After a fabulous day where the dow gained 240 points, s p advanced. 82 and nasdaq climbed. 90 i got to go there. I got to explain these universes. There is a universe with a booming economy then there is a universe with a faltering economy. One of them is a fantasy the other may be reality but occasionally they bleed into each other we can go everyone freaking out about a possible recession the market was down gigantically since then, though, we got a spade of incredibly positive earnings reports from a gigantic retailer like walmart, home depot, and now target and lowes so which universe is real . The robust one that we seen this week or the teetering one we visited, the one that had me on the today show urging people not to panic panic was the order of the day remember, panic is not a strategy lets dissect these universes, please, because they are colliding here and in the end, we know there can only be one like the highland. The recession scenario that drove stocks down hard last week was about the bond market. Longterm rates had dropped below shortterm rates indicating a lack of confidence and the dreaded yield curve. This odd inversion precedes a recession, the sign of the Federal Reserve missed the mark. The feds caused many a recession. Sometimes they do it deliberately, which was the proximate cause of the great recession. If you buy this logic, were not really headed for a recession. There is no avoiding it. The reason, the Global Economy is slowing thanks in part to our trade war with china the president of the United States decided its worth taking a shortterm hit and means we can stop china from devastating american manufacturing, stealing intellect well property and spying it seems so reasonable, doesnt it the rest of the world is having a tough time, the fed has been pretty clueless, tariffs are bad for commerce this line of thinking you can wrap a bow around the im pempeg recession so you better stock up on spam and velveeta to stock up thats run through but now lets consider what happened today where the averages rebounded back to where they were before the panic even as we hit inversion this afternoon. When you look at the causes, its an alternate universe one smacks more fantasy. This morning started with earnings from lowes and target both were Strong Enough to confirm what we heard from home depot and walmart. The consumer is in good shape and getting smarter. The tariffs so far are not an issue. 10 increase next quarter is viewed as not an issue who can squeeze suppliers because they are powerful how about price inflation, more like deflation traffic was up thats a sign the consumer is flush, and as the quarter came to a close, guess what the numbers accelerated. Lowes made it clear contractors were spending more heavily because low Interest Rates will spur home buying or home equity lended renovations thank you germans. We have a faphenomenal labor market Mortgage Rates come down and talked about labor saving technologies that keep prices down ive been saying this for years. The tech is deflation nary. Thats a reason jay powell can cut. As we have positive earnings reports, we heard a quick interview becky from the squawk and brian is the ceo of bank of america. Their own ceo and said the long term he told us that our longterm Interest Rates have plunged because of demand for u. S. Bonds from overseas not because of economic weakness here at home, thats what ive been telling you if youre european and getting negative Interest Rates for owning 30year german bonds, paying the German Government to take your money, why wouldnt you buy some dollars and swap into u. S. Treasuries, even at 2 the 30year is giving you a much better return when you consider europe has a currency i wouldnt touch with a tenfoot pole because they seem to debase it the eurozone is a mess dragged down by commitment by austerity by any price but the weakness isnt hurting our economy meerks it its pushing down rates. The only Thing Holding us back is the Federal Reserve refuses to cut rates to levels more in line with the rest of the world and the tariffs arent having much of an impact. Which universe is right . The one the bond market is forecasting a slowdown courtesy of what were importing from overseas or the biggest problem is finding enough workers in a red hot labor market its funny id love to say the optimistic universe is most likely to prevail but the talking heads talk about how a recession is inevitable i heard it all day when because President Trump isnt going and jay powell has trump called him a chowder head yet or is that tomorrows tweet he wont cut Interest Rates fast enough, something the fed seems to indicate when released today. This e rorodes confidence and business pauses new hires and invest mtds that le investments. Its easier to spook people than build confidence, one of the reasons i dont like to do it. Makes matters worse, the experts dont seem to care what were hearing from a walmart or amazon or target or costco or home dedd depot or lowes. Thats your little thing they take the yield curve. Thats bonkers sure, its inevitable one day i guess we could have a recession, thats always true the question is when when the yield curve inverted before the great recession, it was the end of 2005. The stock market didnt peak until 2007, thats not elpful. What major retailers tell us, the consumer is in great shape, thats data. Look at my watch thats right, my acronym for walmart, amazon, target, costco and home depot these companies canvass the behavior of probably every family in america, the ones that cant afford them go to the Dollar Stores and the trade war, lowes didnt get questions because the analysts were tired of beating a dead horse and marvin did a fantastic job