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My mission is simple – to make you money. I am here to create a level playing field for all investors. There is always a bull market somewhere, Cramerica. I'll be the one making and train you. So call me at 1-800-743- CNBC or tweet me at Jim Cramer. How the hell does this market keep roaring while there is still so much despair over the coronavirus?
Anger is raging across the country, and it's aimed squarely at Wall Street. This relentless growth seems unfair, senseless, and heartless. Thousands of people are dying, while financial managers are rejoicing in the most enthusiastic stock comeback in history. Today, the Dow Jones is up another 559 points, the S&P is up 3.06%, the Nasdaq is up almost 4%, and the people are up 9.6%.
How is this even possible? Well, why don't we start with the human argument against me and the market? Here's a photo from last week, when the crazy growth was enshrined in history textbooks. Dow Jones' best week since 1938. Then my head, then breaking news: over 16 million Americans have lost their jobs in 3 weeks.
16 million. Full disclosure , I didn't order this interesting comparison to show you how heartless I am. Well, I would rather see stocks go up than down because most of you own stocks and are not short sellers. Believe me, there is no joy in filling stocks right now. And I agree that this is wrong. But the contrast between the booming stock market and the destroyed job market tells you a lot about what's happening at this moment.
First, every branch of our government sees what is happening. They know that the loss of 16 million jobs is unacceptable. So the Fed , the Treasury, the White House, and Congress are doing everything they can. If you qualify , the Treasury will give you money this week – a check for $1,200 to every taxpayer who made less than $99,000 last year.
They also support small businesses with low-interest loans, and these loans will be forgiven if you don't lay off your employees. All of this is part of a $2.2 trillion rescue package. Meanwhile, perhaps more importantly, the Federal Reserve is pumping $ 2.3 trillion into the economy by buying all sorts of bonds, including junk bonds, allowing underserved businesses to stay afloat.
They also buy municipal bonds, which...This is so that cities won't have to make massive budget cuts at the worst possible time. And now the Treasury and airlines have just agreed to a bailout package, raising concerns among yet another group of stocks. If you want to know why the Dow Jones had its best week since 1938, it's very simple.
The 30 stocks in the Dow Jones are mega-capitalized companies. This is big business. Big business that thrives when money flows into the market, whether through the Fed, the Treasury, or Congress. And when they come together to support the economy , it's the big companies that achieve the best results.
You must understand that the Dow Jones is not supposed to be representative of the economy as a whole. There are no nail salons, hair salons, or auto mechanics in the main indexes. We do n't sell lunches here. Perhaps it would be fairer if big business were crushed along with everyone else, as we saw during the Great Recession.
But when big business is crushed, many more layoffs occur. You don't want to cut off your nose to annoy yourself, do you? Don't get me wrong. I really wish the government was much more generous to people who work to earn a living. $1,200 checks, expanded unemployment benefits–that’s great. You can always do more.
But make no mistake, we are witnessing an unprecedented attempt by the federal government to save the economy, and I welcome that. There are no gangster bankers here who reap the benefits. There was no wild speculation like there was in the roaring 20s. There is simply a global tragedy that has hit our country particularly hard.
Without these huge aid packages, rescue packages, whatever you want to call them, I don't want to be dismissive right now. I think we would see a much worse situation than the financial crisis of 2007-2009 . It would be something like the Great Depression. As far as I know, anything that prevents depression is good news.
The second reason why this market continues to skyrocket is because we have become too negative. Remember that the market here is not rapidly rising to new highs. We are only partially recovering from the staggering losses of last month. When you want to think about this, remember this . We fell, and I don't use that word lightly, fell from 29,000 Dow to 18,000 in a couple of days.
The shares were destroyed. A just-released April survey of Bank of America managers found that cash levels are now at their highest since 9/11. The stock split is at its lowest level since 2009. These were great buying opportunities. This is incredible. When the federal government took steps to rescue the economy, this negativity proved excessive.
You may think that all this growth is fake because it is supported by government intervention. I see this every second on my Twitter feed. If you think so, then I have the cure. Uh , go buy some gold. We are experiencing a deflationary moment. Witness the endless fall in oil prices despite yesterday's production cut of 9.7 million barrels per day.
Our government is making every effort to offset deflation, and as long as that's the case, gold mining stocks are a buy. Third, let's be honest. There's a real zero-sum exercise going on here, and I don't like it one bit. Big business is getting bigger and more powerful, while small and medium-sized businesses are being destroyed, even though the Ministry of Finance is doing everything possible to save them.
It scares me, but it's the new normal. Consider the incredible rise in Amazon shares, which have now risen from 1,676 in mid-March to nearly 2,300 today, a new high. Can you imagine how many small businesses will never come back because they were forced to close and Amazon is now taking their customers?
