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tv   Mad Money  CNBC  April 20, 2022 6:00pm-7:00pm EDT

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think jetblue might have good stuff, so beaten up that looks interesting and guy adami, happy 4/20 >> yeah, happy 4/20 to everybody celebrating. thank you for watching "fast money." right now. my mission is simple, to make you money i'm here to level the playing field for all investors. there is always a bull market somewhere and i promise to help you find it. "mad money" starts now >> hey, i'm cramer welcome to "mad money. welcome to cramerica other people make friends, i'm trying to make you some money. so call me at 800-743-cnbc or tweet me at jim cramer i said it before and i'll say it again. you want companies that make things and do stuff at a profit and then return some of the profits to you, the shareholder, with stocks that sell at
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reasonable valuations. you might think that is a narrow funnel but ondies lake today you could save yourself a lot of heartache and i mean this kind of heartache, but sticking with what works today we saw the hazards of violating new rules with the dow rallying 250 points and filled with sthis and the s&p is down and the nasdaq and the stocks are expensive, tumbled 1.2%. and netflix reported a bad quarter with a net loss of 200,000 subscribers when they were looking for 2.5 million increases. take this. netflix itself made mistakes they haven't been able to monetize 100 million users who borrow the service from friends and relatives and they're worried about tech and saturation but it is valued based on the
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subscriber, not the earnings as long as it kept signing up new people, wall street was ignoring the cost of the stock once that signup engine sputtered, netflix is another stock that doesn't fit the market's new mantra. we have no idea what we should pay for a no growth company that now sells for an unreasonable price. now we have to put it in the bucket of pandemic pull through. is it another peloton? don't tell me it is a donkey sign could it be a zoom that is how mega cap stock losing 35% of its value on a day. let's contrast that with a stock that we bought from the charitable trust today in response to the action in netflix. walt disney. because disney has its own streaming service and it was treated as a pathetic fellow traveller to netflix and so it plunged to a 52-week low
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disney is spending money on content and the amount of spending on the streaming service is temporary nevertheless, unlike netflix and the one-hit wonders, disney has a lucrative theme park complex and stable that could be extended from here to eattorney itd. netflix is a building. disney is a theme park that could be used for any ride as for netflix, i refuse to go on a squid game themed roller coaster. the espn plus streaming service isessential, if you watch fantasy football disney should not be tarred with the same broad brush of netflix. you're pretty much getting the streaming service for free it is okay to punish disney for spending $71 billion to buy fox. in a massive overpay that is now in the rearview mirror and i know the ceo has been in a tough spot but i'm giving him a
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chance i bet he'll create value from here and at these prices i think disney is going to work and that is why i bought more for the travel trust and you know what my plan is here i'm going to buy it on the way down i'm going to be a buyer. and there is more. like proctor and gamble. today the number was instantly panned because of the raw cost explosion up more than $2.5 billion in the quarter. that is worse than death but because proctor was able to pass on the price increases as will proctor makes thing that are profit with a great returners and it is a dividend aristocrat. it was down the first half hour of trading shows that many traders don't know what works and what doesn't in this environment. should tattoo this on their foreheads. a company with low margins and let opportunity to return capital while suddenly going
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from cheap to expensive. they could pass on the cost to the consumer and so there is no problem so the stock finished up 2.7% the same goes for johnson and johnson. j&j have been telling us that once covid was beaten people would go for elective surgery again. and it is a growth that game you four times that i was looking for but immediately the stock started plummeting by the time the cfo talked on "squawk box," it is down $6. but what is j&j? it is the ultimate blue chip company with the best dividend buy back and splitting into threep enterprises with the laggard suddenly soaring j&j was a buy on the pullback because you knew the once broken third leg was in great shape it only rallied 12 points from
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the lows and you could make money on of stupid people. they're addicted to returning money to their shareholders. we'll give you one more. because you know the universe is bigger than people think morgan stanley now here is a company that does stuff, taking care of wealthy individuals and businesses and has a stock that sells for 12 times earnings and it iss inexpensive. and morgan stanley performed the best, them and bank of america were the two stand outs. it has a great ceo and the multiple is shrinking as the fed is raising rates that makes their business more profitable it is down almost $20 from the high and makes no sense. we bought some last week for the charitable trust i'm itching to buy more. there is one stock in the universe that i follow that doesn't fit the funnel and that is tesla. it is real expensive and it is not returning cash
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but the report of an outstanding quarter tonight and the ceo elon musk could not be denied we are as we say sioux generous. as someone who thinks it is a good idea to stay in the hamarkt this is the bull funnel, okay. while avoiding almost anything else almost being tesla because it will just make your life miserable. it is not that type of prescription but it works while we work our way through the fed's aggressive tightening cycle to dan in connecticut. >> caller: hey jim >> i'm doing well. how about you. >> caller: living the dream. what are your thoughts on royal caribbean with covid fears seventiling sand summer right a around the corner. >> i'm still partial to norwegian cruise lines let's go to mark in iowa.
