clearance racket . Ill tell you if its time to consider the mall landlords skpmpt speaking of malls, its the Company Behind brands from calvin to tommy. Can pvh remain the star of the runway . Its flying after hours tonight, and ive got the exclusive with the ceo. Stick with cramer. Announcer dont miss a second of mad money. Follow jimcramer on twitter. Have a question . Tweet cramer, madtweets. Send jim an email to madmoney cnbc. Com or give us a call at 1800743cnbc. Miss something . Head to madmoney. Cnbc. Com. Did you know slow internet can actually hold your business back . Say goodbye to slow downloads, slow backups, slow everything. Comcast business offers blazing fast and reliable internet thats over 6 times faster than slow internet from the phone company. Say hello to internet speeds up to 250 mbps. And add phone and tv for only 34. 90 more a month. Call today. Comcast business. Built for business. Whats next for longtime cramer favor starbucks now that its founder and ceo Howard Schultz is stepping down next month . The stock has barely budge so far this year as investors worry about the companys slowing samestore sales . Can starbucks get a second win. The company held its 25th annual Shareholder Meeting earlier today and we had a chance to check in with Howard Schultz, the visionary outgoing ceo. Take a look. Howard and kevin, thank you for being with us on your 25th annual meeting. Howard, stunning 18,000 return for shareholders since you ipod 25 years ago. Tens of thousands of new jobs created around the world. What can you do for an encore . Well, i think this is just the early days. I mean what were going to present today is not only the history of the company in which weve created 80 billion of market cap in 25 years, but we think these are the early days. And despite the fact that the stock is not up yearoveryear, its probably been one of our best and strongest years in our history. When you think about the roastery in china opening in december. 2,600 stores in china. A store opening every single day. The new reserve Stores Coming online. And i think the second half of the year in terms of our comps and traffic will be much stronger than the first. I think what weve done every year is really demonstrate we play the long game. And our shareholders have been rewarded in the past. Theyll be rewarded again, and i think kevins ability to lead the company into the future, we could not be in better hands. Kevin, let me go to you because i think the analysts are concerned about this quarter. Theyre talking about throughput. Theyre talking about 2 comp numbers and theyre really talking about how you got this highquality problem of the best mobile Pay Initiative in the world that hasnt been truly sorted out yet. Will this be something that you can sort out by the second half so that we can see reacceleration of comps . Yeah. Jim, were already sorting out the fact that weve got increased volume coming into our stores as a result of mobile order and pay. Weve already taken some actions including in some of our super high volume stores of adding addition rolls to help handle the volume and increase the throughput. Weve taken some actions to alleviate congestion at the handoff, and i think were starting to see good results. Were optimistic were going to see that acceleration in the second half. In other words, the stores that have you reconfigured, you are seeing the kind of comp numbers that you used to get, but maybe much better throughput . Yeah. Were seeing a better customer experience, an increased throughput. Granted, its early days. The team has been driving here over the last two months, but were getting good response from store managers and we think were on the right path. Certainly more to do, but were making good progress, and were optimistic that were going to see those comps accelerate in the second half. All right. Howard. Moving up to executive chairman. Obviously still very much involved with the company, working in the higher level of the pyramid, maybe even getting people to pay for a much more expensive cup of coffee that they love. But this also gives you some time. My friend jim stewart of the New York Times recently speculated that it would be so easy for you to say, run forment and thats in part because you can tweet your way to the top of a president ial party. You care passionately about so many things beyond just the best cup of coffee. Is this a time where you could do parallel . You could do political and continue as executive chairman . Well, we had a Board Meeting yesterday and a wonderful board dinner last night welcoming three new board members, Satya Nadella from microsoft, and ross brewer from sams walmart, and what we talked about was most importantly the future of the company and our respective roles and responsibilities. I have a fulltime job in building these roasteries around the world, building the ultrapremium brand. But at the same time, we want to be true to the principles and our core values of the company. Hiring 10,000 veterans, hiring youth, Free