Deep Dive
Shownotes Transcript
Von Willebrandt disease, or VWD, is the most common inherited bleeding disorder. It's estimated that more than 3 million Americans are affected. Does that include you? If you've ever experienced prolonged or heavy nosebleeds or similarly unusual bleeding during a dental procedure or your monthly period, it could be VWD. Find out. Talk with your doctor. Already being treated for VWD? Be sure you're satisfied with your therapy. Ask your doctor if your current treatment is still for you. After all, you do have options.
Homes.com knows that when it comes to home shopping, it's never just about the house or condo. It's about the home. And what makes a home is more than just the house or property. It's the location and neighborhood. If you have kids, it's also schools, nearby parks, and transportation options. That's why Homes.com goes above and beyond to bring home shoppers the in-depth information they need to find the right home.
And when I say in depth, I am talking deep. Each listing features comprehensive information about the neighborhood, complete with a video guide. They also have details about local schools with test scores, state rankings, and student-to-teacher ratio. They even have an agent directory with the sales history of each agent. So when it comes to finding a home, not just a house, this is everything you need to know, all in one place. Homes.com. We've done your homework.
My mission is simple, to make you money. I'm here to level the playing field for all investors. There's always a bull market somewhere, and I promise to help you find it. Mad Money starts now. Hey, I'm Kramer. Welcome to Mad Money. Welcome to Kramer. I'm just trying to make you a little money. My job is not just to entertain, but to educate and teach you. So call me at 1-800-743-CBC. Tweet me at Jim Kramer. The bulls are roaming freely.
And with the exception of the drug stocks, they cannot seem to be stopped. Look, that's my read on today's action. Another sensational day where the Dow gained 335 points, S&P jumped 1%, and the Nasdaq, whoa, more pole vaulting, up 1.5%. This market is not enduring the waning days of the Biden administration. It's experiencing the hopes of investors in the next administration, one that begins next week with the inauguration of a much more pro-business president.
We have no idea whether the next administration will live up to the lofty levels that the average has now gotten. Will Trump be pro-tech? Will he embrace mergers? Will a rising tide lift all boats? Honestly, it's going to be tough. Generally, businesses want to be able to do what they want when they want to while not paying a lot of tax. Is that unreasonable? Japan.
Very unreasonable if you think big business is inherently nefarious and all these companies are run by greedy oligarchs. But if you believe in free market capitalism, letting businesses do what they want within certain limits, well, that is the name of the game. We won't have to wait long for Monday's inauguration because Trump's intends to unleash a huge swath of deregulation. Boom.
OK, rolling back Biden's executive decisions. Boy, there are a ton of those while closing our borders and starting to deport who knows how many undocumented immigrants. Of course, many of these changes may not be allowed. Some will be acted on immediately. Some will never get kicked up the Supreme Court. But it sure seems like Trump plans to come in hot to advance the prospects of business. That's the only thing that can justify this market's recent rally.
Now, my interactions with soon-to-be President Trump tended to revolve around the stock market, which he thinks of as the true barometer of his job performance. It's funny because Biden never cared about the stock market, even though stocks did great during his administration. He wanted to be a class warrior, seeing himself as the labor president. Trump was most certainly, he doesn't want that. He wants to be the capital president. I don't expect anything different this time around. So we'll have plenty of executive decisions to parse on Tuesday. I wonder if the new president will try to solve the conundrum of TikTok.
where Congress has spoken and the shutdown of the Chinese-sponsored app is now very much assured. The president-elect wants to see if he can get a deal going here, but he respects the Supreme Court, as he says he does. I don't see how anything can be worked out without an outright sale. I'm going to give you more on that later in the show, but that seems to be a given.
At the same time, Trump intends to roll back regulations, especially anti-fossil fuel expansion, while rounding up undocumented immigrants to somewhere. And now he has to find a way to make 170 million TikTok users as happy as possible while blocking the People's Republic of China from getting all their data and using the site to brainwash young people? Tall orders!