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>> from a founding member household and good health and bowe yeah, jim. >> booyah. >> caller: when a stock goes down, dividends could go down. i would like your opinion on the dividend safety of a particularly vexacious club stock. it does not look like it will return to its previous highs any time soon. should it still be a hold in at a 4 % dividend aeo >> american eagle, i do not want to say it was a good pick. it was not, okay i do think that matthew boss came on the other day and he's the retail guru from jp morgan said he thinks it is fine and the stock is too cheap excuse me. and that is why we bought some today. now i again, i reiterate, we have not done a good job in aeo but i don't want to give up on it that is fair how about harriet in florida.
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>> caller: hey, jim. jim i would like to know your out look for salesforce could it gain any previous luster or is the current price where it ought to be. >> i'll tell you, this is a tough one. because we've liked it since it was at $8 and we've own it in the trust forever. we did trim some and it is come back down. it is tempting but we want to see the quarter so that z that sound like a ringing endorsement. we're going to own it. how about that do you like bennyoff and brett taylor and willing to go along for the ride because that is what we've done since $8 and got involved and like it please find companies that fit these characteristics. it works through the fed's aggressive tightening circle on "mad money," we mentions netflix and what it could mean for the future of the streaming service and all eyes are on
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inflation but where could it be headed i'm going off the charts to find out. and haliburton got pinned down and are there issues within the company. i'll given you my take so stay with cramer. >> announcer: don't miss a second of "mad money." follow @jimcramer on twitter have a question? tweet cramer, #madtweets send jim an e-mail to madmoney@cnbc.com or give us a call at 1-800-743-cnbc miss something head to madmoney.cnbc.com. your record label is taking off. but so is your sound engineer.
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can netflix bounce back from this meltdown? is it just completely toast. today netflix saw the stock collapse for the second quarter in a row last time they recorded a hideous number and sent the stock plummeting an astounding 35% today. for everything else in the streaming business, this is the definition of a -- end game. the implosion netflix is horrifying but if you took things seriously when the company reported fourth quarter in january, i think you might have seen this coming. management gave you a grim forecast for the next quarter and the stock plunged 22% the next day this time we learned that this disappointing forecast was way too optimistic rather than having weaker growth, they subscriber shrinkage for the first time in over a decade.