College Tuition for our employees, hiring 10,000 refugees globally these are all things that we think are part of the humanity of the company and us being a compassionate brand and compassionate company. As far as my role and responsibility, i recognize more than any other time im here to serve our shareholders and at the same time work with likeminded ceos and elected officials to try and move the country forward and address the needs of millions of americans who either are not in work, not in school, and really facing challenges that require a more compassionate understanding of the people who dont have a voice. But my primary role and responsibility is still with starbucks. You talk about millions of people. Now, i have to tell you that other than amazon, i cant find a company that has bent on hiring more people in america. Is that lead by example, or is that something that President Trump should be calling you and saying, how the heck can you do it . Jim, weve got 330,000 partners who proudly wear the green apron around the world. And the announcements were making today, you know, we announced four years ago the yi initiative to hire 10,000 veterans or their spouses and weve exceeded that number. So were announcing today were increasing that commitment to hire 25,000 veterans or spouses by the year 2025. Opportunity youth. These are young people. Theres roughly 6 million young people in the United States between the ages of 18 and 24 years of age who are not in school and not at work. Weve committed to hire 10,000 of them a year ago. Weve exceeded that number. So were upping that commitment to hire 100,000 opportunity youth. So we are creating with the opening of 12,000 stores over the next five years, we are creating hundreds of thousands of jobs. Lets talk about the store opening and acceleration. Theres just a tremendous amount of emphasis about the 1,000 stores, whatever, that may have some problems with mobile pay. Where, howard, is the general narrative about whats happening in china, which i would regard for the next five years maybe more important than the United States . Well, i think, jim, you know, much has been made of this mobile order and pay issue. Lets face it. This is not a problem thats going to stay with starbucks very long. Were already on our way to fixing it, and it is a minor issue in the scope and scale of the landscape of starbucks with 26,000 stores around the world. With regard to china, we spent two hours yesterday with our board on china specifically. Where we are really going to double the size of the business, where we have the leading brand, the relationship with our people, the roastery opening, and if you look at the landscape of opportunities we have in china, the new stores that weve opened this year in the u. S. , which is probably the best proxy of the success and the enduring quality of starbucks brand is the best performance of new stores weve opened up in a generation. Then you take the level of innovation that kevin is leading with regard to technology. On balance, the stock is undervalued, and we will demonstrate both in the short and the long term that we are building a great, enduring company. And like the last 25 years in which we developed 80 billion of market cap, we are going to do that again over time. So i could not be more optimistic, more excited, and more bullish about the opportunities that we have at a time in america where there is great uncertainty politically, where theres a seismic change in consumer behavior. We think we have what it takes to be successful, the sense of community, the sense of place, the emotional connection. And one of the most trusted brands in america. Fortune magazine just named us the third most admired company in the world. You dont get that kind of recognition because you have a mobile order and pay problem. You get that kind of recognition because you have a body of work that stands the test of time, and we are just getting started. All right. Kevin, one last question here. The man to your left is probably the look, ive said it in many books. The foremost entrepreneur of my lifetime. How do you follow in the footsteps of the man who has probably created more jobs, more wealth than anyone else alive other than no, just anyone else alive . Well, certainly, jim, i think anyone stepping in this role would acknowledge they have venti shoes to fill. My good friend and partner howard is someone i have the ut utmost respect for. Id say first and foremost, weve known each other for a long time. Weve work the with each other intimately for the last two years. Weve coauthored this fiveyear strategic plan, and hes in the office right next door to me. So that gives me some comfort that, you know, not only do we have the opportunity, but weve got the leadership and a worldclass Leadership Team to take us into the future. Howard, just got to ask because theres a logjam again in washington. Theres gridlock. You are a person who provides health care. You are a person who puts food on the table worldwide. Are you surprised