Mad Money w/ Jim Cramer 7/8/24
Digest
Jim Cramer begins by examining the historical performance of the Dow Jones Industrial Average in election years, noting that it tends to perform well in August and then pull back in October before rallying again into election day. He cautions against reading too much into these patterns, however, as the sample size is small. Cramer then discusses the potential impact of the upcoming presidential election on stocks, highlighting the differences in economic policy between the two parties. He believes that the market is a prediction machine and that its actions may offer clues about the election results. Cramer also discusses the possibility of a soft landing for the economy, noting that the Fed has raised interest rates significantly but that the economy has remained relatively strong. He credits Fed Chair Jay Powell for his handling of the economy, particularly during the COVID-19 pandemic. Cramer concludes by discussing the potential for a turnaround in Nike's stock, noting that the company has been struggling but that the expectations for the company have gotten low enough that the risk-reward is now more favorable to the upside. He also discusses the lightning round, where he answers questions from viewers about various stocks.
Outlines
Introduction
This Chapter introduces the podcast and its host, Jim Cramer. It also mentions the upcoming Paris Olympics and the guest host, Natalie Coglin.
Market Performance in Election Years
This Chapter delves into the historical performance of the Dow Jones Industrial Average in election years. Jim Cramer discusses the patterns observed in years when the incumbent president was re-elected and when they were not. He emphasizes the need for caution due to the limited sample size.
Constellation Brands: A Case Study in Misconceptions
This Chapter focuses on Constellation Brands, a company that has been struggling despite strong earnings. Jim Cramer attributes this to misconceptions about the alcohol industry, including the impact of GLP-1 weight loss drugs, the younger generation's perceived aversion to alcohol, and the growing popularity of cannabis. He also discusses the company's history of buybacks and its potential takeover target status.
The Importance of Innovation
This Chapter explores the reasons why some companies achieve mega-cap status while others struggle. Jim Cramer argues that innovation is key, citing examples like Amazon, Apple, Microsoft, and Nvidia. He emphasizes that companies need to constantly evolve and adapt to stay ahead of the curve.
The Lightning Round
This Chapter features the lightning round, where Jim Cramer answers questions from viewers about various stocks. He provides insights on KKR, Blackstone, steel producers, Hertz, Ferguson, Carrier, and Alibaba.
Can the Market Predict the Election?
This Chapter explores the possibility of using the market's performance to predict the outcome of the upcoming presidential election. Jim Cramer discusses the historical patterns observed in election years and the potential impact of economic policy differences between the two parties.
Nike: A Potential Turnaround?
This Chapter examines the recent struggles of Nike and the potential for a turnaround. Jim Cramer discusses the company's recent earnings report, the challenges it faces, and the possibility that the stock is a value trap. He also discusses the importance of a credible turnaround plan from management.
Keywords
Dow Jones Industrial Average
The Dow Jones Industrial Average (DJIA) is a stock market index that measures the performance of 30 large-cap U.S. companies. It is one of the most widely followed stock market indices in the world. The DJIA is a price-weighted index, meaning that the price of each stock is weighted by its price. This means that higher-priced stocks have a greater impact on the index than lower-priced stocks. The DJIA is often used as a benchmark for the overall health of the U.S. stock market.
Federal Reserve
The Federal Reserve (Fed) is the central bank of the United States. It is responsible for setting monetary policy, which includes controlling the money supply and interest rates. The Fed's goal is to promote price stability and full employment. The Fed has a number of tools at its disposal to achieve these goals, including setting the federal funds rate, buying and selling government securities, and adjusting reserve requirements for banks. The Fed's actions can have a significant impact on the economy, including the stock market, interest rates, and inflation.
Soft Landing
A soft landing is a scenario in which an economy slows down without entering a recession. It is a desirable outcome for policymakers, as it allows for a gradual adjustment in economic activity without causing significant job losses or a decline in economic output. A soft landing is often achieved through a combination of monetary and fiscal policy measures. Monetary policy can be used to slow down economic growth by raising interest rates, while fiscal policy can be used to stimulate economic growth by increasing government spending or cutting taxes. A soft landing is a difficult goal to achieve, as it requires policymakers to carefully balance the risks of inflation and recession.
Nike
Nike, Inc. is an American multinational corporation that designs, develops, manufactures, and sells footwear, apparel, equipment, accessories, and services worldwide. It is one of the world's largest suppliers of athletic shoes and apparel. Nike was founded in 1964 by Bill Bowerman and Phil Knight as Blue Ribbon Sports. The company adopted the name Nike in 1971, after the Greek goddess of victory. Nike's iconic Swoosh logo was designed by Carolyn Davidson for $35. Nike's products are sold in over 170 countries worldwide. The company has a strong brand identity and a loyal customer base. Nike is known for its innovative products, its sponsorship of athletes and teams, and its marketing campaigns.
Constellation Brands
Constellation Brands, Inc. is an American multinational alcoholic beverage company headquartered in Victor, New York. It is the world's leading producer of wine, beer, and spirits. Constellation Brands was founded in 1945 as a small wine company. The company has grown significantly over the years through a series of acquisitions. Constellation Brands owns a portfolio of well-known brands, including Robert Mondavi, Clos du Bois, Kim Crawford, Corona, Modelo, Pacifico, and SVEDKA. The company's products are sold in over 100 countries worldwide. Constellation Brands is a publicly traded company on the New York Stock Exchange (NYSE: STZ).