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so tonight i want to go over what went wrong for netflix and what it means for the stocks future along with the rest of the streaming space because i think they're different animals entirely netflix is have ago tough time it peaked around $700 in november and then it grew with any other nasdaq name. that is the water shed it didn't help that we fired a warning shot last forecast but big investors stepped in and buying large stakes and calming the sellers. probably kicking themselves now. the thing is, we knew that the first quarter would be bad for netflix. we knew because that is what they told us three months ago. they would only have 2.5 net subscriber additions when wall street was looking for 5.81 million and the results were much lower than the naanalysts expected. and it is covid overhang but
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they made encouraging noises about the rest of the year it looks like they didn't have a handle on what the problem was or how bad it hurt and that hurts bad. fast forward to last night netflix actually delivered a big ernst beat even as the sales came in weaker than expected but the number subscriber came in negative 200,000 they previously got it for plus $2.5 million some of it is from russia when they suspended service over there, if you put that aside this is terrible disappointment that made a lot of people feel like -- they've lost their heads on this one. in their letter to shareholders which was kind of a blah, it wasn't worrisome, just kind of a prosaic letter, and they say they have high household penetration but a ton of people share their accounts and that is holding them back. they want to crack down on
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account sharing and go after your sister and your brother, your aunt, i don't know. but i don't think that gets it with the crux of what is happening. you may disagree with me on that last year netflix saw a big slow down from 2020 when they got a boost in the early stages of the pandemic at the time, management thought the slowdown was because covid pulled forward a ton of new subscriber but this is a larger sad trend. netflix sees four causes, first their hostage to connecticuted tvs. the tech problem second is there is an over sharing problem. a house hold -- 100 million households are getting free netflix from sharing that is your problem that means service is far more saturated than we thought. and there is streaming competition in the space and fourth a more sluggish global economy. it demends on what you mean by
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plan the ceo said their working on ways to crack down on account sharing but it might be a year before they start rolling it out worldwide. and the ceo reed hastings floated membership options, that doesn't make me feel confident i thought netflix had pricing power but apparently not and they say it is a year or two away but i got a better way for them. they say it here on tv, you can't use that humor me say you have a proven winner, a squid game that is giving you the biggest numbers in the world, netflix could seek sponsors for one or two ads during the show and run ads when they have massive viewership thanks to programming and they could charge fortunes for the big championship games in sports it makes so much sense it is sickening. if i were there, i would say, oh, god, jim is so negative but he's right let's go do this it is okay
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you know what is the worst part of all of this their guiding for net subscriber losses of 2 million, much weaker than expected and that floats down to not so hot revenue and earnings number. they talked about how this is always a soft quarter from them and they expect the dynamics from the first quarter to continue but i'm concerned about the possibility of a turn. it feels like it is a giant. every problem it is facing something management saw coming. they just didn't used to care. years ago netflix said they didn't mind if you shared your account. even a year ago they said they wouldn't turn the screws on members that lend out their passwords and as for competition, they would say bring it on. the real competition was the time people spent asleep i sleep three and a half hours don't count me and they were confident in their slate of content, that is not the case i think the competition has done
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real damage because it is much harde harder for netflix to get a handle these days every network wants to keep the best program for their own streaming service. and after half a dozen different streaming services it doesn't feel like a bargain. it feels like a cable bundle they saw subscribers drop off. the earnings per share were much better than expected due to excellent operating margins. netflix has gotten cheaper it is 20 times this year's earnings estimate but that doesn't matter this is a subscriber growth story without subscribers growing. they used to love the stock and have no interest in the subscriber numbers are shrinking and i wouldn't put too much into the earnings guidance. i don't think netflix has much visible into how the business will unfold going forward and they sure don't seem to have a plan to right the ship
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i say no thank you but the pin action from netflix crushed everything related to streaming today. and i think that created some terrific opportunities as i mentioned before, we bought disney today for the charitable trust. you could follow by knowing the cnbc investing club. the streaming service is taking share and i'm intrigued by paramount global, down 9%. it sells for just 12 times earnings and well run. but netflix seems lost at sea without a plan to find the shore and i think it pullback was actually deserved. as for the other streaming plays that were collateral damage, the ones with the clean stocks and sound fundamentals that makes thing sell, profit and you know, paramount or disney. stick with cramer. >> coming up, if it feels like your dollar is being stretched to far, too fast you might be a home gamer with an ear to the ground cramer tackles inflation next
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right now the biggest story in this business right now, at this moment, is the rise of rampant inflation. we're caught between the out of control price increases for all sorts of goods and yes the federal reserve is out to restore price stability by raising interest rates and slamming the brakes on the economy. this is changed the character of the stock market, turning money losing growth tech stocks into pariahs as we saw today. if we want a more hospitable market, these higher costs are eating company as live and reluctant to trade on the future earnings the ones that are many years down the line, think about this. you have 8% inflation for as far as the eye could see, it means the future earnings will be worth less because a dollar five years than now might buy less
