Mad Money w/ Jim Cramer 02/03/25
44:26 Share

When you're with Amex Business Platinum, you have the card that works as hard as you do with a flexible spending limit that adapts with your business. That's the powerful backing of American Express. Not all purchases will be approved. Terms apply. Learn more at americanexpress.com slash amexbusiness. New job? Growing family? Need a change of scenery? When life gives you a reason to move, start with Opendoor. Request a cash offer in minutes.

No prep work or showings needed. Or list with us and test the market with the cash offer to fall back on. You choose. Sell your way at opendoor.com. That's opendoor.com. Terms and conditions apply. Opendoor Brokerage LLC and Opendoor Brokerage in California DRE 020-61130.

My mission is simple, to make you money. I'm here to level the playing field for all investors. There's always a bone working somewhere, and I promise to help you find it. Mad Money starts now.

Hey, I'm Kramer. Welcome to Mad Money. Welcome to Kramerica. My friends, I'm just trying to make you a little money. My job is not just to teach you, but to entertain you. So call me at 1-800-743-CBC or tweet me, Jim Kramer. Just because there's a flurry of business announcements by President Trump does not mean the sky is falling. Especially when he's doing exactly what he told you he was going to do, putting tariffs on Mexico, Canada and China.

Yet that's all I heard last night and this morning, where once again, we heard that the world was ending with the market looking like it was about to fall apart, only to rebound when we got an amenable statement from the president of Mexico, Claudia Chama. Suddenly went from down about 2% to the Dow finishing just off 123 points. It was positive at one point. S&P dropping 0.76%. Now it's not losing 1.2%, but it was the worst last night. Looks like the end of the world, though. Fintechar.

Now, I want to take a moment here to talk about panic. I think many investors had a panic attack last night because President Trump quickly announced these tariffs. 25 percent on Mexico, 20 percent on Canada, except for oil, which is 10 percent and 10 percent on China. Now, these moves were shocking to many people, which is insane to me.

candidate Trump said that he would take that. He said he told you again and again that he's going to take these actions against these countries. So how the heck do you commit yourself that he won't do it?

There was one part of this that was surprising in a good way. I figured China would get the highest tariffs and Canada would get the lowest. Given that Canada's a terrific ally, the 25% duty on the goods seemed pretty radical, especially since it's not like we have a big fentanyl or migration crisis on the Canadian border, do we? Plus, they seem relatively innocent as far as trade policy goes. But President Trump said over and over again that Canada was taking advantage of us.

So they got hit. By the way, the 10% break we got with Canadian oil was a serious concession because they send us 4 million barrels a day and there's no place to store it if we stop taking delivery. Canada was surprised and didn't have much of a plan except to hit us with their tariffs of their own. I don't blame them for being somewhat blindsided. I know that Prime Minister Trudeau got a stay of tariff execution after the close. One month could bode well for tomorrow.

But there was a way to change the narrative with our president. You just had to be more like Claudia Scheinbaum, the president of Mexico. Scheinbaum, she was ready. She knew that Trump was going to change the rules. She knew he had the upper hand. She understood his goals: stop illegal immigration, stop the fentanyl. She knew that that was in her interest, too. What was not in her interest was a trade war. Scheinbaum didn't want to throw her country into recession.

Just because Trump was doing what he threatened to do. The market was hideous until Trump gave her the 30-day pause after she committed 10,000 Mexican National Guard troops to the border to stop the immigration, fentanyl, and also automatic weapons. Look, I have no idea if President Trump was surprised. Maybe he had planned it. I don't know. But I do know this. He can already claim a victory. He can say that he got Mexico to do what he wanted Mexico to do. He gave them a path and they took it.

Last night, it felt like most investors believed that every leader would respond in kind. China had a little bluster, but it seemed that they understood they got off easy. I think the Chinese will see the 10 percent number go higher if they're recalcitrant.

To me, this one's obvious. The president told me there could be some good news with China when I interviewed him on the floor of the exchange after the election. I have no idea why he went so easy on the Chinese, but it's possible that he might want to try to extend an olive branch to China, at least a star. If he had started 25 percent, he wouldn't have much room to navigate, would he? What would he do? Now, though, he's got plenty of room, plenty of room. And China's nose is getting a pretty good deal. I think they should do something, maybe take it.

Oh, and a lot of people were bummed that Trump moved on tariffs first. He also didn't tell us that Elon Musk would start some real doze work, creating havoc by taking action to save taxpayer money, even if most of these savings were probably unconstitutional. Again, why do people not believe Musk? Does he impress you with someone who doesn't care, who's moved on? Again, if you didn't believe the president's campaign rhetoric, you were indeed shocked. If you did believe, then there was nothing surprising here at all.

Now, there's some real crazy stuff that happened today. If you offered a value meal, your stock went up higher. Brinker, Darden, Dutch Bro, McDonald's, Starbucks, they all moved higher. Hey, even Chipotle, which had a real avocado problem, did quite well today, and they're about to report their quarter tomorrow. Wow. This group made no sense to me at all. Towers can make dinners more expensive, but the market was indifferent because they're domestic operations. How about Costco? They got a big tomato field near me in Mexico. Walmart, they both really rallied, even as they do sell a lot of Mexican vegetables.