that once again were stuck, and is it just enough to be a Business Executive anymore when washington cant seem to do the job that private companies can do . Well, you know, jim, i said two years ago at this very feeting that the rules of engagement for a Public Company today were changing. I wasnt clairvoyant, but its even more so today. We must do more for our people that we serve, the communities, and we have a bigger responsibility. We cant wait for washington. We provided Health Insurance and equity in the form of Stock Options over 25 years ago, way before the Affordable Care act. The only company in america providing a free fouryear College Tuition for our people. All these things, i think, are part and parcel with building the kind of company that has a conscience, and our success as a company, the 80 billion of market value, all of that is steeped in the humanity of starbucks in balancing profit with a social impact agenda. And i think more and more companies are getting that, and i believe that over time, more and more consumers recognize they want to support companies who have likeminded values of their own. And this is not something thats just u. S. We have been embraced in 75 countries around the world, and our success in china is very emblematic of the fact that the equity of the brand is not only defined by the coffee and the store design, but the relationship we have with our people and the communities we serve. And china is going to be a great example in the future when, in fact, it becomes a bigger business than the u. S. Business over time. Gentlemen, i want to thank you so much. Thank you, starbucks chairman and outgoing ceo Howard Schultz and current president and coo and soon to be ceo Kevin Johnson. Thank you, gentlemen. Announcer coming up, as sears, macys and their brick and mortar mates face an uncertain future, cramer sits down with the ceo of pvh. Weve got Department Stores closing left and right. How are you able to pull it off . Announcer when mad money returns. Various shouting heigh ho its off to work we go woman on the gulf coast, new exxonmobil projects are expected to create over 45,000 jobs. And each job created by the Energy Industry supports two others in the community. Altogether, the industry supports over 9 million jobs nationwide. These are jobs that natural gas is helping make happen, all while reducing americas emissions. Energy lives here. Wont replace the full value of your totaled new car. The guy says you picked the wrong insurance plan. No, i picked the wrong insurance company. With Liberty Mutual new car replacement™, you wont have to worry about replacing your car because youll get the full value back including depreciation. And if you have more than one Liberty Mutual policy, you qualify for a multipolicy discount, saving you money on your car and home coverage. Call for a free quote today. Liberty stands with you™. Liberty mutual insurance. Whats Critical Thinking like . A basketball costs 14. Whats team spirit worth . cheers whats it worth to talk to your mom . Whats the value of a walk in the woods . The value of capital is to create, not just wealth, but things that matter. Morgan stanley highway to the danger zone after yesterdays brutal selloff, i want to spend some time thinking about the groups that really are at risk in this market. And im not talking about the profit taking in many of the trump names. Trump stock. Maybe some of them have gotten ahead of themselves. I get that. But profit taking in stocks that are up big, thats perfectly natural and, more important, i actually think its a sign of a sane and healthy market. What you really need to be worried about are the groups that have powerful secular themes going against them. The stocks that look like theyre having a kenny loggens moment, meaning theyre riding into the danger zone. And whats right at the epicenter of the danger zone, Companies Like kimco, Simon Property group, ggp, regency centers. These retail reits have not one but two serious problems. First of all, bricks and Mortar Retail itself is a real bad place right now. Just today, Sears Holdings said something very ominous in a regulatory filing. Let me read it tao. Our historical operating results indicate substantial doubt exists related to the companys ability to continue as a going concern. In other words, the company is worried it might go under, which is why the Stock Plunged 12 today. Sears has been the worst of retailers for a long time, but the damage is hardly limited to them. For months now ive been telling you about the stay at home economy where theres no reason to go out shopping because you can order just about anything right to your door from thousands of retailers, especially amazon, as you sit on the couch watching netflix or fooling around with facebook or playing video games. We know that the mall seems to be kind of dying like a trapped animal thats slowly starving to death. But less than a handle of chains being able to buck that trend. So fewer and fewer shoppers are going to the mall, that