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than a dollar today. so if you want to get a handle, you need to understand where inflation could be headed. i like to look at all sorts of data points from government surveys and individual companies, the onces that have the pulse of input costs but i also like to take my cue from history and this is why we're going off the charts with larry williams, who has been in the this business since i was a zit faced teenager larry has written more than a dozen books, all which you could find on his cool website i really trade dotcom. and he has a record going back decades and the single most reliable technician for the past two years since you called the covid bottom in 2020 when most professionals and hedge fund managers were in chicken little mode there are two ways of looking at inflation. there is the federal reserve bank of atlanta, nice to have a fed reserve bank here to understand first it is called sticky
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consumer price index okay it measures the cost of a basket of important items that change prices slowly. the second cents flexible consumer price index, that changes really rapidly and thank you, larry take a look at this chart. which shows the 12-month range dating back to 1967. the sticky price cpi is in orange and the flexible price is in black williams points out that right now, the flexible cpi is at an all-time high and in fact he said it is in the zone where inflation peaks. which is what we're hoping for now let's zoom in on this chart that shows the three month rate of change for the core flexible cpi versus the 12 month rate of change in brown going back to 2016 so, you're any looking at rate of change charts not the actual -- rate of changes. according to williams, the consumer price index is a good
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leading indicator for the sticky consumer price index after prices for flexible goods start surging, evenly the stickier ones start to catch up and as you could see based on the three-month rate of change and the flexible price cpi already peaked last year it peaked last year. this tells larry that we might already be turning the corner on inflation. it is just not obvious to anyone with service yet while inflation is red hot, williams points out that over the last 79 years inflation doesn't tend to stay elevated for very long. when it goes above 2.5%, it only stays there for 29 months on average before coming back down. currently we've spent 14 months above the 2.5 mark which means we might be half way through last but not least, don't forget that williams looks at the action in a given indicator and draw up a cycle forecast based on how it moves. so take a look at this kpchart.
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the consumer index and according to williams, the cpi has a five-year cycle and should peak in the middle this year. and continuing heading lower through 2025 who is thinking that, right? now if he's right, that inflation could beat, and no one is thinking. that would be very good use for the stock market where is williams hiding we have a whole bunch of different indices, you have the dow jones and the best blue chip stocks and the larger s&p 500 and the nasdaq if you want to focus on volatile cohort but under it all there is the advanced decline line. the a.d. line. measures the number of stocks going up on a daily basis versus the number that are going down this is an important tool that gives you a sense of the markets' breath and how wide it
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is williams said you could get a real sense of the stock market and he's very right but he likes to use the liene to make cyclica forecasts. if you could get a sense of where the advanced decline line might be headed and you know when broad based declines are more likely to occur this is a more stable way to take attention to the market than looking at an index which is what most people including myself do. so take a look at this chart going back to may of 2021. with larry's cyclical forecast in red as he sees it, the dominant short-term cycle in the advanced decline line has lasted for about 60 days. although there is also a yearly cycle about 240 days the red line combined both to give us a forecast and based on that forecast, williams thinks it is about time for the advanced decline line not to go down but to roar. to roar higher if that is the case then you
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have to expect a major broad based rally in the stock market, too. he thinks this rally could carry well in may and possibly the end of june. of course his forecast is suggesting a pull back into august with stocks rebounding again in the summer. this methodology can't tell you the size but it is reliable when it comes to predicting the market's overall bottom line, larry williams suggested one crazy thing is that inflation could soon peak and then the stock market's bottom due for a nice broad rally from here to the end of june given this track record, though, it wouldn't surprise if he many you heard them both. chad in wisconsin. >> caller: big jimmy chill booyah. >> we're doing good here. >> caller: second time, long timer here i want to get your thoughts real quick on the broader area, real quick before the ticker name, consumer staples area, it seems
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like the valuation for the stock prices are starting to get a little high including the funds and leading into my ticker name here, we got earnings call next week on monday for ticker ko, coca-cola. what is your thoughts -- >> i rarely say this about a stock. i don't care about the term of coca-cola as long as james quincy is there, i have backed him from day one, from day one and i'm going to continue to back him i'm cool with coke and thank you for being -- ronald in louisiana. >> caller: yes, jim, thank you for taking my call >> of course. >> caller: my question is paypal stock is dropping lately one of the vice presidents went to work for walmart. walmart stock is going up. could walmart be getting in position to buy out paypal and enhance its credit operation >> no. i just saw by the way my writing
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partner just sent me a hideous unbelievable paypal package that dan showman gave up. $32 million in compensation. and my trust owns it we're getting killed in it thank god we're long walmart no chance for a buyout i've been telling people to read the investing club newsletter that paypal is just stay away mode tonight's chartist say that history suggests that inflation could be peaking and we're about to have a big nice rally through the end of june. no one believes either of those but i like larry much more "mad money." could today's decline in halliburton, and i'm taking on the loud recessionistas and all of your calls. tonight's edition of "the lightning round. so stay with cramer.