You simply can't beat Amazon on price unless you're another colossus, Walmart. They have too much scale. Of course, Amazon and Walmart have been destroying family-owned stores for decades, but the lockdown has added fuel to the fire of a process that could take years, perhaps even decades. I can only think of one way to turn back time, and that is through tough antitrust controls, which I do n't think will happen anytime soon, because then it would lead to higher prices for everyone.
The last reason is that the stock market continues to grow. There is hope, maybe an article about climate, but there is hope for a vaccine. Later tonight we will hear from Emma Walmsley, CEO of GlaxoSmithKline, which has formed an alliance with competitor Sanofi to create a vaccine. They can mass produce it, perhaps by the end of next year.
Meanwhile, Johnson & Johnson reported a star-studded quarter this morning where they spoke in detail about the vaccine they are working on. This is certainly ahead. Maybe we're talking about this year, and the results will be published in the first quarter of next year. Maybe it's too early. Many vaccine candidates are already in development , although I think they will be very difficult to produce.
All this is in addition to the good news from Gilead regarding their antiviral drug remdesivir . Of course, this doesn't mean everything will be fine. JP Morgan and Wells Fargo scared me with their talk of giant loan losses in the future. I don't hear about testing, mass intervention, contact tracing, which are all necessary if we are ever going to reopen the country for a stable economy .
I doubt the market will return to its March lows now, with all this money being thrown at it , but I wouldn't be surprised if we were hit by a pullback, given the fact that we are being overbought as much as oversold right now. But that's not what the market is worried about at the moment. After all, the stock market is made up of large, huge companies, not the small and medium-sized businesses that are the backbone of our economy, which make up 85% of our economy.
You don't necessarily like it. I know it's not. But it is the big dogs with impeccable balance and gigantic scale that can survive this lockdown. Unlike family businesses, they can afford to go without customers for a very long time. This is unfair. This is wrong. But whether you like it or not, it's reality.
Let's go to Deja in California. Deja. What's going on, Jimmy Kramerica? How are you, sir? I'm holding on. How are you, partner? Everything is fine. As you said, I'm calling from California, originally from Bucks County, Pennsylvania. I know this is your old homeland. I bet I lived there. Oh, yes. Oh, yes, sir.
Very quickly, if I may, before I ask my question, please wish my roommate Gary a happy birthday. He's turning 28. I love your show. Happy birthday. Oh, is there time for this? Time, friend. Happy birthday. Thank you. Thank you. Thank you. Thank you. And then, very quickly, my question . So, besides Netflix, who do you think will be the winner in terms of profits?
And besides the banking industry, who do you think will be the losers in the earnings that will be released this week? Okay, you'll like anyone who's doing great in the stay-at-home economy and the work-from- home economy. This is Netflix, and this is Activision. Look, it's Roku . We all love Roku. This is Teladoc.
Good numbers after closing. The losers will be the financial companies because no one can understand what the hell they are doing. But thank you for the kind words and happy birthday. Mike in New York. Mike is gone, Mike. Boo, Professor Kramer. How are you doing? It couldn't be better. What about you, Mike?
Me too. Me too. Me too. So, a participant in Action Alerts. I can't wait for tomorrow. Tomorrow is cool. Of course. We will be cool. How are you doing? So, earlier this year we took a position in Activision. Uh, we took our profit and sold the stock. I want to know if now is a good time to revisit this stock as the video game market shows an increase in gaming potential due to COVID- 19.
Uh, I saw, I listened to Bobby Kotick, the CEO. I have known him for a long time. And I've never seen him so optimistic. And I have to tell you, it made me think, you know what? Even at 63, I know that we sold it for a good price for a charity, it could work. This could work here. Let's please turn to Reed in California.
Family. Family. Hey, thanks. Hey, thanks for everything you've done during these crazy times, and I appreciate you taking my call. Ah, nice to meet you, Reed. How are you? Hey, my question to you is about American Express. I bought the stock a few weeks ago when the price was around the 90s and was hesitant to buy more given the market volatility.
This morning the price fell by almost 5% and reached a weekly low. Is now a good time to buy? I didn't like how they behaved after the JP Morgan and Wells Fargo report. Uh, they have a lot of travel, vacations, uh, a lot of corporate expenses, uh, they have a small business. All of this, in my opinion, is problematic.
I think you should stay away from this . I don't think this is the right place for this. Okay, listen, you may not like this, but we are living in a new reality. The Dow Jones index simply does not reflect the broader economy. Tonight on Mad Money, GlaxoSmithKline just announced a collaboration with Sanofi to develop a coronavirus vaccine.
How will two pharmaceutical giants using a vaccine against each other help in the fight against the pandemic? I have an exclusive. So how does monetary policy help certain sectors, such as defense? I'm going to find out for the main reasons. And BioReference Labs helped deploy the first testing sites in the United States.
What's next for BioReference? Well, I'm talking to the person in charge. to ? Visit madmoney.cnbc.com. Hmm.
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