Less crazy? Health care. Easy. Many of them report this week, and they're down pretty hard from their highs. What an easy group to buy. Safety stocks if tariff caused a recession. Medical devices rallied big. IDEXX Labs, the vet supplier, reported an amazing quarter, and it roared.

We got some furious action, old-fashioned fintech, too, MasterCard, Visa, and, of course, Palantir. Holy cow. I mean, there ain't no stopping Palantir now. It's on the move. I said it was going to go above 100, which is actually par in Wall Street parlance, and it sure did. Now, we had a lot of tech stocks trading down pretty hard in pre-market action.

But many rallied from the bottom as traders realized that the tariffs weren't so horrible for the group. Now, I don't want to say that we had some sort of clearing event today, that somehow we got a crescendo and a lot of techs and the sellers are finally done. Many of these stocks came back from a living. But Alphabet and Amazon report this week and they've got to be good. They also have to say that they're standing by Nvidia, Lockstock and Blackwell, their most expensive new chip.

In the afternoon, we heard about an off-the-cuff President Trump talking about a sovereign wealth fund. And after the bell, he signed one into law. I mean, talk about something you could move the tech stocks up. They've been in the doghouse lately. Anything's possible with this guy, although that was not a campaign promise. He said he might buy ByteDance, the Chinese owner of TikTok, which is in limbo. Who knows where that money is going to come from? Beats the heck out of me and probably everybody else. I think it's time for the people who hate President Trump.

or those who hate parts of his agenda to recognize something. They've got to recognize that most presidents try to follow through on their campaign promises, even if it might hurt the stock market. Trump's not focused on conventional inflation. He's not focused on the Fed and interest rates. He isn't even focused on the supermarket. He's focused on tariffs because he believes that's how he can make America great again. He's tariff man. You may think the tariffs don't make America great again. Hey, maybe you think they're terrible policy or that these blanket tariffs are downright insane.

It doesn't matter. You're not the president of the United States.

Believe me, Trump's not going to hold back on his agenda just because you think it's a bad idea. So here's the bottom line. Stop panicking when Trump does something you think is crazy. And remember that he promised to do most of this stuff before he was elected. He still won. Many say this is a precarious moment. I heard that again and again. I simply say you got what your country voted for. Whether you like it or not, it really doesn't matter. So get used to the turmoil. You don't have to enjoy it. Remember that in the end, the president sure does.

Let's go to Scott in Tennessee. Scott. Hey, Jim. Huge, huge fan of the show. Thank you, Scott. Thank you. Go, Bert. Yeah. Yeah, I was calling you. I was interested in what your thoughts are on Oracle. I've been acquiring, you know, shares over time. Right. And it's been kind of flat for the last five months or so. So I was wondering what your thoughts are on it.

Well, I mean, Oracle had this gigantic move. I mean, just huge. And everyone thought that it was just terrific. And then what happened, frankly, is that we got all the great news and now we're waiting for more great news. And I don't see any more great news. I think you have to wait until they report. And when they report, they're going to have to have something really special. But it's not till March 11th. I think we'll be biding time in the stock for now. I want to go to Bill in Massachusetts. Bill.

Jim, I just wanted to say thank you for your honesty and your integrity when it comes to the stock market. I really do enjoy it. Thank you. You got to put yourself out there and say the good with the bad. And I say a lot of bad. I say a lot of things I made a mistake on. I think that's what makes me authentic. How can I help you?

As a club member, I recently sold some of my tech and I invested into BlackRock and Goldman Sachs. Today, I did add to my BlackRock and I'm wondering, should I add more to Goldman Sachs? I really do like it.

I think Goldman is incredible. The stock sells at 13 times earnings. It's doing amazingly well. I think it is a solid buy. I saw it down at one point today. So low. 622 was terrific. BlackRock might be down because Vanguard cut its fees. I trust Larry Fink. I think it's a great opportunity to buy. And you saw it because you're a club member that we picked at some today. And thank you for being a member of the club. Let's go to Joe in New Jersey. Joe.

Hello, Mr. Kramer. Thank you for taking my call. Always, Joe. Great to have you on the show and thank you for calling in. It's like you're being consistent. How can I help you? On my way to work, about a mile and a half away from my house, I've been watching this beautiful warehouse go up.

About a year or so later, it's up and it's called Vertiv. I never heard of it. I look it up and it manufactures digital infrastructure for data centers. Do I buy this company? This is Ford. This is Ford of Forty for Ford of.

Vertive or Vertive? OK, look, Vertive, you need to know that the chairman of Vertive is Dave Cody. He was my former next door neighbor. He's a brilliant industrialist. The stock is down very big. It's involved with data centers. Indeed, it's actually a data center play. And I think the stock has come down enough that I think you should buy some. But Joe, not all, not all and not all at once. This is a wild trader. And if it's a wild trader, you don't need to stick your neck out.

All right, look, it's just not worth selling and saying the sky is falling every time Trump does something that you think is crazy. Remember, most of these things are things that he promised. So get used to the turmoil or get out.

