Overs. But today the dow roared, the s p rocketed. And the nasdaq. We have another phenomenon at work. And its called rerating. Something when one Company Gives us a newfound positive. Were basically upgrading stocks from hold to buy mentally. Now today we had a whole host of reratings. It colored the whole tape so to speak. Its true that we cant go poof, or voila. You need a special backdrop to make the magic happen. Its all been done by analogy. Its about being willing to buy something at a higher price, because you think yesterdays price was just plain too low for that enterprise. Amazing a few days after the brexit vote, which we were told would be the end of the financial world, at least as we know it, we have the backup thats necessary for a rerate. Investors are now realizing maybe they were a little bit too headstrong about dumping stocks wholesale. Sure, the United Kingdom has chosen a path that will have high highly chances of recession. You have to look at the whole p panoply. It means that stocks are less dire than we thought and starting to rally. In some ways, its back to where we were before the brexit vote, one week ago. We find the stock market takes its cue from the price of oil. The correlation is back in play. The price of crude bounced off of 46 where it sank post brexit. That reflects genuine strength in the economy and its very positive for stocks. The big change from last time . When oil was here section dix d we were worried that the Federal Reserve would raise Interest Rates five or six times. We have stock nirvana. Higher oil and higher Interest Rates. Hallelujah thats Fertile Ground for the type of rating im talking about. Just because we have rerating, doesnt mean you have to stay away from the world of financials. A host of banks got approved by the fed after the close to buyback stocks and increase dividends, something badly needed if its ever going to get out of its miserable run. Maybe were getting some relief. So what sectors are going from hold to buy here with on the fly reratings . This week, a giant time share company, for 25. 30 in cash. Now whats happening is that off that deal were getting the rerating in the form of pin action. Were seeing the rerating of everything. Similar Business Model to diamond popped over 4 . Perhaps we werent paying enough for this asset. Marriotts had its best day in years, jumping 44. 5 . Suddenly, this disappointing group, [ baby crying ] which had been rated negatively for a long time, is back in the fashion show. How about price line, expedia, trip adviser, the Online Travel cohort. Theyre probably not concerned about the longterm impact of airbnb, which has been the psychological bain of the groups existence. Theyve got southwest and delta moving up. The technicians are dying on this. They thought they are all going down. Its been ages since the Airline Groups seen buyers. However, fleeting to the west sector in the entire book. What else got rerated . Consider the slowgrowing food stocks, general mills. Keeping the yield around 3 . That small beat translated into a 3 rally for kellogg, kraft and others. Then yeawere going to pay morer the other consistent members of the cohort. Then theres knight. So many people got it wrong. It put the stock down 20 . The sle sellers were worried ab some future orders, unforgivable. If youre watching mad money, you just shouldnt be doing that stuff. What people were worried about was the wrong thing, wrong metric. They should be worried about the inventory. The whole apparel business has had too much apparel. Nike said north american inventory is now clean. No more backlog. Bingo, that was the signal for under armour and lululemon and footlock footlocker. Now there were a host of other stocks that went higher, the banks, and those huge buybacks, and the dividend boost. Health care because of positive comments about a couple of biotechs. And stocks that had been doing well before brexit. But to me, its the reratings of these doggie dog sectors that took center stage. Because with the possible exception of the food group, these were the worse stocks in this market of before and after brexit. We didnt like the leisure stocks and the airlines, especially transports which hadnt participated at all in any major advance this year, and that had been flat, therefore a major overhang on the market. We also despised everything retail. More on retail later in the show. To see a bellwether like nike to give us hope is a big deal, plus footlocker could go higher, especially after its subpar quarter. Yesterday was a relief rally. Today was something a little more permanent. A rerating of some previously despised stocks. Its a welcome change. And it may lead to more positive change. Who knows what could happen to those Companies Alive and well and making great money. Ed kndie in florida. Caller as you know, following the e. Coli outbreak at chipotle, they are taking steps. Now all those short sellers have been pounding the stock to oblivion, including yesterday sir, i think theyll be wrong. I think theyll be wrong, and ill tell you why. Companies in there buying back stock. People came back, taco bell came back. Chipotle will come back. Andrew caller heres a booyah coming at you. Marathon oils going to buy cave rock. Was i correct in assuming the oil purchase in oklahoma was a good buy, and if so, why did marathon oil get so little coverage when they announced the acquisition . People dont, they cut their dividend. That caused a lot of people to say, you know what, weve got to be careful. I saw a piece in real money today on the leviathan field in israel. Lets go to devontae. Caller hello, mr. Cramer. Good afternoon. Caller last year i bought over 50 shares of paypal for 39 39. 