Mad Money w/ Jim Cramer 7/16/24
Digest
Jim Cramer dives into the recent small-cap rally, exploring its drivers and potential implications for investors. He identifies seven key factors contributing to the surge, including the decline in inflation, the possibility of a Trump presidency, and increased risk appetite among investors. Cramer emphasizes the importance of staying invested to capture these significant moves, highlighting the potential for further gains in the Russell 2000 and other small-cap stocks. However, he also acknowledges the market's overbought condition and the potential for a correction, particularly in the tech sector. Cramer then delves into the performance of Goldman Sachs and Morgan Stanley, highlighting their strong investment banking businesses and potential for continued growth. He also discusses the recent hack of Snowflake, advising caution for investors. In the Lightning Round, Cramer provides quick insights on various stocks, including Palo Alto Networks, Lindy, Serrepta, and Toast. He concludes by addressing the disconnect between the positive economic indicators and the prevailing sense of gloom among the public, attributing it to high inflation and political polarization. Cramer emphasizes the importance of investing in American businesses despite the prevailing negativity, highlighting the potential for wealth creation through a strong stock market.
Outlines
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Introduction
This Chapter introduces the podcast episode and the topic of discussion: the recent small-cap rally. Jim Cramer, the host, begins by posing a question about who to root for at the Paris Olympics, transitioning into the main topic of the episode.
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Small-Cap Rally Analysis
This Chapter delves into the recent small-cap rally, analyzing its causes and potential implications for investors. Jim Cramer identifies seven key factors contributing to the surge, including the decline in inflation, the possibility of a Trump presidency, and increased risk appetite among investors. He emphasizes the importance of staying invested to capture these significant moves, highlighting the potential for further gains in the Russell 2000 and other small-cap stocks. However, he also acknowledges the market's overbought condition and the potential for a correction, particularly in the tech sector.
![](https://s3.castbox.fm/webstatic/images/book.5d108c35.png)
Goldman Sachs and Morgan Stanley Performance
This Chapter focuses on the recent performance of Goldman Sachs and Morgan Stanley, highlighting their strong investment banking businesses and potential for continued growth. Jim Cramer analyzes their earnings reports, emphasizing the positive outlook for their investment banking and sales and trading businesses. He also discusses the recent hack of Snowflake, advising caution for investors.
![](https://s3.castbox.fm/webstatic/images/book.5d108c35.png)
Lightning Round
This Chapter features the Lightning Round segment, where Jim Cramer provides quick insights on various stocks, including Palo Alto Networks, Lindy, Serrepta, and Toast. He offers advice on whether to buy, sell, or hold these stocks based on his analysis of their current market conditions and future prospects.
![](https://s3.castbox.fm/webstatic/images/book.5d108c35.png)
Market Outlook and Conclusion
This Chapter concludes the episode by addressing the disconnect between the positive economic indicators and the prevailing sense of gloom among the public. Jim Cramer attributes this to high inflation and political polarization. He emphasizes the importance of investing in American businesses despite the prevailing negativity, highlighting the potential for wealth creation through a strong stock market.
Keywords
Small-Cap Rally
A significant increase in the value of small-cap stocks, typically defined as companies with a market capitalization of less than $2 billion. This rally is often driven by factors such as declining interest rates, economic growth, and investor optimism.
Russell 2000
A stock market index that tracks the performance of the 2000 smallest companies listed on the U.S. stock exchanges. It is often used as a benchmark for the small-cap sector and is considered a gauge of investor sentiment towards smaller companies.
Inflation
A general increase in the prices of goods and services in an economy over a period of time. Inflation erodes the purchasing power of money and can lead to economic instability. The Federal Reserve (Fed) aims to keep inflation at a target rate of 2% per year.
Federal Reserve (Fed)
The central bank of the United States, responsible for setting monetary policy, including interest rates and the money supply. The Fed's actions have a significant impact on the economy, including inflation, employment, and the stock market.
Trump Presidency
The presidency of Donald Trump, the 45th president of the United States, from 2017 to 2021. Trump's policies, including tax cuts and deregulation, had a significant impact on the economy and the stock market.
Goldman Sachs
A multinational investment bank and financial services company headquartered in New York City. Goldman Sachs is known for its investment banking, trading, and asset management businesses.
Morgan Stanley
A multinational financial services company headquartered in New York City. Morgan Stanley is known for its investment banking, wealth management, and asset management businesses.
Snowflake
A cloud-based data warehousing and analytics company. Snowflake's platform allows businesses to store and analyze large amounts of data in the cloud.
Diversification
A risk management strategy that involves investing in a variety of assets, such as stocks, bonds, and real estate. Diversification helps to reduce the overall risk of a portfolio by spreading investments across different asset classes.
Magnificent Seven
A group of seven large-cap technology companies that have dominated the stock market in recent years. These companies include Apple, Microsoft, Amazon, Alphabet (Google), Meta (Facebook), Tesla, and Nvidia.
Q&A
What are the key factors driving the recent small-cap rally?
Jim Cramer identifies seven key factors, including the decline in inflation, the possibility of a Trump presidency, increased risk appetite among investors, lower interest rates benefiting smaller companies, a sense that smaller companies have been left behind by big-cap stocks, a potential for more mergers and acquisitions under a Trump presidency, and a shift in investor focus from big tech to smaller companies.
What advice does Jim Cramer give to investors regarding the current market conditions?
Cramer emphasizes the importance of staying invested to capture significant moves in the market, particularly in the small-cap sector. However, he also acknowledges the market's overbought condition and the potential for a correction, particularly in the tech sector. He advises investors to be cautious and consider diversifying their portfolios.
How are Goldman Sachs and Morgan Stanley performing in the current market?
Both Goldman Sachs and Morgan Stanley are performing well, with strong investment banking businesses and potential for continued growth. Their earnings reports reflect positive trends in their investment banking and sales and trading businesses, driven by factors such as increased M&A activity and a favorable regulatory environment.
What is Jim Cramer's outlook on the overall market?
Cramer believes that the market is overbought and there is a potential for a correction, particularly in the tech sector. However, he remains optimistic about the long-term prospects of the stock market, emphasizing the importance of investing in American businesses despite the prevailing negativity.
What is the disconnect between the positive economic indicators and the prevailing sense of gloom among the public?
Cramer attributes this disconnect to high inflation and political polarization. He argues that while the economy is performing well, the high cost of living and the divisive political climate are creating a sense of pessimism among the public.
What is Jim Cramer's advice to investors regarding the current market?
Cramer encourages investors to stay invested and take advantage of the opportunities presented by the strong stock market. He emphasizes the importance of diversification and cautions against putting all their money into a small number of stocks.
What are some of the stocks that Jim Cramer recommends in the Lightning Round?
Cramer recommends Palo Alto Networks, Lindy, Serrepta, and Toast. He provides brief insights on each stock, offering advice on whether to buy, sell, or hold based on his analysis of their current market conditions and future prospects.
What is Jim Cramer's view on the potential for a correction in the market?
Cramer acknowledges the market's overbought condition and the potential for a correction, particularly in the tech sector. He advises investors to be cautious and consider diversifying their portfolios.
What is Jim Cramer's perspective on the role of the Federal Reserve in the current market?
Cramer believes that the Fed's actions, including potential rate cuts, will have a significant impact on the market. He anticipates that rate cuts could benefit certain sectors, such as banking and wealth management.
What is Jim Cramer's overall message to investors?
Cramer encourages investors to stay invested and take advantage of the opportunities presented by the strong stock market. He emphasizes the importance of diversification and cautions against putting all their money into a small number of stocks.
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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