makes things precarious for the Real Estate Investment trusts that own malls or Shopping Center properties. We have way too many stores in this country, maybe six times as many as we need. And as more and more retailers shut down, something thats becoming a common refrain when these companies report, the reits are going to see their occupancy rates plummet and will have to lower the rent to entice new tern ants. The whole reit cohort fell out of favor last summer when it became clear that the Federal Reserve planned to start raising Interest Rates and that tightening circle has arrived wi. Remember, these Real Estate Investment trusts are all higher yielding bond market alternative or equivalent stocks, which means they become a lot less attractive to investors when the fed tightens and bond yields go higher. Why take the risk when you can get a nearly 2. 4 yield from the tenyear risk free. Granted, this group has already been hammered and ive tried to flag it before but i just felt like i had to do it again, especially with the sears news. Kimco, Simon Property group, ggp, ricanall peeked last july august. But if you were thinking of trying to pick among the rubble and search for value here, im asking you to think again. These are falling knives, people, and you do not want to catch them. Look, we all know that bricks and Mortar Retail is in trouble. Old line merchants have spent years building out their online businesses to compete with the likes of amazon. But the ones with good websites are now cannibalizing themselves. Witness the recent weakness at target, where the success of the Ecommerce Division means way fewer people coming into the store to comparison shop, go through that racetrack, find things they dont necessarily want when they came in. Its gotten to the point where investors see it as a red flag when a typical retailer says it wants to open new stores. Of course ecommerce has been crushing mall and Shopping Centers for ages. The thing is that weakness is finally starting to hit their landlords, the retail reits, which had been unscathed for years. To understand the extent of the damage, you need to know a little bit about how the industry works. For a mall or Shopping Center reit, its no big deal if they lose a few regular tenants here and there. What matters for these companies are so called anchor tenants, the large stores that particularly dominate a particular property. Think about when you go to the mall and a third of the floor space belongs to a gigantic macys or a large jcpenney. Thats an anchor tenant. Not only are these anchor tenants the largest sources of rent for any given property for the most part, they also drive traffic to the smaller stores. So its kind of like if you wanted to analogize, you go to the walmart and stay for the chipotle. The issue is pretty much everywhere you look, these anchor tenants are either suffering, scaling back their stores or even disappearing altogether. Department stores make some of the most logical anchors, and theyre all doing terribly from nordstrom at the high end with the stock down 27 over the past year to jcpenney at the low end, down 51 over the same period. Macys is a textbook example. Last summer they announces the impending closure of 100 stores and theyre hardly alone here. How does a kimco or Simon Property group or federal realty find someone to lease all the space now that they have anchor tenants scaling back hugely . Well, in many cases theyve diversified, added Dollar Stores in some cases, Grocery Stores in others. Certainly service retailers. But you know what . Heres the problem. Theres only so many of them to go around. Even worse, weve witnessed a ton of retail bankruptcies in the past year, sports authority, government smith, limited, wet seal, american apparel. More lost tenants for the mall and Shopping Center reits. Now weve got this Years Holding situation, which has been closing lots of sears and kmart locations saying theres substantial doubt about ability to stay in business. As of januar sure, some of these reits may be eager to say goodbye to a loser like sears which tends to have very low rents, but at a certain point, there are so many doors shutting at certain malls that they begin to look like ghost towns, and thats very uninviting. Now im hardly the first guy to recognize this group is troubled. What do you do . Look, rising Interest Rates are bad for the Real Estate Investment trusts but if the Underlying Company is riding a powerful secular theme, some of them can still be owned. Lime suggesting you look at the data center play, logistics plays, or experiential plays. But the retail reits, theyre the opposite. Theyve got a huge secular trend going against them, which means you need to stay the heck away. Heres the bottom line. With the fed tightening and retail getting slammed, the mall and Shopping Center Real Estate Investment trusts give you two ways to lose. Thats why im telling you to steer clear of kimco, simon, ggp, regioncy centers or sell them into a bounce. Some of these Companies