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My mission is simple: to help you make i, tsa. I'm not here to make friends, I'm just trying to save your money. My job is not only to entertain you, but also to teach, explain, and put everything in its place. Call me at 1-800-743- CNBC. Tweet @JimCramer. Finally, this market took a breather. The Dow fell 128 points.
The S&P fell 0.38%. The Nasdaq fell 0.67%. Although at the beginning of the session we fell much more. You know what I have to say? I will say that it was long overdue . Everything became too easy. People lost their vigilance. How do I know? Because the Uber driver was making too much money on Tesla.
Because the student trip was a huge success at Ballard Power's stock market. Because the shoeshine finally chose a winner, and that winner was AMD. Because these movements had become too crazy, and they had to be stopped. Even the sacred Virgin Galactic was overthrown. Yes, it even reached space—ticker SPCE, or “spice” as I call it.
Listen, not all sales are the same. Some are much worse than others. It wasn't a total destruction in the market. It's probably like pruning trees that grow too close to power lines . Sure, the post-shredder look is awful, but it's better than risking a California-style fire. I like it when the market is "pruned" because the trees grow back—and hopefully become stronger, slower, and more stable.
Still, it's surprising that the market has declined with so much good news. Think about it. We had a deal where Morgan Stanley acquired E*TRADE through a stock swap. I think this is a smart move, as E*TRADE was barely catching up with upstart Robinhood. So why not sell to a great company like Morgan Stanley?
What does the buyer get from this ? Morgan Stanley just reported its best quarter of all brokers and banks. And what happened? They made a lot of money. And the actions—no reaction. I would mean a considerable amount of capital. They needed to act to generate interest, ensure growth, and generate additional revenue.
It's very easy to see the synergy here. Like the Schwab-Ameritrade deal earlier, this meant Morgan Stanley only lost 4.5% today, even though they are issuing a lot of new stock, and I have to say this company has moved up in my ranking of brokerage stocks I like. As CEO James Gorman told me, "I quote, we are now the gorilla in wealth management." End of quote.
He explained how this acquisition, quote: "Continues to shift our profile to a less active and more regulatory-friendly one, without damaging our world- class institutional business." I agree. I tried to work there, got a job, but it didn't work out. This firm, I like this version of the firm. I like Gorman.
There is no big demographic crossover here. E* TRADE clients can benefit from the level of advice they will receive from Morgan Stanley. E*TRADE has excellent direct-to- consumer technology that will benefit the new parent company's customers. And, of course, the merged company can earn on the credit balances of new customers brought in by E*TRADE.
By the way, this deal is compelling evidence that Robinhood, the private startup you invited to the show, has truly disrupted the entire brokerage industry with its zero-commission business model and incredibly easy-to- use app. I mean, damn it, I see kids playing with my phone and buying and selling stocks.
That's all they do. That's all they do. I look at Regina Gilgun. She has two young children, they're not allowed to trade stocks, but if they could, they'd take that Robinhood app and play it like Battlestar Galactica, to the fullest. This is what happens when you get hundreds of millions of dollars from venture capitalists and aggressively expand for the sake of scale, with little regard for profits.
A very, very long time ago, and 25 years is exactly that kind of time. 25 years ago I founded thestreet.com, you know, an online publication, blah blah blah. And I got some venture capital. It was crazy how badly the venture capitalists wanted me to lose money in order to become a winner. The more I spent, the more they loved me.
Robinhood is now doing the same thing. So, the rest of the industry must respond, which is what E*TRADE and Morgan Stanley are doing. We will hear from Domino's representatives later. They took a hit from venture capital, but came back stronger and crushed them. Now, that wasn't the only good news, aside from Morgan Stanley.
We got some great economic numbers from the Philadelphia Fed. They were shocking, they were eye-opening. This was in addition to New York's indicators for the week, which indicate that we are seeing an industrial revival in this country, even despite a significant slowdown in China. These figures are so good that it is impossible not to believe that we are seeing acceleration.