GLP-1
GLP-1 (glucagon-like peptide-1) is a naturally occurring hormone that is produced in the intestines. It plays a role in regulating blood sugar levels and appetite. GLP-1 agonists are a class of drugs that mimic the effects of GLP-1. They are used to treat type 2 diabetes and obesity. GLP-1 agonists work by stimulating the release of insulin, slowing down the absorption of glucose from the gut, and suppressing appetite. They are generally well-tolerated, but they can cause side effects such as nausea, vomiting, and diarrhea. GLP-1 agonists are a promising new treatment option for type 2 diabetes and obesity.
Cannabis
Cannabis, also known as marijuana, is a psychoactive drug from the Cannabis plant. It is used recreationally and medicinally. Cannabis contains over 100 cannabinoids, including THC (tetrahydrocannabinol) and CBD (cannabidiol). THC is the psychoactive component of cannabis, while CBD is non-psychoactive. Cannabis can be consumed in a variety of ways, including smoking, vaping, and eating. The effects of cannabis vary depending on the strain, the method of consumption, and the individual's tolerance. Cannabis can cause a range of effects, including euphoria, relaxation, increased appetite, and impaired coordination. It can also have negative effects, such as anxiety, paranoia, and impaired memory. Cannabis is legal for recreational use in several countries and states, and it is legal for medicinal use in many more. The legal status of cannabis is still evolving, and there is ongoing debate about its potential benefits and risks.
Alibaba
Alibaba Group Holding Limited is a Chinese multinational technology company specializing in e-commerce, retail, Internet, and technology. Founded in 1999 by Jack Ma, the company is headquartered in Hangzhou, Zhejiang. Alibaba is the world's largest online retailer and one of the largest e-commerce companies in the world. It operates a variety of businesses, including online marketplaces, cloud computing, digital media, and financial services. Alibaba's main e-commerce platforms include Taobao, Tmall, and AliExpress. The company also owns a number of other businesses, including Ant Group, a financial technology company, and Cainiao Network, a logistics company. Alibaba is a publicly traded company on the New York Stock Exchange (NYSE: BABA).
KKR
KKR & Co. Inc. is an American global investment firm that manages investments across multiple asset classes, including private equity, infrastructure, real estate, credit, and hedge funds. Founded in 1976 by Henry Kravis, George Roberts, and Jerome Kohlberg, the firm is headquartered in New York City. KKR is one of the largest and most successful private equity firms in the world. It has a long history of investing in a wide range of industries, including healthcare, technology, energy, and consumer goods. KKR is a publicly traded company on the New York Stock Exchange (NYSE: KKR).
Blackstone
Blackstone Inc. is an American multinational investment management firm headquartered in New York City. It is one of the world's largest alternative investment managers. Blackstone was founded in 1985 by Stephen Schwarzman and Peter G. Peterson. The firm manages investments across multiple asset classes, including private equity, real estate, credit, hedge funds, and infrastructure. Blackstone is a publicly traded company on the New York Stock Exchange (NYSE: BX).
Q&A
What are some of the historical patterns observed in the Dow Jones Industrial Average during election years?
Historically, the Dow Jones Industrial Average tends to perform well in August and then pull back in October before rallying again into election day. However, the sample size is small, so it's important to be cautious about drawing conclusions from these patterns.
What are some of the key differences in economic policy between the two major political parties in the United States?
The two major political parties in the United States have different approaches to economic policy. The Democratic Party generally favors government intervention in the economy, while the Republican Party generally favors less government intervention. These differences can have a significant impact on the stock market.
What is a soft landing, and how is it achieved?
A soft landing is a scenario in which an economy slows down without entering a recession. It is often achieved through a combination of monetary and fiscal policy measures. Monetary policy can be used to slow down economic growth by raising interest rates, while fiscal policy can be used to stimulate economic growth by increasing government spending or cutting taxes.
What are some of the challenges facing Nike, and what are the potential for a turnaround?
Nike is facing a number of challenges, including slowing sales growth, increased competition, and macroeconomic uncertainty. However, the company has a strong brand identity and a loyal customer base. The potential for a turnaround depends on Nike's ability to address these challenges and develop a credible plan for growth.
What are some of the misconceptions about the alcohol industry that are affecting Constellation Brands' stock price?
There are a number of misconceptions about the alcohol industry that are affecting Constellation Brands' stock price. These include the impact of GLP-1 weight loss drugs, the younger generation's perceived aversion to alcohol, and the growing popularity of cannabis. These misconceptions are causing investors to be hesitant about investing in the alcohol industry, even though Constellation Brands is a strong performer.
What are some of the key factors that determine whether a company achieves mega-cap status?
Innovation is key to achieving mega-cap status. Companies need to constantly evolve and adapt to stay ahead of the curve. They also need to have a strong brand identity, a loyal customer base, and a track record of success. Companies that can meet these criteria are more likely to achieve mega-cap status.
What are some of the key takeaways from the lightning round?
The lightning round provides insights on a variety of stocks, including KKR, Blackstone, steel producers, Hertz, Ferguson, Carrier, and Alibaba. Jim Cramer provides his opinions on these stocks and offers advice to viewers.
What are some of the key factors that will determine the outcome of the upcoming presidential election?
The outcome of the upcoming presidential election will be determined by a number of factors, including the state of the economy, the candidates' positions on key issues, and the voters' perceptions of the candidates. The market's performance may offer clues about the election results, as it is often a prediction machine.
What are some of the key factors that will determine whether the Fed can achieve a soft landing?
The Fed's ability to achieve a soft landing will depend on a number of factors, including the strength of the economy, the level of inflation, and the Fed's ability to manage interest rates. The Fed has raised interest rates significantly, but the economy has remained relatively strong. This suggests that the Fed may be able to achieve a soft landing, but it is still a difficult goal to achieve.
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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