We're officially one month into 2025. I'm outlining the S&P 500 stocks that stood out and sank in the market's January action. Plus, the company behind Oats and Hoka posted a hideous decline after a report last week. I'm going to tell you if I think Decker is a buy or a sell at these levels. And later, I'm getting a read on how President Trump's tariffs might shake up supply chains in my off-the-tape exclusive with Flexport. So stay with Kramer.

Don't miss a second of Mad Money. Follow at Jim Kramer on X. Have a question? Tweet Kramer. Hashtag Mad Mentions. Send Jim an email to madmoneyatcnbc.com or give us a call at 1-800-743-CNBC. Miss something? Head to madmoney.cnbc.com.

Open-source AI is available to all, not just the few. Meta's open-source is free to use, enabling models like Metatron to innovate. Here's Yale professor Dr. Annie Hartley. Using Meta's open-source AI Lama, we built an AI tool that allows clinicians from around the world to collaborate, helping us deliver accurate medical information in the right place at the right time. Learn how others are building with Meta's free open-source AI at ai.meta.com slash open.

We all have our own ways of getting business done. Are you an early bird powering through emails before the sun rises? Or perhaps a night owl strategizing and planning long after the office lights dim? However you run things, Atlantic Union Bank can keep up. No matter your business size or industry, you deserve a banker committed to your success. Call, visit us online, or drop by an Atlantic Union Bank branch to learn more.

Atlantic Union Bank. Any way you bank. Is it time to reimagine your future? The right business skills may make a difference in your career. At Capella University, we offer a relevant education that's designed to focus on what you need to know in the business world.

We'll teach professional skills to help you pursue your goals, like business management, strategic planning, and effective communication. And you can apply these skills right away. A different future is closer than you think with Capella University. Learn more at capella.edu. Now that we're a month into 2025 and the market's already reacting to President Trump's agenda, it's worth looking at what's been working and what hasn't been.

JV was kind of an overall solid month for stocks, although some of the biggest winners have now pulled back substantially from their highs. When you look at the five best performers in the S&P 500, let's see what you get. Constellation Energy is first, and Vistra is fourth. Those are both nuclear power plays. Then there's CVS Health in second, GE Aerospace in third, and FF.

Five and fifth, when you look at Constellation Investors, look, these nuclear stocks have had explosive multi-year moves as the data center built has created this electricity shortage around the whole country. And nuclear remains the preferred power source for any company that cares about climate change. Now, we've got some huge data center announcements from Microsoft and Meta last month. Then Oracle, SoftBank and OpenAI teamed up to form something called Stargate with a $500 billion AI infrastructure plan that was announced at the White House last

on President Trump's first full day in office. In response, stocks like Constellation and Vistra soared, but then deep-seek happened, and Wall Street's now trying to figure out if the tech titans have been spending way too much money on AI hardware. Both Constellation and Vistra got obliterated in response, although they've now rebounded pretty substantially from the lows. And again, they still finished January up big.

I've seen some analysis suggest that DeepSeq has been downplaying its real costs. But until we get more clarity, I don't want to stick my neck out from nuclear stocks because these only work when the data center story is ironclad. Now, I do know that Scott Strasek from GE Vrnova, which builds nuclear power plants, is getting more bullish about the near-term possibility of orders. But even under the best of circumstances, these things take years to construct.

The second best S&P 500 stock in January is frankly pretty shocking. It's CVS Health, up 25.8% last month. Now, CVS and chief rival Walgreens have both been spiraling in the post-pandemic year. Last year was no exception. CVS in particular, they fired CEO Karen Lynch, and its stock finished 2024 down more than 43%. So maybe you could argue it was due for a bounce. But the odd thing about CVS's January rally is the fact that there really is no clear catalyst for it.

Now, there was plenty of news involving Walgreens last month, very little but good. But it looks like CVS mostly rallied in response to an announcement from the Centers for Medicare and Medicaid Services, which said early last month that payments from the government to Medicare Advantage plans are expected to increase by over 4 percent from 2025 to 2026. But I'm going to need to see more legitimate good news from CVS before I believe in any term. The company reports next Wednesday. Let's see what they have to say before chasing the January rally.

Third best performer in January was GE Aerospace. Yes, the part they left over after they spun off healthcare and power businesses. Now, GE Aerospace finished January up 22% the old-fashioned way. A true blowout earnings report. It's delivered on January 23rd. Not only did the company smash expectations for the quarter, management also issued strong earnings and cash flow guidance for 2025. They raised dividend by 30% and announced a new $7 billion buyback plan. What's not to like?

GE is another stock with huge gains in recent years, but it's a huge run has been supported all the way by steadily improving numbers. So I think it has more staying power. I remain firmly bullish on GE Aerospace under the leadership of this remarkable turnaround artist, chairman and CEO Larry Cole. I really like him.

I mentioned number four, Vistra, already. So why don't we wrap things up with the fifth biggest gainer? It's called F5. It has nothing to do with Formula One or anything like that. This was up 18.2% in January. This tech company, Formula One knows F5 Networks, specializes in application security and delivery solutions. Oh, boy, this is the kind of thing that everybody's crazy about. It's a story I really should have covered much more often because it has been a strong performer literally for decades from when I was a hedge fund manager.