We'll have a Tuesday. Tuesday continues with the regular reporting season. And we got some pretty compelling companies that I expect to talk about a brighter future, even if it's also somewhat uncertain, both politically and economically. 3M reports in the morning. And I bet that CEO Bill Brown, he's a total hitter. I think he delivers an awesome quarterback.
Speaking of awesome quarters, we should get a first-class blowout from United Airlines, which is riding this incredible wave of airline profitability. When United reports after the bill, I think shareholders will be rewarded with a huge beat, as the company's benefiting from a lack of planes and a lack of competition that allowed ticket prices to go ever higher. As you know, not so good for consumers or the Consumer Price Index, but tremendous for shareholders. United, one of the best performers in the S&P 500 last year, was at $38 back in August. Today, it closed at $107.
Wednesday, we got some real firecrackers. The data center business is red hot. And in order to fuel these warehouses full of servers and send the air conditioning in and all sorts of electricity, what do you got to do? You need more power plants. That means they're likely to place orders with NatGas turbine maker GE Vrnova. That's another one of last year's best performers. I don't think it's done. Oil service kingpin SLB, the old Schlumberger, reported today, and it was smashing.
Now, the pin action from that allowed competitor Halliburton to rally 2.2 percent. But the good numbers from SLB were largely from overseas. So the domestically oriented Halliburton won't be able to put up that kind of surprise. The reason why how is because soon to be President Trump seems to want to drill everywhere but playgrounds, although it's truly to rule those out, too.
We also get results from two household names, Procter & Gamble and Johnson & Johnson. I think Procter might struggle with a strong dollar in China, while J&J still has to deal with the talc, asbestos lawsuits and the recent acquisition of Intercellular for $14 billion, which could threaten its pristine credit rating.
The market has turned against these kinds of stocks viciously, too slow growing. I think you can put it either way, though, and make good money just by reinvesting their juicy dividends. It doesn't help that all farmers under the microscope. As President Biden rushed out a series of drugs that Medicare will try to get better prices for. This is one part of the Inflation Reduction Act that actually reduces inflation at the expense of the drug companies.
One of the most popular medicines, for instance, of the year, Ligovia, that's the weight loss drug from Novo Nordisk, will get a ton of scrutiny as the White House put it on the list. Eli Lilly has a similar drug. Now people are worried that that same thing will happen to them when it comes up for regulation. So that stock got hammered. Again, it wasn't unexpected, but it stung anyway, especially because there were so many stocks screaming, hire.
Thursday, we have another GE coming in. GE Aerospace this time. And I got to tell you something. I think we have a winner, but it's not as clean as I'd like because last time there was some hair on the quarter. Supply chain issues causing an 8% hit to the stock. Now, if they get it right this time, I think that you'll recoup that loss in the same day. Please.
Mark your calendars. Jeff Marks and I will be hosting a monthly meeting of the CMEC Investing Club on Thursday, which people just always tell me are so much fun. We're going to be going over the portfolio, making some very specific recommendations. It's a new meeting. I think it's worth signing up for. You can get just free trial of the darn thing. Finally, on Friday, chronic underperformer Verizon gets a chance to chronically underperform again. Now, I know a lot of traders think that this 7% yield can act like a trampoline. While I don't like the risk, well, let's
I kind of like the word. I don't have much faith in Verizon. How about that? Also on Friday, we hear from American Express. It seems like every time Amex reports, it gets hit on that day. And what do I do? I come on here and tell you to buy it. After its juggernaut run these last few years, you'd think that when CEO Steve Squerry talks, people would want to buy, not sell. I say, so what? We'll catch it when the fools say goodbye. Here's the bottom line. As you wrap up the Biden administration, even though I've been very critical of his approach to business,
Stocks have done well. The Dow's up 41 percent. The S&P is up 58 percent. And then NASDAQ board, 49 percent. Any other president be proud of that track record? The fact that Biden seems to not be, maybe it says pretty much everything. Hey, why don't we go to Mohammed in Arkansas? Mohammed. Yeah, hi, Jimbo. God bless you, Jimbo. What's happening? For all your help on the stock market. You're quite welcome. I've been watching the show for over 15 years. Wow. Thank you.