congratulations. Where do i come down i think we could still talk ourselves into a recession if the president takes them on a trash talking wide receiver, they would actually learn to trade bonds. Bottom line to borrow a line from ftr, we had nothing to fear but fear itself. It sores angry rhetoric and frightening jeremiah from experts that dont listen to Conference Calls because they believe they are irrelevant so the next time someone tries to make you panic, keep in mind theyprobably dont know what they are talking about bernie in more aryland, bernie . Caller booyah dr. Jim. Whats going on caller go ravins, well see you tomorrow. Oh. Caller thanks for your guidance and advice over the year, jimmy. I got to say youre a great entertainer and watching you every night really always puts a smile on my face thank you, my friend appreciate that. Thank you look, i have to entertain to get viewers. Okay, i could just put people to sleep and i would have failed 14 years ago. Whats going on . Caller the stock im calling about is 31 below the 52week high. Okay. Caller it has a good history of beating earnings expectations and expected to report increases on the top and bottom tomorrow they have chinese sourcing because they sell clothing, appliances and computers and the ceo and cco should shares over the last two months. Okay. Caller jim, in light of the good consumer data we have and in light of the fact im a club member at this place, the parking lot is always full. Right. Caller please tell me what you think of Bjs Wholesale Club . An ex nay on the 2 dollar not what i want you to own go up 3, costco go up 100. I love to choose the universe where the economy is booming, not faltering but the negativity thank you william sapphire are seeding enough fear to erode confidence but please remember, most of the time they dont know what they are talking about. Mad money tonight, im talking to a ceo of a company that can offer real insight dont miss my exclusive with pay come and confused about the software, join the club. Tonight im going over everything you want to know about and people are afraid to ask and shares are on fire thanks to digization trend as more companies store data in the cloud, see how its banking on the move stay 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 call us at 1800743cnbc. Miss something head to madmoney. Cnbc. Com. Announcer only fidelity offers four zero Expense Ratio index funds directly to investors. And we have zero account fees for brokerage accounts. At fidelity those zeros really add up. Maybe ill win saved by zero doprevagen is the number oneild mempharmacistrecommendeding . Memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. To the wait did frowe just winners. Prouders everyone uses their phone differently. Thats why Xfinity Mobile lets you design your own data. Now you can share it between lines. Mix with unlimited, and switch it up at anytime so you only pay for what you need. Its a different kind of Wireless Network designed to save you money. Save up to 400 a year on your wireless bill. Plus get 250 back when you preorder a new samsung note. Click, call or visit a store today. Now that we got impressive numbers from a series of a highprofile retailer, wall street is calling down about the state of the economy they are going to the same s secose secular growth, the rise of Cloudbased Software i want to introduce you to a new name for us pay come software. This company got its start as a tech focus disruptor in the payroll space. We love disruptors but its all sorts of Human Capital managemen managements. Basically, they let companies replace a big chunk of the Hr Department with software the stock is up, are you ready nearly 1600 since it came public and why it could report another amazing quarter three weeks ago. Just incredible. The stock has more room to run lets take a closer look with the founder and ceo of the software and learn about the company and prospects. Welcome to mad money. Good to see you. Thanks for coming. Your company has by far, not just, but by far the best performance in a category we talked about a lot how is that possible and how does it differentiate you from the competition . First, im a fan of the show. Thank you. Pay com were transforming the payroll and hr industry through digitalization and transforming the way employers and employees use technology an example is if you look at the way employees use this technology, even four or five years ago, often times they had systems, multiple past words, emails, phone calls and what have you today they can have a direct relationship with the database like everywhere else in their life they dont call the airline and book a fight they dont email their bank to void a check nobody emails netflix to make movie selections and if they did, we would be still emailing netflix to make a movie solution at paycom, we allow employees to have a direct relationship with the database and its an easier experience for both of them and h. R. Can remove itself out of the Data Transfer process and into more strategy rules. So the hr could be involved how the company is run exactly that and performance through learning management initiatives and especially as you tie that to our performance system within paycom youre able to align both goals for the company and employees and track performance and so, you know, as we do more for the employee, were able to identify even more items that make it easier for both the employee as well as employer to increase performance and satisfaction for both. I think its important because weve had other Payroll Processing companies and they are excellent. They dont add the functionality. You keep adding great things last quarter you talked about the total adjustment market is