Like federal realty are well run and doing their best to diversify away from pure retail, even including apartments. But all that does is make it so that theyre the best houses in a very tough neighborhood. Lets go to sam in illinois, please, sam. Caller booyah, professor cramer. Thank you. How can i help . Caller love to hear your take on kate spade. You know, i saw a very good retail note today which said the stock is now up so much in anticipation of a takeover that its time to go. I thought thats very wise given the fact that its still in the accessory business, and the accessory business is suffering. Lets go to mark in wisconsin, mark. Caller jim, i got a reit for you. It deals with medical facilities. The Ticker Symbol is doc. Yeah, i know it. You know what, im going to tell you it yields 4. Its not bad, but my problem is its involving health care. And i have backed away, slowly by surely, from anything reit thats in health care too because of all the craziness thats in washington. All right, people, its not news, but i know retail is in a rut. That is starting to really impact landlords, many of whom i defend ford a couple of years. Thats no longer the case. So steer clear of the shopping reits. Theyre just not a good group to be in anymore no matter how well run they are. Much more mad money ahead including my executive with the ceo of pvh fresh off of earnings. Is the Company Still in fashion . Then is it the end of the trump train . Ill tell you where to look in light of all the political push and pull. And all your calls rapid fire in tonights edition of the lightning round. So stick with cramer. The valiant taste times of death, but once uh, excuse me, waiter. I ordered the soup. Of course, maam. My apologies. Cmon, caesar. Lets go. Caesar on a caesar salad . Surprising. Excuse me, pardon me. Whats not surprising . How much money matt saved by switching to geico. Could i get my parking validated . Fifteen minutes could save you fifteen percent or more. Experience exciting offers on sales event is here. Our most thrilling models ever. Get up to 2,500 customer cash on select 2017 models for these terms. Experience amazing at your lexus dealer. Okay. Its a tough time to be in the apparel business, but its always important to remember that not all companies are created equal. Some are a heck of a lot more equal than others. Take pvh, the Company Behind calvin klein, Tommy Hilfiger, a major apparel player with an enormous international business. Stock doing next to nothing in 2017, but the Company Reported after the close today. Solid 4 cent earnings beat, higher than expected revenue. Much more than 300 basis point increase in its gross margin. Even better, pvh gave strong guidance for both the next quarter and the full year. Stock is up nicely in after hours. So lets check in with manny chirico, the chairman and ceo of pvh to learn more about the quarter and his companys prospects. Mr. Chirico, welcome back to mad money. I was shocked to see in the sea of just red ink and for apparel makers, higher gross margins, great forecasts. We got Department Stores closing left and right. How are you able to pull it off . We had just very strong business, particularly in europe and in asia, driven by our China Business but also our wholesale businesses here in the United States had a very strong Fourth Quarter driven by our calvin klein and Tommy Hilfiger businesses. In other words, your stuff is not being discounted like everybody else. Its aid very highly professional environment, particularly in north america, and were planning north america very conservatively as we go into 2017. But were just seeing very strong momentum internationally behind our brands. People have to recognize you took a very big risk here. You put a lot of money, buying big brand names for overseas when everyone was saying why the heck are you doing that . United states is the only place to be. Its paid off. Absolutely. You need to be a Global Player in this environment. You need strong brands across the board. You need that scalability, and you want to have that diversity from a geographic point of view. At the same time, just as its getting tougher in the u. S. , and you talk about that, Congress Seems to be bent on putting on a border tax as if somehow we will bring back manufacturing here and not hurt the retailers that buy your stuff. Let me put it a couple ways. I think competitively were in a terrific place to manage that. Weve got two strong brands that have price elasticity and i just touched on our geographic diversity. But from an industry point of view, retail point of view, it is a terrible idea. It is basically a 500 billion hitting tax on the consumer. This will all come through as selling price increases to the consumer going forward, and the worst thing about it is its being hidden in a charge on imports as it goes forward. The last thing we want here in the United States is bringing back apparel manufacturing to the United States. This is a lowskill, highlabor content business that basically at best we