The number of unemployment claims remains at a half- century low, despite an apparent slowdown in China. But wait, that's not all. I always wanted to say that. Love him or hate him, President Trump has been great news for the stock market. The consensus on Wall Street is that Bernie Sanders cannot win if he wins the Democratic nomination.
I'm not a political scientist, I'm just relaying what I hear all the time. But if you watched yesterday's debate, Sanders' main rival, Mike Bloomberg, was, as everyone says, simply crushed. From a stock market perspective, this means that Trump has a better chance of being re-elected, and the market likes Trump.
So, yesterday's debate should have been a victory for the "bulls." That's why we went up at the opening this morning, before that enthusiasm dissipated in a wave of mid-afternoon anxiety. The fourth positive is Procter&Gamble. They gave a presentation to the Consumer Analysts Association of New York (CAGNY), a prominent group, where they told the audience that the coronavirus outbreak would cause a significant slowdown in their business, primarily in China.
How did they react? The company's shares went up. They jumped $1 and 14 cents. Sherwin ignores the warning as if it's nothing. So what the hell scared people? Why did the market eventually go down? What was behind this ? Okay, I'll tell you. First, I think, in a broader context, it was in South Korea.
In particular, a coronavirus outbreak in a church group that led to 73 infections, with two-thirds of them coming from a single “ superspreader .” Maybe they're too close there , but it's pretty scary. The outbreak in South Korea reminds me how difficult it will be to stop the spread of the virus if it gets beyond the 15 people who have it here.
Uh, okay. And don't forget that we also had two deaths on that cruise ship that was quarantined so badly in Yokohama, Japan. Oh , and it doesn't help that the United States could face a shortage of drugs that are produced in Chinese factories. We have transferred a huge amount of our pharmaceutical production to China.
Maybe that wasn't the best idea. This year, Hubei, a province that is currently under complete lockdown, has 42 contracted pharmaceutical factories. Oh. I mean, thanks to Dan D'Amico, the former CEO of Nucor, for bringing this to my attention, after which I called a few doctors to make sure it was true, and it is.
Plus, you know, air travel will be even more restricted, which means more bad news for hotels and airlines. Thanks, as always, to Phil LeBeau of CNBC. Phil dealt with these things. That's the thing. It could have been much worse. We could have fallen just as hard as we had earlier in the day. Many stocks fell sharply, including a " wall of shame" quarter from ViacomCBS, which sent its shares down 18%, and a profit warning from Norwegian Cruise Line Holdings, which sent its shares down nearly 7%.
Now I understand, as do you, the weakness of Norwegian, who had to cancel cruises in Asia. And I would say that the publicity from the epidemic for the cruise industry is as bad as it gets . But Viacom CBS? I found this failure stunning. CEO Bob Bakish has said that the CBS-Viacom merger is a "2 + 2 = 5" situation.
Including, including, including, including right here. Right here. Our playground. Our show. Our playground. Our show. I know. Our playground. Our show. You. Me. Right now I feel like it's more like "2 + 2 = 3." That's why so many big investors simply gave up on this stake. I think we might have to get it.
I don't know if you remember. I think we may have to get the Mad Money “wall of shame” again if things don’t improve in this horrible, disgusting, worthless and very bad situation. This was a learning experience for investors looking to chase high value, including, unfortunately, my charitable foundation.
Do you know what I will do? I should get a sticker, stick Viacom C on my forehead to remind people what a fool I was to believe in this merger, even if it gives me a rash. Nevertheless, there were also real winners. The biggest is Domino's Pizza, which grew by more than 25% thanks to a much better-than- expected quarter.
We'll talk to Domino's later. How about Zillow? The company, now free of Spencer Raskoff, reported numbers that turned out to be not as bad as feared. Shares soared 17%. In summary, respites like this one can prolong the life of the rally, but without good news about the virus, I'm pretty sure we're in for more respites in the future.