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all right, what theheck is happening in the oil service space. with the price of crude over $100 a barrel, you think that all of the companies that facilitate drilling would see the stocks flying here you have to be honest, it is more complicated yesterday halliburton reported a pretty darn good quarter but then today they posted a hideous number and the pin action dragged down the entire group. including haliburton so i think it is really simple they are beating the stuffings
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out of baker hughes. they are running circles around the competition. you could call poetic justice because years ago haliburton tried to get a new deal and the two competed with each other i can't blame the regulators it would have been any standard. but this deal was to important to hal, and then fast forward to 2017 and the oil industry -- a undisciplined swooped in and then gm rivals and they invested next to nothing in the business. then less than a year later they announced they would spin offices, separate company again. the whole thing was a farce. unless you were a shareholder. in which case it felt more like a tragedy. while baker hughes has struggles to get bearing, haliburton has
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improved itself. if you can't join them, beat them trade very bluntly, bad news for baker hughes is most likely good news for haliburton it makes me so confident let me tell you, i like haliburton so much that when it was down today, what did we do yeah, we bought some for the charitable trust which you could follow by joining the cnbc investing club we have good analysis on our morning meeting at 10:20 and we bought more today well yesterday and today when the stock dipped courtesy of the bad numbers from baker hughes never mind that haliburton reported a good quarter yesterday. we already know how these guys are doing. so now i want to drill down into hal's quarter. because not just a good stock, it has the finger on the pulse of oil and gas industry at the
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time when fossil fuels are ascendent. they help oil and gas producers find the stuff and drill for it. their partners extract it the most efficient way possible there are three major companies, haliburton and schlumberger and it caughts for 40% of the sales compared to 20 for slub. hal has exposure to russia which accounts for 2% of the sales can is por than double that for schlumberger how about the quarter? how when haliburton reported they had a modest top and bottom line beat. because they took a small hit in ukraine and some were nit-picking the completion of the -- and the stock already had such a substantial run into the quarter. and the thing was up 82%
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year-to-date going into the -- as of the close of monday so i could understand obviously there are guys who want to ring the register but even with all of that, haliburton stock bounced back because the kceo jeff miller ha some interesting things to say we see significant tightness across the oil and gas chain in north america. support and strengthening customer demand against a sold out equipment market have expected to drive expansion and completion in division margins end quote. that is what we wanted one thing that worries me, domestic oil producers, they've been very disciplined about putting new money to work. that is a theme i've said over and over again they would rather have buybacks and invest in drilling that is why haliburton raised their customer spending forecast they're now predicting over 35% growth this year up from 25% growth they were calling for three months ago
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that is huge and unreflected in the stock and international house customers spending growth in the mid teens this year. they also pointed to a strong pipeline of new projects that are scheduled to start in the middle east, they kind of underpromise and i think they could deliver because aging oil wells require production at the same level management said the international business is gaining momentum in the current quarter. they expect to accelerate. unless you think this is all about the war in ukraine creating arts official scarity haliburton said it existed before the russia invasion according to hal, the oil and gas industry now invested in what is known as shorter cycle investments whether than put their money in things that took years to -- and this created a floor. everybody issen bracing these because they want to turn off
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the spigot that is great for haliburton the great success of fracking and the wells complete far faster than traditional ones but they'll run out of crude if they don't hire prince hal and they spent a lot of time talking about digitalization that means -- because massive expensive [ inaudible ] and includes fracking equipment and a differentiator where fossil fuel companies care about the environment. i also think that is a big edge that baker uses. most important, even though hal had a huge run, the earnings growth is to explosive that the stock still is surprisingly reasonable valuation it is up 30% next year and the stock sells for 15.5 times next year's earnings and as great as the numbers look, i wouldn't be surprised if it's way too low.