72. Should i hold or sell . Paypal, you can follow what we do before we make our move, and we sold a lot of it above 40, its now coming back down. Were within a come of points of where we want to buy it again, but not yet, why . Because the analysts are so negative, they keep shooting at it. Youve got to wait until they stop until you can possibly dip your toe in the water. I think its a good sign for Companies Alive and kicking. Mad money tonight, it seems wall street may have lost its appetite for fast food. Im sitting down with ceo of sonic to see about returns. And the long holiday means big sales. Ill tell you if its time to start shopping for retail stocks. And its the largest tractor in the world, and its being unveiled tonight. We have the ceo of agco. So stick with cramer dont miss a second of mad money. Follow jimcramer on twitter. Tweet madtweets. Or give us a call at 1800743cnbc. Miss something . Head to mad money. Cnbc. Com. You pay your Car Insurance premium like clockwork. Month after month. Year after year. Then one night, you hydroplane into a ditch. Yeah. Surprise. Your Insurance Company tells you to pay up again. Why pay for insurance if you have to pay even more for using it . If you have Liberty Mutual deductible fund™, you could pay no deductible at all. Sign up to immediately lower your deductible by 100. And keep lowering it 100 annually, until its gone. Then continue to earn that 100 every year. Theres no limit to how much you can earn and this savings applies to every vehicle on your policy. Call to learn more. Switch to Liberty Mutual and you could save up to 509. Call Liberty Mutual for a free quote today at see Car Insurance in a whole new light. Liberty Mutual Insurance. What the heck is happening at sonic . The drivein hamburger chain across 45 states. It seemed like it was one of the only fast casual restaurant chains that actually fried. It has allday breakfast and value menus. It was doing well when so many competitors were ailing. And last week we got justification for weakness. On thursday after the close, son eck reported a slight one penny earning off a 42 basis. Big deceleration samestore sales growth from 65 in the previous quarter. Imagine talking about an industrywide slow down, possibly because of the Rainy Weather in april and may. Sonic might be attractive because as an excellent longterm story, they are in the process of franchising. More importantly, thats going to smooth out their earnings and volatility. Think of dominos pizza. But the stocks only worth buying if were dealing with a shortterm stumble, not a longterm issue. Lets check in with the ceo of sonic. Welcome back to mad money. Thank you, jim, grad to lad with you. Ive never seen you stuck. Ive never seen you say, were not quite sure whats going on. Im hoping youve had a little soul searching, because its unlike you and unlike sonic. Were certainly aware and comfortable with the initiatives that we have under way. What were less certain about is whats happening with the consumer. The consumer went through Something Like an attitudal shift in a broad basis. This was something that took all of us by surprise. The weather, yes, you mentioned, was unseasonably cool. Weave got the heat back, and its a good deal drier. As our business got soft late april into may with those weather issues and the consumer shift, as that occurred, we shifted to a little bit more of a value promotion to drive traffic and reversed some of the things we saw in may. The challenge was we were selling less drink and ice cream. Just about now, our media weights are shifting. Were still focussing on that value piece, the sonic boom box. But the media shift is occurring literally this week where were also promoting drinks and ice cream. So we should start seeing that pick up, and were anxious to see that pick up in this warmer, drier weather. I get natural gas figures by the hour, and the use of natural gas and air conditioning this week is way off the charts. Your timing couldnt be better. How about this competition issue. Its always been more difficult. Look, its, the industry, as you say, its an intense industry from a competitive stand point. Somebodys always trying to pickoff the stuff were doing, somebody is. Whos doing it now well, a little bit everybody is doing it, the Convenience Stores are trying to get breakfast and drink business, and dairy queens trying to get our ice cream, burger king is trying to get our hot dog business. But it is essential for us at this time of the year, because in the summer, we make hay while the sun shines. We sell more drinks and ice cream in the summertime. Its only this week that the medias been shifted back to those weights in those products in addition of the sonic boom box. Lets talk about labor costs. Many n im in the Restaurant Business myself. People arent thinking about opening up restaurants. How are you able to manage minimum wages and competitive wages against the other people in your industry . The competitive wage situation is one where were all on the same plane. I see that as a little bit less of a challenge. But there is growing pressure. Were in the Southern Plains is the greatest market penetration, texas and surrounding states do account for a majority of our revenues. But, yeah. I know you care about your work and what youre he doing. I happen to give mean oney to t School Next Door to me. You have a campaign called limeades for learning. You care more about just the shareholders and customers, not that those arent important constituencies. Tell us about Something Else youre doing. Weve had the limeade for learning Program Since 2009. Weve stepped it up quite dramatically. What this involves is sonic supporting classroom teacher grants all across our system. Every market where we do business, and whoell be contributing about 5 million a year. Month of may, we committed 1 1 million in the month of may alone. This is supporting teachers who