growing for your business. Tell us about that i dont think its growing for other processers. So youve always had the payroll growth in total Addressable Market it was growing about 3 but what is really growing are the other hcm areas of talent management, talent al zicquisition, expense management and learning mana management and paycom has all of them as we continue to expand Value Proposition for the client, weve picked up other areas. How about legalization of pot . How about me too are you focused on those from the legalization of pot, how does it impact our own Employee Base and the Employee Base of our clients, maybe you would have some background check that you used to do that maybe you dont do as much of right now. I dont know specifically how someone would use us to impact that we have to be mindful of the appropriate compliance and regulation im curious about it. We talk about cannabis on the show and i keep thinking state by state but if i ran a business, i dont want stoners i need to know what the process is that i could weed them out without getting in trouble with the law . I think you have to follow the law. Right. Thats what paycom helps someone do there is different laws in different states for that. Right. And at the federal level youre still dealing with that i dont know we have a strong Value Proposition for specifically vetting out that particular issue, but we are very focused on the employee and that relationship they have with our clients. We talk a lot about the inversion of the year old curve on our network with the implication its got to be bad for hiring you have your pulse on hiring. To me, the issue in this country is still there are not enough workers. Somehow the media made it so that there is were about to be on deaths door whats your impression from the clients where we are in the economy . I think the economy is strong i dont know that were a great proxy for whats going on everywhere else. Were in growth mode. Right but you have that great medium size thats the core of our growth in this country. It is we arent really seeing a deterioration of growth in that area but, you know, were waiting to see what happens. Weve been through different cycles i mean, weve been in business since 21 years so we went through the 2002 recession, we went through the setup in 2004 for the 2008 recession and as a growth company, it just doesnt impact us as much as it might if we were more at a steady state. How did Revenue Growth accelerate slightly . 31. 5 versus 29. 9, we dont see accelerating Revenue Growth . Were having a lot of clients actually come to us and especially were getting a lot of referrals from employees, rank and file employees working at one company they go to another company used to the paycom experience its difficult to go backwards in technology so often times we get brought in were having more logo adds and more clients at the top end of the range and weve had an increase in retention for the first time weve moved from 91 thats strong into 92 last year and so all of that is really adding to our growth opportunity. You have a fabulous story and a to fabulous company and thanku for coming to explain it a lot of our people are interested in the software this service to Human Capital management and to Payroll Processing because they are all involved everybody works. Thats chad richardson, paycom founder and ceo with amazing performance. Now you know why mad money is back after the break. When earning season ends, another begins we talk about the cycle wacky none standard physical year report of numbers like most of the cloud. If youve been paying attention for the past couple years, you know the Cloudbased Software is one of the hottest groups in the market sometimes stocks sell off like they did during the big market meltdown last year and after each quarter, they come back with a vennvengeance there is one problem, they are almost impossible for the layman meaning you or me. When you try to read december skrep descriptions of the business, they are a goto Market Strategy scale. Whatever unless you have a Computer Science degree, trying to process this stuff is like bashing your head against a wall and that is really unfortunate you should never own the stock of a company you dont understand its too risky you wont have a clue whats going on but the cloud names have been so spectacular that i hate for you to miss out, thats why tonight and tomorrow because there are so many, ill give you a premiere on the best Cloudbased Software companies in plane english you dont have to go to stanford computer since tonight well start with one of the ones that reported well do all the ones that reported lets start with splunk. The numbers look good. For those of you that dont remember, its one of the original cloud Data Analytics base, they take the unformatted, unstructured data thrown off by connected devices and show their customers how to learn things from it. They turn digital trash into digital treasure no wonder the quarter is a blowout. The ceo is manager and in a business thats cutthroat, ive never heard a word that was bad. How about alteryx. Basically, their technology, the platform doesnt care where the data comes from or going its g. Its a platform thats stunning but i want to chase these levels for a pull back for alteryx. Next up there is service now one of the original cloud kings. Here is a company in the business of creating socalled digital work flows in Plain English Service now Software Helps other companies automate all sorts of back office processes a lot of them run much leaner operations, another Labor Saving Technology these are deflation companies. When they reported at the end of the july, the numbers were better than expected and not good en