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haliburton got hit today and yesterday they were fantastic. i think you have to this rare opportunity to buy a best of breed stock which is exactly what we did for the charitable trust. "mad money" is back after the break. >> coming up next, cramer's bringing the thunder and answering your burning questions. in today's edition of "the lightning round.
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[copy machine printing] ♪ ♪ who would've thought printing... could lead to growing trees. ♪ >> lightning round is sponsored by td ameritrade >> it is time. it's time for "the lightning
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round. and then "the lightning round" is over. are you ready, skee daddy? let's go with dave in illinois dave. >> caller: dr. cramer, we miss you on monday. >> how have you been doing some reckoning in mexico what is happening. >> caller: sounds good this stock is in the health care space, jim down on the year, but the good -- still like isrg. >> agree with you entirely i think that isrg is one of the stocks you must not look at it on a day-to-day basis and a year to year basis and that is how good their machines are. dave, great game bob in massachusetts >> caller: hey, jim, thanks you for all you do greetings from beantown. wondering your thoughts on santana. >> i think that i have to tell you, i think it is a sensational job, it is my favorite bank in
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europe and i looked at it multiple times to own it for the charity trust i can't get to pull the trigger. i'm afraid i'll move to to $4. let's go to shannon in florida >> caller: hi, jim thanks for taking my call. >> how are you good? >> caller: i'm doing good. thank you. i was wondering if you have any thoughts on atlantic infrastructure ticker ay. >> that is a foreign company that i need to know more about and i promise i will do more on it, come back with a more considerate response let's go to allen in florida allen? >> caller: jimmy chill. >> chill is in the house. >> caller: i know that nuclear plays a big part of our clean energy to generate electricity and i think we don't have enough supply and now we have problems with russia andure --ureainy um.
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>> be ready to get cut in half for double and those are the kind of stocks that i do not recommend. let's go to brian in kentucky. brian? >> caller: thank you for taking my call. my family has been invested in u.s. bank for a lot of years and i just inherits a bunch of stock. are they still -- i'm look fog dividends. >> it is a very well run bank but i prefer the bank of morgan stanley. it is an investment bank it is got a very low price, buys back stock and has a good yield. that is my favorite. matthew in georgia >> caller: what is going on, jimmy chill. it is matt from i'm warner robbins, georgia, we like to provide don't let your twitter -- >> some people are really horrible they could wreck the experience. that is what they want so i'm not going to let them. what is up >> caller: shake them off. i'm calling about a company building an impressive
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eco-system and something to focus on lately is that their profitable what do you think about axon enterprise. >> we've been behind the company since about '20 and we think it is a terrific company. it is a platform it's basically tasers and service. let's go to steve in new jersey. steve? >> caller: hey, jim. how are you doing tonight? >> i'm doing fine. how about you? >> caller: doing all right the stock i'm calling about today is the consumer finance company. that pays 95 cents a share dividend and it is 8.24% what is your opinion of one main holdings. >> too risky at this point in the cycle. particularly if the fed does give us a slowdown you don't want to be in that one. you want to be in others andy in new york >> caller: hey, jim, booyah to you. andy from -- upstate new york. >> beautiful. >> caller: my question is on brunswick corporation.