very often, public schoolteachers, docking out of their pockets for materials for their students. This is where we do business and are a good corporate citizen. This stock has come down. Is this a case where its temporary . Well, we have announced ongoing that we have a stock repurchase program, recently, it strikes me, i think it was april we made the release that our board had increased that once again. And in the immediate circumstance, weve got about 155 Million Program focussed on stock repurchases. The rate we do that we only announce after the fact. But we have worked to aggressively focus on that when there have been buying opportunities, and i would describe it as a buying opportunity. Lets leave it at that. Thank you so much, cliff hudson, chairman and ceo of sonic, thank you. Happy to be with you. Thank you. Coming up, what happens when the worlds biggest tractor visits mad money. The ceo of agco has an important message, and hes breaking the news to crimamer when mad money returns. Its time to circle back to one of the most troubled groups out there, Department Stores, especially because nike just reported positive numbers. Maybe things are Getting Better out there. The polarization of this group has been staggering. Since peaking last year, kohls is down 53 . Nordstrom down 53 . The two exceptions of the Department Stores that didnt peak in 2015, mostly because if it had been free falling for years, jc penneys and sears. Things have gotten so bad, you have to start asking yourselves, which of them has what it takes to survive in this ultra hostile environment. Thats why were going to rank these stores for survivability. Meaning their ability to survive the onslaught of amazon, the valueconscious consumer, the design of the Shopping Mall and some sort of fatigue in shopping in general. Were going to grade each Department Store. How fast the sales are falling, how fast the earnings are shrinking. We going to rank them from 16. And when we add up the scores we come up with buys and sells. Lets start with brothers. The only difficulty is figuring out who comes in first, nordstrom or j krchc penney. The fact is pennys up against some easy comparisons after years of mismanagement. Plus nordstrom is the overall biggest revenue growth, 6. 9 gain in 2015 versus 3 for pe y pennipenn pennys. Kohls comes in third. Its better than dillards in fourth place with a 5 decline which was in turn better than macys. Last place goes to sears holdings. It posted a 6. 1 drop in store sales last quarter. Then we have survivability. How badly are the earnings getting damaged . Jc penney is the clear western. Ev winner. The companys margins continue to expand, including a 350 basis point upcrease in t point increase. Macys comes in second, despite its earnings per share coming down 28. 6 the last quarter. In third we have this dillards which saw market erosion, but worse was kohls. You might wonder what could be more hideous, how about nordstr nordstrom. Fifth place, down 60 , actually a little lower than that. The companys spending heavily. Sears, losing money hands over fist saw a dramatic last quarter. Ouch. The next thing, major insight in the ability of these stores to remain solvent. Dillards comes in first place. In terms of the companys actual survival. That means the store is safe. Nordstrom comes in second, even though they have 1. 15 billion in debt. Macys comes in third. It has a cleaner Balance Sheet than nordstrom as a vast bulk of macys debt doesnt come due until 2020. And even though its spread out over the following two decades, macys has over 1. 1 billion in cash. However, macys saw its Free Cash Flow sink. Thats why i think nordstroms in a better position. Kohls, fourth place, it has a debtladen Balance Sheet but none of it comes due until after 2021. Im too nervous, the truth is, kohls didnt generate enough earnings per share to cover the payout. Its a red flag, plus the precash flow. Pennys comes in fifth, heinous Balance Sheet. 2. 7 billion, but 4. 8 billion in debt. However they plan to pay off in the next two years. I know its repetitive, sears. They will likely continue selling off assets to pay its debts. Given that the companys cash flow gets worse. And thats without addressing pension obligations. They have the ability to sell or monday advertise something in order to prolong the agony. Finally, the strategic flexion nl. Meaning the ability to resist amazon. Addressing the value conscious consumer. Nordstroms doing everything they can to fend off competition and reach the sweet spot. Second place goes it pennys. Theyve made some really savvy moves, including bolstering its partnership with sephora for instore salons. Remember sephora cosmetics have become a necessity in this era of incredibly highresolution selfies. Third place going to kohls. Unfortunately, kohls hasnt done much, and theres management uncertainty. Macys comes in fourth. Theyve really struggled to adapt. We thought at one time they really had it goingoing. Their longtime ceo is stepping down. Dillards is in fifth place by default, we already know what they are doing. Familyowned company. We barely heard a peep out of management. But thats still better than sears, the worst of the Department Stores. They also have kmart. Run by a Hedge Fund Manager with fewer and fewer options as time goes on. Sears has been left behind, and it doesnt help that their ceo announced his departure. So lets add up the results of the four categories to get the final Department Store standings, and remember, the company with the lowest points win, while the one in the highest is in most danger. Macys and kohls have 14. Id stay away from all the Department Stores, nordstrom is the most safe, followed by jc penney, and dillards. The stronger players may be worth the trade for the people who arent afraid, but not for t