could pay minimum wage, and why do we want to sit here and compete in that product category with the likes of ethiopia, bangladesh, cambodia, kenya . We want to compete in hightech manufacturing, not lowtech, lowcost manufacturing. So the people that will be hurt by this are the mainstream working guys, maybe even people who voted for trump . Look, i cant imagine that President Trump and the white house would be supporting the border tax. I know its been batted back and forth, but if you think about everything that he stands for and taking care of his constituent base, it just doesnt make sense at all. This is really a big tax on importers and retailers that support the retailers. The retailers are the Largest Employee sector in the United States. You think about the Top Ten Companies from an employment point of view in the u. S. In the private sector, six are retailers, the likes of walmart, target, macys, jcpenney, kohls, home depot, costco, and i dont know why the value of a manufacturing job that pays 60,000 is more valuable than an assistant store manager making 75,000 at one of these key retailers. I think its really i couldnt be more passionate about how i think this is bad for the consumer, the american tax base. I think this is its just ill founded. I know not all of them can make it. Manny, i happened to go in advance of you coming here on sears website. Manny, they sell a ton of hilfiger and a ton of calvin klein. They put out a Statement Today saying theres substantial doubts about their ability to be a going concern. What does someone like you do in that situation . I guess a couple of things. On a dot com business, sometimes retailers that you dont sell to have availability of product. It gets diverted through the market, and i can tell you that is a tiny, tiny, tiny business, and its not us doing it directly. Its going through third party players. Sears for us which in its heyday was a major player today has been wound down and is being planned very, very conservatively. Its just not a material player for us as we go forward. Not going to get hurt if something bad happens . No. Well have to manage through a small hiccup, but weve got a plan for the balance of this year very conservatively. I just came back from europe. Manny, its booming and youre seeing both in Department Stores but also in your stand alones. Yeah, absolutely. Our comps in our standalone stories, calvin and Tommy Hilfiger for the Fourth Quarter and as weve got into the First Quarter are running high single digit positive comps in that market. And even more importantly, our order book for fall for both brands, the tommy brand is up 10 on a really large we know. We know what were looking at. And calvin klein is up over 25 as that brand just grows into it. So we are really seeing Phenomenal Growth throughout europe, and its across europe from the uk, germany, southern europe, spain and italy. Were really seeing fantastic growth in both brands. No wonder european stock market are beating our stock markets. Thats manny chirico, chairman and ceo of pv, best apparel and retail story out there. Mad money is back after the break. Announcer lightning round is sponsored by td ameritrade. It is time it is time for the lightning round on cramers mad money. Thats where i take your calls rapid fire. You tell me the name of the stock. I tell you to buy, buy, buy or sell, sell, sell. Well play this sound [ buzzer ] and then the lightning round is over. Are you ready, skeedaddy . Its time for the lightning round on cramers mad money. Lets start with gabe in michigan, gabe. Caller hey, jim. Appreciate the advice and insight, especially for us millennials out there. Oh, man, millennials, we love millennials on this show. How can i hem . Caller long Term Investor looking at an attractive Balance Sheet and price earnings ratio, flex. Absolutely. We even tried to buy that for our charitable trust. I still like it. Lets go to stephen in new york, stephen. Caller what do you think about time warner . You think theyll merge with at t . I do but kaching, kaching. Were not arbitrary on the show. Lets go to matt in kentucky, matt. Caller jim, good afternoon. Im talking about a small cap, adis. Its been up and up and up 16 over three months, and its been down 4. 5 the past 48 hours. Is this a pullback . I should be concerned about . I do not know the answer to that. Ive got to do work and i dont noech et answer, but we will indeed come back. How about omar in maryland, omar. Caller hi, mark. I just want out to shout out mr. Marks for getting me into business, and i want to ask about hershey stock. I like hershey very much. I absolutely think it is it should have been taken over. It would have been a steal. I think the stock goes higher. And that, ladies and gentlemen, is the conclusion of the lightning round [ buzzer ] announcer the lightning round is sponsored by td ameritrade. Well, i feel pretty smart. Well, were all about educating people on options strategies. Well, dont worry, i wont let this accomplishment go to my head. Im still the