So be prepared. He was right here. Right here . Do you think I forget about this? Do you think it doesn't matter to me? Do you think this just passes me by? Do you think I can't live with this ? Ralph from Ohio. Ralph. Er, yes, Mr. Kramer. Yes. A year and a half ago, you had a chart of the top five oil refining stocks on the show .
Of course. You put Marathon Petroleum at the top of your list. Yes. My question to you, Mr. Cramer, given your intelligence, should I buy more of these stocks? Buy more. You know, I wasn't a fan of oil stocks. I don't know if people understand this, but it's an oil refinery. And much of what is bad for oil companies is good for refining.
And it is a very well-run oil refining company. God, they got a great price for Speedway. So I don't mind. Although I am adamant in my opinion that in the long term, even though there is good growth coming, oil stocks are not. We'll send them to Virgin Galactic. This is a stock that continues to fall after their, you know, recent news.
Hey, hey, Jamal from Delaware. Jamal. Hello, Jim. I've been listening for a long time , this is my first time calling . Good. Two months ago, you had the CEO of Zillow on your show, and the next morning I bought their stock. And now I'm 60% ahead. I wanted to know if it was time for me to sell or if I should hold on?
Is this Zillow? Yes. No, don't sell. First, the unit that performed well —a great choice—is their old premier unit. Now, if they start developing this home sales division, I think the price will go up significantly. Congratulations, Mr. Barton. It was a very good quarter and a very successful conference.
I need to switch to Hank from Europe. This is Hank. Hello, Jim. Yo, yo. Your show. Thank you. Hey, I called two years ago about Dexcom because my dog uses their CGM sensor. And after that call and your recommendation, the stock skyrocketed. Yes. She recently received a Tandem T-Slim insulin pump. Yes.
And the Control-IQ and Basal-IQ features are simply incredible. We're excited about this pump, but the stock is on the rise right now. Would you buy them now? You see, that's the problem. First of all, thank you for telling me about this Dexcom. This is one of those things we've been silent about, I don't know, maybe since the 40s.
Uh , Tandem, we pushed it very hard . And my problem with advising you to buy it now is that people got really mad at me because we promoted it and it didn't grow immediately. As the stock is actively shorted, a breakout has now occurred. I don't want to tempt fate, although I will stay with Dexcom.
Because I must say, this is the best "mousetrap" in the fight against a terrible disease, as you know from your daughter. Kevin Sayre, thank you for coming to the show so often. Tom from Kentucky, Tom. Jim, a "buoy" from the Bluegrass State. I love the Bluegrass State. The Horse Museum, it's just incredible.
Horse Museum, keep going. Uh, thank you very much for your dedication and inspiration. My wife and our pension have become much happier. This makes me feel great. It's been a long day because of Channel 2. So I feel a little better now. What happened? Uh, in light of the hostile takeover of Hewlett-Packard by Xerox and Carl Icahn, I'm interested in your forecast.
You know, they should give, they should give Enrique Linares some peace, you know. He came, he inherited this job. Uh, he did a terrific job , and I have to tell you, I know they probably want him to eventually buy Xerox. I hope he does n't have to, but I would stick with HP because I think they do a good job and I like Enrique.
I think the guy, Enrique, is a good person. And my god, they don't even let him work for half a year before pouncing on him like a cheap suit. You know, like that Marshall suit I wore when I went to the Golden Socks. Okay, it's time for the market to take a breather. It's time for Virgin Galactic to cool down a bit for a few seconds.
I think a decline could actually support a rally. But I expect to see more days like today unless we start seeing positive news about the coronavirus. Oh my god, money tonight . Could the coronavirus actually cause another recession? Well, I'm going to put this risk in perspective, because no one else does.
Next up— pizza delivery. Domino's reported a hot quarter, and its stock is really rising. Is this movement just a pipe dream? Ugh. Can it last? And I pick the favorites and reveal my new top picks, new to the biotech sector that you may not be focused on. to .
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