Stock had already been rising steadily through January, but then gapped up last week after the company reported an excellent quarter. Not only did F5 handily beat sales and earnings expectations, but the company also raised its full year forecast substantially. While the guidance for the current quarter was not as strong, F5 got a pass. The stock's humming deserves every point of this move and more. Hey,

Hey, by the way, let's have an honorable mention for Travel Trust holding Starbucks. That was six in the S&P 500 last month. It gained 18 percent primarily because of a big move last Wednesday after the company reported a better than feared quarter with positive commentary from new CEO Brian Nicol, formerly of Chipotle. While the stock moved a lot since Nicol was announced as its new CEO last August, I'd still much rather bet with him than bet against him even up here. Those are the winners.

How about the biggest losers? Two biggest decliners are both California utilities because of the wildfires in Southern California. The biggest loser, Edison International, was down 32.4 percent in January. This is the parent company of Southern California Edison, which services the areas that were actually impacted by the fires.

But the second biggest decliner is very intriguing. It's PG&E. That's down 22.4% last month. Now, that seems to be just guilt by association. Patty Poppy told us that. She's the CEO. It doesn't even operate in Southern California. I think it's worth buying after last month's weakness. Yes, it's dirt cheap. Buy

The third worst name is a tough one for me. It's Constellation Brands, SDZ, down 18.2 percent. As a purveyor of Mexican beer brands, Modelo, Corona and Pacifico, this stock was already under pressure after the election. And then the bottom fell out after they reported a bad quarter early in the month. Now, we spoke to Constellation CEO Bill Newlands that night and came away pretty disappointed with what I felt was a lack of urgency about fixing the company's problems.

It almost feels like they're in denial. Where do I come down on this one? Well, with the arrival of tariffs this past week, the Chapel Trust sold half its position constellation today. Enough. Even with the pause of the Mexican tariffs announced this morning, this position has just become way too hard to own. Liquor is a tough thing to own in this market.

The fourth worst performer in the S&P last month was On Semiconductor. That was down 17%. This chipmaker is a leading supplier for the auto industry, and though it doesn't report until next week, the stock got hit after Texas Instruments reported last Monday and gave a door outlook for the automotive and industrial end markets. The semiconductor cohort is all over the place, though the ones selling into the AI theme are still doing pretty well. But anything single like Texas Instruments or On Semiconductor has had a real tough go.

Finally, the fifth worst stock in the S&P 500 in January was Electronic Arts, EA.

The video game publisher with a stock down 16 percent last month. Now, simple, simple story. Last month, EA preannounced shockingly light numbers for its latest quarter. Thanks primarily to significant underperformance for some of the company's biggest titles. Their soccer business now looks to be a shambles. A couple of years ago, EA took a gamble by forging forward with its previously lucrative franchise, despite losing the license to use the name of soccer's top global governing body. That gamble has not paid off for a small.

But it is tough to see how EA tells a better story. Bottom line, pretty disparate group of winners and losers at VSME. Very different from 2024. So why don't we see how things play out for the rest of the year? Mad Money is back after the break. Coming up, is now the right time to try Decker's Outdoor on for size? Or should investors run for the hills? Kramer sharing where he comes down next.

Meta's open source AI, available to all, not just the few. Here's Brandon Mitchell, CEO of RightSea. We use Lama, Meta's free open source AI model, to build an AI tool that helps people get their dream job. Learn more at ai.meta.com slash open. Is it time to reimagine your future?

Thank you.

What the heck just happened to the stock of Decker's Brands? That's a parent company of the UGG brand and Hoka, one of the fastest growing sneaker brands in the world. Going into earnings last Thursday, Decker's had rallied more than 70% over the previous year, primarily thanks to the strength of Hoka. But after the company reported its stock plummeted on Friday, oh boy.

Losing more than a fifth of its value in a single session. And it fell another 3.8% today. Now, everyone likes to talk a big game about how they'd immediately buy more of their favorite stock if they ever see a big decline, right? But when the time comes, people are a little screamish. Uh,

asking themselves, what do the people selling Decker's down 20% know that I don't? And that's why it's important to take a step back and do some research before you decide on the next move. Which brings me back to my initial question. What the heck did happen to Decker's? Now, at first glance, this actually seemed like a pretty darn good report.

They reported quarter was actually the largest, most profitable in company history, higher than expected sales, all time high gross margins and a 42 point 42 cent earnings beat 42 off of a $2.58 basis. Their most important brands that did great. Ugg sales surged 16 percent fueled by strong holiday men. Hoka was up 24 percent, proving the running shoe brand still has legs. So then what went wrong?

Simple. Management gave a disappointing forecast for the current quarter. Talking about roughly 1% revenue growth, most of them was looking for 11%. They expect UGG sales to decline double digits and their earnings to be down nearly 50% year over year. The House of Pay.

Their gross margins also expect to contract from 325 to 350 basis points thanks to higher freight costs and promotions as they're lapping unusually low levels from a year ago. Now, this was a brutal reality check for investors who expected the strong momentum to continue unchecked. I know. Every time I looked, the scene was going up. Decker's essentially told the market, quote, we just had a great quarter, but don't expect that to continue, end quote. That's massive buzzkill for a stock that was already priced for perfection.