same old gary. Wait, you forgot your french dictionary. Oh, mucho gracias. Get help on options trading with thinkorswim, only at td ameritrade. Suddenly with the recent selloff here in the United States, the european markets, long a questionable place to invest, now seem downright enticing. Suddenly that shaky euro seems a lot more stable, especially against the dollar. Even the politics of europe are looking downright placid compared to us after the incredibly destabilizing russia related fbi revelations and the squabbling among republicans over health care. And maybe, just maybe, with the defeat of the uber nationalist party in the netherlands, europe is feeling like we could go back to the good old days when you didnt need to worry about who was running the government. No wonder the european stock markets are almost all outperforming our stock market. For all the talk about the trump bump and the trump rally, european markets have their own propulsion going on, and they are in a trump free zone. Thats because their collective economies are turning and their Earnings Growth could be stronger year offer year than we have in this country, especially in President Trumps tax cuts get pushed back to 2018 as many commentators are now forecasting. Okay. Maybe im bay ased after talking to Business Leaders in europe. Or perhaps im dazzled that ppg will pursue a 26 billion hostile takeover bid for rival european Chemical Company ax sew nobel. Its third try with one more bump in price, or that kraft heinz would be willing to shell out 143 billion for the european unilever. There are signs that europe may be a better place to invest than you think. And you have to believe politically even one week out from the release of the official british document signifying that brexit is for real, europes got some stability to it that we lack for the moment. I think that defeat of that Extremist Party in the recent dutch elections may mark the high watermark of radical rightwing populism, giving europe more of the kind of globalists seek. Im not going for the end of the trump trade. You know that. That will go on even if the obamacare replacement bill first fails in the house tomorrow. Only fbi director comey possibly recommending the indictment of a former Trump Campaign official could put a dent in the longer term thesis thats carried this market this far. But lets look at the bull case for some european companies. Take diageo, the maker of Johnny Walker and all of its iterations. Heres a company that sells liquor all over the world in strong currencies that are then translated back into weak pounds. How can that company not be more desirable to the executioners at kraft heinz and unilever at this point. Why do we insist kraft heinz has to stick with food . How about san tan dare . Yes, the spanish bank with the hub of london to be tarnished to some degree even as a heard nary a public peep about london could be impugned by brexit, why shouldnt we be thinking about spain doing better as a financial and Technology Hub . Sant an dare has done a lot to recapitalize itself in the last few years. I could make a case for the recapitalized Deutsche Bank too, betting that european financial folk will be out to punish the uk and do more business with their german brethren. Im warming up to that stock as it raises the much needed capital. And if you felt that the world was going to be a stronger place, how about british mineral giant rio tin tow . You think there will be oil and gas mergers . Maybe we have to think about bp as a place to go. All im saying is with a euro that seemingly found its footing, economies that are growing stronger, europe might be a better place to invest than the u. S. , at least for now. Until the logjam in washington gets broken or the swamp, if you want to go there, gets drained, or both. Stick with cramer. Were drowning in information. Where, in all of this, is the stuff that matters . The stakes are so high, your finances, your future. How do you solve this . You dont. You partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. Morgan stanley. Long time readers of action alerts know that i like starbucks, the stock. But you know what . Ive been very concerned about this slowdown in the samestore sales. After listening to both Howard Schultz and Kevin Johnson talk today, i am much less concerned. I think the stocks going to have a strong second half. I like to say theres always a bull market somewhere. I promise to try to find it just for you right here on mad money. Im jim cramer, and i will see you tomorrow welcome to the shark tank, where entrepreneurs seeking an investment will face these sharks. If they hear a great idea, theyll invest their own money or fight each other for a deal. This is shark t my names steve gadlin and i live in evanston, illinois. bird chirps i live a really normal life. Im a dad. Im a husband. I love my family. I work a 9to5 job building web sites. A lot of thats just sitting at a computer staring at code all day. So i think its important to fill your daily life