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as you as the boston whaler owners, you understand the business -- >> well people have given up on this one they figure in a recession, it won't work i don't think that is going to be the case. i think dave folks is going to pull it off and the stock is a buy at eight times earnings but i'm really straightforward here, the market doesn't likethis stock. and doesn't think it will come back and i'm trying to disagree with the market. because i think it is such a good company to steve in oregon >> booyah, jim what do you think about regent bank. >> very smart bank you look at first horizon and the stock did nothing and then they got a bid this is a terrific company believe me, it won't fade forever if it stays at this price. it is way too good to miles in florida. miles? >> caller: evening, jim, thank you for taking my call. >> of course. >> caller: my stock for is you
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is astrazeneca i've been keeping an eye on it it had a good move this past month but it appears to be gaining momentum to go higher so i wanted your opinion on that. >> i can't chase it up here. i think it is gotten more expensive versus other very good drug companies so i would say that you should fake a pass on that and that, ladies and gentlemen, is the conclusion of "the lightning round. >> announcer: "the lightning round" is sponsored by td ameritrade coming up, he's no pollyanna punching in the wind cramer has a thesis on why it will pay to stay positive in these perilous times, next
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it's a thirteen-hour flight, that's not a weekend trip. fifteen minutes until we board. oh yeah, we gotta take off. you downloaded the td ameritrade mobile app so you can quickly check the markets? yeah, actually i'm taking one last look at my dashboard before we board. excellent. and you have thinkorswim mobile- -so i can finish analyzing the risk on this position. you two are all set. have a great flight. thanks. we'll see ya. ah, they're getting so smart. choose the app that fits your investing style. ♪♪ what if you could have the perspective to see more? at morgan stanley, a global collective of thought leaders offers investors a broader view. ♪♪
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we see companies protecting the bottom line by putting people first. we see a bright future, still hungry for the ingenuity of those ready for the next challenge. today, we are translating decades of experience into strategies for the road ahead. we are morgan stanley.
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i never wanted to be the gloom buster in chief. but somebody has to got to do it i'm on conference call after conference call trying to understand why everybody is negative and it is critical clear, the analysts believe that we'll be in a recession at this point next year. they listen to the fed as it gets tougher and tougher in november, jay powell -- and from that perspective the situation is quite different the conventional wisdom said small businesses are getting crushed, it is worse as the fed hits the brakes in the economy i saw that in the restaurants that i used to run but the ceo of paychex said more companies are opening more than ever and he's a straight shooter. and then the head of bank of america who said the same thing, small business are doing terrific i bet we'll hear again and even more resoundingly from american
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express when they report on friday how do i know this because we talked to the ceo and he made a great case for am ex's growth and you could argue that is all backward if we get hit with a recession, everything is going to fall apart. i come back and say these companies should prepare for the worst if there is really a recession, they'll be ready. go over what bryan moynihan has been saying. now it is $7,400 the average person with 3250 is now at -- [ inaudible ] that is why all of the planes are jammed and you can't get a reservation and leisure is doing so fabulous including disney theme parks by the way. so here is the thesis. i'm going with this. because small business, the engine of our economy is flush and because individual consumers have all of that dry powder, even if we get a recession, it
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is a mild one that will not crush the stocks of our grea companies that we talk about all of the time. now this again brings me back to 1994 when we got bombarded with aggressive rate hikes to investors fled from stocks in droves actually, these people missed one of the greatest bull markets in history, the fact that we were stronger than we realized in 1994, i bet the same could happen this moment that is exactly the time when sentiment is as negative as it is now before you dismiss me of some pollyanna, i will warn you when we are heading for recession that is what i did in 2007 when i ran like a crazy man and when the federal reserve saw the worst slowdown since the great depression and it is in the fed minutes, they laughed at me. i keep them here and take a look at them to remind hoich they laughed at me back in 2007, consumers were overextended. we don't have that problem right now.
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the consumer balance sheet has never been better that is why i think we can afford to be bullish in the face of this relentless pessimism and it is why i'm taking the other side of the gloom trade. i like to say there is always a bull market somewhere and i promise to find it just for you right here on mad money. i'm jim cramer and i'll see you tomorrow the news with shepard smith starts now and the doj that mandates on planes should come back. i'm shepard smith. this is the news on cnbc >> putin tests a nuclear capable missile and issues a new warning. tonight, the pond gone's response. netflix stock craters down 35%. the worst day in 25 years. >> not monetized 5 million viewers. what are they thinking >> what the turmoil means for the future of

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