Why the soft guidance? Largely because while Uggs had an incredible quarter, that strength came at a cost. Demand was so strong over the holiday season that the company sold through too much inventory, leaving them sold out of key styles going into the next quarter. Now, to be clear, this is a high-quality problem, right, because demand is still strong. But they don't have enough inventory to take advantage of it this quarter.

Unfortunately, Wall Street hates sequential revenue declines, especially for high-flying brands, even if it's just because of timing. They're not going to look through it. Worse, Decker's guidance implies that Hoka's growth is slowing, a serious problem, because so many people own this stock precisely because of Hoka, which has been an incredible growth engine. Now,

Also, while Hoka sales grew 24% in the quarter they just reported, which is pretty good at face value, that was only in line with expectations. When 24% growth can be seen as almost a disappointment, maybe the expectations got too high. And for the current quarter, management implied that Hoka might only grow in the low double digits, not exactly like hitting a brick wall. But,

When you're used to much higher growth, decelerating to the low double digits might cause some real turbulence. Sell, sell, sell.

Yeah, you got it. In short, investors are worried that HOKA might be peaking. Again, this is Decker's key growth driver. If it slows down dramatically, the whole thesis falls apart. We've seen plenty of sneaker businesses crash and burn over the years. Now, before the report, Decker's was trading at over 34 times forward earnings, which is a big premium for a footwear company. You know, it's even more expensive than NVIDIA. And while the world may run on HOKA, the AI revolution does not.

Fast forward to today, and after the sell-off, and Decker's now sells for under 27 times for its earnings, there's a simple reason for this. Wall Street doesn't tolerate high valuations if the growth rate is slowing down. Decker's was indeed priced for perfection. And when management didn't deliver perfection, didn't deliver a flaw of support, the stock, it just got torched. All right, so is it a golden opportunity to buy, or is it a sign of a more disappointment? It's gone. Despite all the fear that a sell-off generates...

It's important to take your emotions out of the equation to see whether it's worth buying the stock now. I think I'll have a few reasons to believe that this pullback is overdone. For starters, management here is notoriously conservative. They love to under-promise and over-deliver. Additionally, demand for rugs is still strong. They just don't have enough merchandise. Once management restocks their inventory, unless everybody bought something else, sales should normalize.

Despite the worries about a potential slowdown in Hoka management, there's several big launches coming up that should continue to invigorate the brand. These new shoes include the Body 9, the Clifton 10, and new trail running models that should keep the brand growing.

Regular viewers of this show know that we love to read that biannual Piper teen survey that does a great job of giving us insight into what younger people are buying. I love that thing. Where Decker's is a consistent winner with both UGG and HOKA. On the conference call, Decker's mentioned that HOKA was the second most worn brand at the high school cross-country national championships. Now, that's a good sign. Imagine it also has a massive cash pile. I really like this aspect.

Deckers has $2.2 billion in cash. It has zero debt. And that's got a lot of flexibility, meaning they can focus on the long-term growth of the brands without having to choose short-term sales. As they explain in the conference, what I'm quoting here, we don't want to be in a position to have to trade brand equity for short-term revenue, end quote. But honestly, the best argument for Deckers is that the stock's a heck of a lot cheaper than it was last Thursday, especially with today's additional 4% decline.

Of course, there's also plenty of reason to stay away and stay cautious. Stocks don't go down 20 percent for no reason in a single day. Now, we know the current quarter will be rough and investors won't want to touch the stock until they see improvement. Hocus slowing growth is a real risk. If it drops below the expected 20 percent growth rate next fiscal year, I think the stock could still keep falling.

As for the tariff news that came over this weekend, which is what Stecker sent down another 3% today, this isn't actually much of a concern to me. While the company makes a lot of products in Vietnam as well as China, their business outside the U.S. has been growing at a faster rate anyway. So the lower relative sales domestically are already priced in to some extent. So here's where I come down.

If you're a trader, stocks that fall more than 20% on earnings usually do not bounce back overnight. If you're short-term focused, you might want to wait for a clear bottom before jumping in. We don't know just how conservative management's being for the fourth quarter or what their forecast for the next fiscal year will be. Decker's is still an elite company, but sentiment took a real hit here, and it might take a little time to recover.

But the bottom line, for the longer-term investors, I actually think this is a solid buying opportunity. Decker's is a high-quality business with strong brands, a great balance sheet, and the wherewithal to not chase short-term revenue at the expense of its brands. This dip could be the best chance to get in at a discount, but there will always be people who will be disappointed all over again. Meow!

if the numbers don't improve the next time Decker supports. So you can afford to take your time before you buy. I'm going to go to Sam, my old homestead in Pennsylvania. Sam. Sam, how are you? I'm doing okay. How about you, Sam?

I'm good. You know, Jim, I know the market was upset today about the prospect of tariffs, but one of the companies that I think is strong enough to withhold some of these tariffs is On Holdings. The company that I called about one year ago to the date, called when it was at 27, looking at 58. I think it's a great buy here long term. What do you think?

