Mad Money w/ Jim Cramer 10/4/24
Digest
This episode of Mad Money with Jim Cramer begins with a discussion of the surprising market reaction to the strong job growth report, where stocks rose despite a significant increase in interest rates. Cramer attributes this to the Fed's recent rate cuts and the market's belief that the economy is not headed for a crash landing. He then previews the upcoming earnings season, highlighting key companies like PepsiCo, General Motors, and Delta, and provides insights into their potential performance. Cramer emphasizes the importance of focusing on earnings rather than interest rates during a rate-cutting cycle, believing the Fed's actions will support the stock market. He encourages investors to look for opportunities in undervalued sectors like banks. He also discusses upcoming financial earnings for Wells Fargo, JP Morgan, and BlackRock, highlighting their potential for growth and undervaluation. The episode features a technical analysis of the treasury market, where investors are betting on higher long-term interest rates despite the Fed's rate cuts. Cramer brings in technical analyst Harley Garner to provide insights into this trend. Garner explains the large net short position in 10-year treasury futures and its potential implications for the market, suggesting that a significant unwind of this trade could lead to increased volatility and higher interest rates. Cramer answers rapid-fire questions from viewers about various stocks, providing his insights and recommendations. He highlights his preference for RTX (Raytheon Technologies) over FTAI (Fuel Tech), his caution about ASTS (AST SpaceMobile), and his bullish sentiment on Shopify. He also discusses the potential bankruptcy of Spirit Airlines and criticizes the Justice Department's antitrust regulation, arguing that it may have contributed to the airline's current situation.
Outlines
Market Reaction to Strong Job Growth and Earnings Season Preview
Cramer discusses the surprising market reaction to the strong job growth report and previews the upcoming earnings season, highlighting key companies like PepsiCo, General Motors, and Delta.
Focus on Earnings, Not Rates and Financial Earnings Analysis
Cramer emphasizes the importance of focusing on earnings rather than interest rates during a rate-cutting cycle and discusses upcoming financial earnings for Wells Fargo, JP Morgan, and BlackRock.
Treasury Market Analysis and Garner's Technical Perspective
Cramer discusses the unusual activity in the treasury market and brings in technical analyst Harley Garner to provide insights into this trend.
Smarties Candy Company and Halloween Strategy
Cramer celebrates National Smarties Day and interviews Liz D, co-president of the Smarties Candy Company, discussing the company's strategy for Halloween.
Lightning Round: Stock Recommendations
Cramer answers rapid-fire questions from viewers about various stocks, providing his insights and recommendations.
Spirit Airlines Bankruptcy and Antitrust Regulation
Cramer discusses the potential bankruptcy of Spirit Airlines and criticizes the Justice Department's antitrust regulation.
Keywords
Generative AI
Generative AI refers to a type of artificial intelligence that can create new content, such as text, images, audio, and video. It is powered by large language models and deep learning algorithms.
Antitrust Regulation
Antitrust regulation aims to prevent monopolies and promote competition in the marketplace. It involves laws and policies that prohibit anti-competitive practices, such as price fixing and mergers that reduce competition.
Earnings Beat
An earnings beat occurs when a company's reported earnings exceed analysts' expectations. This can lead to a positive reaction from investors and a rise in the company's stock price.
Market Share
Market share refers to the percentage of a particular market that a company controls. It is a measure of a company's dominance in a specific industry.
Cash Flow
Cash flow refers to the movement of cash into and out of a company. It is a key indicator of a company's financial health and its ability to generate profits.
Buyback
A buyback occurs when a company repurchases its own shares from the open market. This can increase the value of remaining shares and signal confidence in the company's future prospects.
Flight to Safety Trade
A flight to safety trade occurs when investors move their money from riskier assets, such as stocks, to safer assets, such as U.S. Treasury bonds, during times of economic uncertainty or geopolitical instability.
Double Bottom
A double bottom is a technical chart pattern that suggests a potential reversal of a downtrend. It occurs when a stock or asset price falls to a low point, bounces back, and then falls to the same low point again before rising.
Q&A
What was the surprising market reaction to the strong job growth report?
Stocks rose despite a significant increase in interest rates, attributed to the Fed's recent rate cuts and the market's belief that the economy is not headed for a crash landing.
What are some key companies to watch during the upcoming earnings season?
PepsiCo, General Motors, Delta, Tesla, AMD, and HP Enterprise are among the companies with upcoming earnings reports and analyst meetings.
What is the importance of focusing on earnings rather than interest rates during a rate-cutting cycle?
The Fed's actions are expected to support the stock market, so investors should focus on finding opportunities in undervalued sectors like banks and look for companies with strong earnings potential.
What is the significance of NVIDIA's 25th anniversary of the GPU?
The GPU is a crucial component in generative AI, and NVIDIA's anniversary highlights the company's role in driving innovation in this rapidly growing field.
What is the technical analysis of the treasury market, and what are the potential implications?
Investors are betting on higher long-term interest rates despite the Fed's rate cuts, creating a large net short position in 10-year treasury futures. This could lead to increased volatility and higher interest rates if the trade unwinds.
What is Garner's long-term outlook for interest rates?
Garner believes the Fed will take rates much lower again, potentially below 2%, due to factors like domestic oil production and automation. She warns investors about the risks of fighting the Fed.
What is Cramer's advice on FTAI (Fuel Tech) and ASTS (AST SpaceMobile)?
Cramer prefers RTX (Raytheon Technologies) over FTAI due to its valuation and expresses caution about ASTS, considering it too hot.
What is Cramer's opinion on Shopify?
Cramer believes Shopify is at a great level to buy, highlighting the company's strong performance and the CEO's leadership.
What is Cramer's perspective on the potential bankruptcy of Spirit Airlines and the role of antitrust regulation?
Cramer criticizes the Justice Department's antitrust regulation, arguing that it may have contributed to Spirit's current situation. He believes that allowing the merger with JetBlue might have been a better outcome for consumers.
Show Notes
Listen to Jim Cramer’s personal guide through the confusing jungle of Wall Street investing, navigating through opportunities and pitfalls with one goal in mind - to help you make money.
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