Okay, I think on is a great buy. I think it's got the momentum. But understand, when you say longer term, I get a little nervous because sneakers, unless, you know, look what happened, even Nike longer term. I think on is a hot sneaker. I think it's going to stay hot for another year, and then we have to revisit. But I think you've got upside on every single pullback on on. Dan in Pennsylvania. Dan. Booyah, Tamer. Booyah. Calling from Washington, PA. Go Birds. Go Eagles. What's happening?

You introduced me to this stock in 23 and it has earnings this Thursday. So it's in a quiet period. It's down 30 percent in three weeks on heavy volume with no news. It might be about Chinese tariffs. The stock is health. Yeah, well, it's going to report. I do think that the Chinese news, they make this stuff in China is real bad.

And it's going to hurt the profit margin. We got to hear what they're going to have to say. I have to tell you, I'm very uncomfortable buying something that is all sourced in China, given the fact that we don't know what the president is going to do if China doesn't play ball. All right. I think just dipping Decker's outdoors to solve buying opportunity for long term investors. It could be a chance to buy some of a really good stock that's on sale. Much more mad money, including my exclusive look at the trade landscape with supply chain logistics company Flexport. They know it all.

And where do American companies doing business in Mexico stand after today's back and forth on tariff? Don't miss my take and all your calls rapid fire in today's edition of the lightning round. So stay with Kramer. Today we came in terrified.

by President Trump's new tariffs on goods from Canada, Mexico, and China. Although the market bounced back when we learned that the Mexican tariffs would be delayed for a month, I'm surprised so many people were surprised by this, given that Trump talked about it a lot on the campaign show. Still, now the tariffs have arrived and companies need to cope with them, especially companies with international supply chains.

Which brings me to Flexport. It's a leader in global supply chain technology. Helps companies do a better job of managing their logistics. We got to know what kind of conversations are having with our customers and how they plan to handle these new import duties. So let's check in with Ryan Peterson. He's the founder and CEO of Flexport. Get a better sense of what the heck is going on. Mr. Peterson, welcome back to Mad Money.

Booyah, Jim. Thanks for having me back. All right. Thank you. All right. So what have the conversations been like with your clients who do business in China and Mexico and Canada? Each one. Tell me, because it's got to be crazy.

Yeah, it's a little bit crazy. It's day to day. I mean, I tried to take one day off this weekend. And next thing you know, I'm getting 40 texts from my team saying, did you see this new executive order and that one? So we're trying to be really communicating very clearly with our customers about everything we know. But it's kind of that balance of how much is over communicating is communicating, because sometimes you're waiting for more official policy to be issued than just a White House statement, for example. Well, you've got to break it with Mexico.

But tell me what would have happened if they had done them immediately. Would a trucker be invoiced? Would they not let them in? I mean, what's the actual physical process?

Yeah, you know, the way that we think it works is that you basically have this cutoff date. And they said that it would have been tomorrow. And it's have the goods been loaded at that point in time. And then you have to make a case. They might charge you duties and you can make an appeal effectively saying that, no, in fact, the goods were. This is for Ocean Freight. If it's a truck, it's got to clear the border, of course. But for Ocean Freight, if it's already on board, you can make that claim that, hey, your goods were already loaded. Well, I mean, to me.

there would be pure chaos. I mean, everyone is overtaxed. No one's ready for it. I mean, wouldn't there just be lines around the whole globe because of this? Yeah, the implementation timeline was...

pretty unprecedented. You know, in the 301 tariffs that Trump did in his prior administration, they gave us at least a month's notice to put things in. It's also for CBP themselves to go and implement these things. It takes them some time. So we weren't really surprised when Mexico got extended. We'll see what happens with Canada, though. There hasn't been an agreement yet today. Now, Ryan, did you tell people, look, you've got to get in ahead of this. If you have any spare capacity, warehouses in America,

You've got to ship the stuff now unless it's perishable. And did people listen to you? Yeah, we've seen a lot of that, especially in China. China has been long foreseen that there would be sort of escalating duties on the imports from China. And we have seen that in our customer base, that people have been importing much more, trying to pull goods in. We had a 10 percent increase on duties from China. That's on top of all additional duties that was issued this week. But really, the real review is on April 1st.

That's when the Treasury secretary is required to give a report to the president advising next steps on Chinese trade and a whole range of policies. And, you know, I would expect the duties will continue to go up. So, yep, if brands can, they're likely trying to import those goods ahead of time. OK, so could you explain to me the de minimis stuff? I see a lot of stuff from Shein and Temu, and it seems like they were getting a real break. It looks like there's no more break for them. Is that what's happening?

Yeah, effectively. So de minimis means if the goods are less than $800 and they're directly consigned to the final consumer, that's you and me, if it's less than $800 per day, per transaction, per customer, then there's no duty owed. Regardless of what the duty rate is, there's no duty owed. So with this latest executive order, they shut down the de minimis program for goods that are made in China, for goods that are made in Mexico, and made in Canada. Now, this is a very big

There's a very big change. Some people call it a loophole. It's a statute passed by the government. I don't really call it a loophole, but whatever you want to call it, it's very big. A lot of companies use this. You mentioned Timu and Shane, but of the top 100 Shopify brands that sell e-commerce direct-to-consumer brands,

30 of the top 100 are also importing in this fashion. What they'll do often is put the goods in Mexico or in Canada and then ship them one at a time so they don't have to pay for air freight. They'll ship them one at a time from a fulfillment center in Tijuana.

That has been postponed. If it's coming from China, you can no longer do that. If it's made in another country, say Vietnam, that has not yet been shut down. So we're going to monitor that very closely and see if they close that. How about the unfortunate people who moved their business from China to New Mexico thinking they were reshoring? Have they just kind of gone from bad to worse at this point?

It has. And Mexico, you know, actually, we haven't really talked about it here, but back in December, right before Christmas, the Mexican government actually made a huge change to their import policy with zero days notice, just announced it the day before Christmas. And it sent all kinds of brands into a tailspin trying to move their fulfillment. In fact, Flexport offers e-commerce fulfillment services here in the U.S.,

We doubled the size of our business already. We hit our annual goal in January because so many companies had to move their fulfillment operations back from Mexico into the U.S. So, yeah, it's been a crazy time in the logistics world. Okay, so how is Flexport doing? I haven't talked to you in a long time.

Well, you know, we're doing great, but our customers are really trying to stay on top of all these changes. And so it's a really interesting time. I think the more complicated global trade becomes, the more valuable our services is. Our job is to make things simple. We want to make international trade as simple as flipping a light switch and

So the more regulations that come out that make that harder, the more important our work is. And so we're having a great time working with customers and trying to solve for these complexities. Do you think today was a bit of an overreaction, both with the customers and with the stock market?

In general, I'm not a stock market investor. I don't know how to weigh in on that stuff. But I think the long march of history says that human beings want to do trade with each other. Governments may put up tariffs. They may take down tariffs. But if you look at 800 years of history, back to the Mongol invasions, global trade has grown 4% on average. So I just expect that if you look in 50 years from now, there's going to be way more trade than there is today. And I don't pay attention on the day-to-day changes. In the end, who gets hurt?

Yeah, I mean, at the end of the day, businesses that don't like complexity, they want to have some certainty about what's going to happen. It's very hard to plan a supply chain when it's changing day to day. And so I think it's really hard for these businesses to figure out, you know,

you know, what is the government going to do and how should they set themselves up? Possible that this will lead to higher prices for consumer goods, but there's all kinds of other variables that may lower taxes or may create a simpler regulatory framework that might increase demand. I mean, we're going to see the price of air freight come down a lot if Sheen and Timu can no longer do the same amount of volume.

We're going to see, we've seen the Houthis back off a little bit here, probably out of fear of what Trump administration may do, but they were, all the container ships in the world have not been able to go through the Red Sea for over a year.

that we're starting to hear rumors and talk that maybe the container ships will start going through the Red Sea again. That would really bring down the price of ocean freight. So it's hard to operate in a really simple black and white world when global trade is this complex. Well, we know that it can be navigated by you because this is your world. And I really appreciate you spending the time with us. I know you're a very busy man, but I want to thank Ryan Peterson, founder and CEO of Flexport. I love having you on the show. Thank you so much. My pleasure. Bad Bunny's back after the break.

Coming up, Kramer takes your calls. And the sky's the limit. It's a fast-fire lightning round. Next. It is time. It's time for the lightning round. I'm going to start with James in Connecticut. James.

Hi, Jim. Thanks for taking my call. I'm a club member. And I was a club member of your other club. My question is about Emerson Electric.

Okay, Emerson. Emerson, I got out too soon. I was worried that they did a hostile takeover. I don't like hostile takeovers. It was a mistake by me. I should have felt, you know, something these guys are going to pull it off. My bad. Lost. Missed out on 20 points. Very bad. Let's go to Ryan in Ohio. Ryan. Hey, Jimbo. Good luck to your Eagles this weekend, brother. Oh, thank you, buddy. I appreciate that. What's up? I found a stock that I usually watch the –

Either the financials or the indicators. And I found one that's just getting ready to cross the 50 and 200 day. What are your thoughts on 5.9? Customer relations management. They do a very, very good stock. Stock is way too cheap. I think I am with you. And I would pull the trigger. Let's go to Russ in Texas. Russ. Jim, it's great to speak to you. Shane, what's going on?

Long time viewer, first time caller, love the show. Thank you. This stock has a great pipeline of military and public sector contracts. It's up 160% for the year, but I've also read there's a good amount of short interest as well.

It's considered a baby brother of Palantir, who had a great earnings call today, but I think it's actually the Big Bear brother. I want to know your thoughts on Big Bear AI. No, you've got to go with Palantir. Palantir is not done. This guy is amazing, Karp. I mean, I can't say enough good about them other than the fact that everybody else is saying good, so you don't really need me. That's the one to be in. Sue in Minnesota. Sue. Hi, Jim. This is Sue from Minnesota. Excellent. What's going on?

And my question today is regarding Oshkosh Corp. They went up so significantly last Thursday, over 18%. Yeah, well, they blew away the numbers. I mean, I have to tell you, I was surprised at the numbers being that strong. I know that we had them on. I didn't see that coming. Another great American company that just shot the lights out that no one was paying attention to it. I need to go to John in Massachusetts. John.

Jim, cheers, cheers, happy Monday. How you doing, Jim? Wow, I like your attitude. You're bringing it today. I'm doing fine. How about you? I got to bring in the energy, Jim, but first off, I have to say I'm very, very sorry for you, the people of Philadelphia, with the recent news. I'll just leave that there. But, Jim, what are your thoughts on GameStop, and do you think K-Pod is proof that monkeys are men?

I tell you, if you want games, you've got to be in Take-Two because Take-Two is going to have Grand Theft Auto, brand new edition this year. And that's the one to be in. I mean, you've got to have momentum. I mean, look at what happened with EA. Uh-uh. So I can't recommend GameStop. I just know it's a meme stock. But if you want a meme stock, of course, you just buy Palantir. I think everyone should just go buy Palantir. I mean, like Palantir. It's like, what can I say? Alex Karp, I think he'd find you if you didn't buy Palantir and give you a little talking to. Let's go to Mike in Connecticut. Mike. Mike.

Hey, Jim. Thanks for taking my call. And go Eagles 59. Wow. It's the America's team here. Absolutely. What's going on?

Okay.

And the stock itself has had trouble throughout the years, but it doesn't seem to want to go away. I wanted to know if you thought that the insider buying maybe falsely inflated the stock. What stock? There was an agreement between the container store completed on January 31st. Okay, and what is the store? The stock is BYOM.

Yeah, BYO, they're buying everything. Buy-Buy Baby, too. I guess it's Limones. Look, I actually like their style. I thought Container Store was poorly run. I thought Buy-Buy Baby was poorly run. Maybe you can make it better. And that, ladies and gentlemen, is the conclusion of the Lightning Round. The Lightning Round is sponsored by Charles Schwab.

My family does a lot of business in Mexico. My wife owns a mezcal company named Fosforo. It's sourced near Puebla, a huge city of 3.4 million people, fourth largest in the country. We took the president seriously when he campaigned on placing tariffs on Mexico. So we brought in a huge amount of products, 7,200 bottles, far more than we needed, and stuck them at a Texas warehouse. We knew what Trump ran on, so why the heck wouldn't we try to get ahead of it? Seems simple given that he did win the election.

What's amazing to me, though, is how few people truly took him seriously. While it's been delayed a month, the 25 percent tariffs real. And if executed, it's us, at least right on the bottom line. Real impediment to profitability. We weren't alone. I wasn't satisfied with the analysis that Bill Newland, the CEO of Constellation Brands, who told us that he didn't think the company would be hit with tariffs because you can't make Mexican beer in this case, Medela Corona, in the United States. I had no such illusions. But what I did

What I didn't count on was that newly elected Mexican president, Claudia Chimon, would call up 10,000 National Guard soldiers to try to interdict illegal immigration and to stop the flood of fentanyl in return for a one-month pause before the tariff hits. I think this opens the door for a change in trade policy, the one that's much more targeted.

Now, there's a heck of a lot smarter. That's much smarter than the tit for tat approach that China adopted. One that could possibly preserve a lot of commerce we have with Mexico, our biggest trading partner. We did eight or seven billion in business with this country in 2023. Trump could really sink them if they're not careful.

But there's no free lunch in this business. If Mexico slips into a recession because of the tariffs, then we can expect a surge in illegal immigration no matter what. The border is too big for 10,000 soldiers on their side, a wall, and as many soldiers and ICE officials, officers to police. It's not going to work. However, Scheinbaum said that she had a good 30-minute conversation with respect and that, quote, it's about collaboration and coordination without losing sovereignty, end quote. I like

that. For example, she said she was concerned about the smuggling of automatic weapons, too, and that President Trump agreed to help her stop it. I think Trump knows that trade with Mexico isn't tomatoes or guacamole or building materials or even the intertwined nature of the auto business. He knows that if you hurt all these businesses, you can hurt the Mexican economy and knock into recession. If that happens, then there'll be many more immigrants, much crazy immigration. That's the wild card. And neither president wants that to happen. Now, if we step back for a second, it's worth thinking about China bomb's courage.

A new president could have been confrontational, oppositional. Instead, she came to the table in a collaborative way. I know that a month from now, everything could change. It's true that Mexico has a $162 billion trade deficit with the United States. But it's also true that the president ran on stopping illegal immigration and fentanyl smuggling. And now he already has a win.

the president of Mexico. He doesn't have to get much more than that, provided that Scheinbaum lives up to her end of the deal. The market was incredibly ugly before Scheinbaum came to the table with a peace offering that will no doubt include Mexico buying more of our stuff.

But President Trump can now crow the tariffs work. He's giving my wife a chance to import one more truckload of phosphoroalgavel spirits just in case things break down, which, with Trump, is always a possibility. I'd like to say, as always, more markets on my podcast, just for you right here on MadMoney. I'm Jim Cramer. See you tomorrow!

All opinions expressed by Jim Cramer on this podcast are solely Cramer's opinions and do not reflect the opinions of CNBC, NBCUniversal, or their parent company or affiliates, and may have been previously disseminated by Cramer on television, radio, internet, or another medium.

You should not treat any opinion expressed by Jim Cramer as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. Cramer's opinions are based upon information he considers reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Mad Money Disclaimer, please visit cnbc.com forward slash madmoneydisclaimer.

Get a quote today. Restrictions apply. USA!