Yeah. My star today is AbbVie that makes Kyrie Z, RynWalk, Ryler, and of course Humira. I got to tell you, I think you got the cheap one there, Muhammad. Here's the problem. People hate these companies. So what you have to do is you have to buy, you can buy it, but you have to be patient because the drug companies are in the doghouse. And that one is too. It does yield almost 4%. Why don't you wait till it goes over 4%? I feel like going right now to Tom in Washington, D.C. Tom!
Thanks, Jim, for all you do. You've made a huge difference in my financial life. Thank you, Tom. Thank you. I'm wondering what you think of SEMPRA, S-R-E. I think SEMPRA is such a buy. I don't even care that it only yields 3%. I think that, you know, this is Jeff Martin. He is bankable, bankable, bankable. I want you to own the stock. Let's go to T.C. in New Hampshire. T.C.,
Hey, Jim. Thanks so much for taking my call. You're welcome. I want to understand your view on the business for Oracle and buy, sell, or hold. Okay, I screwed up on Oracle. I sold it, and then it moved up. I don't feel like I'm as good on it as I should be, that others are better. I look at it 26 times earnings, and the last quarter was just okay. But, you know, sometimes you have to say to yourself,
I'm not the call. I'm not the call. Now, on the last trading day of the Biden administration, it's worth noting that stocks performed really darn well during his tenure. The fact that he doesn't seem proud of it, I don't know, maybe it says everything, at least to me. On May Money Tonight, earnings seasons in full swing with the big banks crossing the tape this week. I'm looking through reports with some of the major names and highlighting a few standout statistics.
Plus, I had this chance to check out with this private health care player called Included Health during my time in San Francisco. So I had him bring you the fascinating conversation. Really pretty cool. And the Supreme Court calling midnight on TikTok saying a ban could go forward. I'll reveal what it means for social media stocks. 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.
The $150 billion pet industry is booming as people absolutely love their dogs. If you're looking for a solid investment, Dogtopia is the name to know. With 300 locations across North America, it's the largest, leading, and fastest-growing pet franchise offering a recurring revenue membership model. Dogtopia offers safe, open-play dog daycare, boarding, and spa services. Want a recession-resistant franchise? Check out Dogtopia because every dog and dog parent deserve it. Go to Dogtopia.com to learn more.
When you're hiring, the best way to search for a candidate isn't to search at all. Don't search, match. With Indeed. Indeed is your matching and hiring platform with over 350 million global monthly visitors, according to Indeed data, and a matching engine that helps you find quality candidates fast. Use Indeed for scheduling, screening, and messaging to connect with candidates faster. Plus,
Just go to Indeed.com.
You need Indeed.
And now, a next-level moment from AT&T business. Say you've sent out a gigantic shipment of pillows, and they need to be there in time for International Sleep Day. You've got AT&T 5G, so you're fully confident. But the vendor isn't responding, and International Sleep Day is tomorrow. Luckily, AT&T 5G lets you deal with any issues with ease, so the pillows will get delivered and everyone can sleep soundly, especially you. AT&T 5G requires a compatible plan and device. Coverage not available everywhere. Learn more at att.com slash 5G network.
This week, earnings seasons begin in earnest with reports from the major banks, JPMorgan Chase, Bank of America, Wells Fargo, and Citigroup, along with two huge investment banks, Goldman Sachs and Morgan Stanley. Coming to earnings, there was some concern that the banks, which had rallied hard after Trump won the election, might not be able to cope with the action in the bond market. There was a fear that rising long-term interest rates might cool down the economy and do real damage to the financials.
But it turns out Wall Street has nothing to worry about because we got a cooler than expected consumer price index report on Wednesday. And because the banks, well, they're all doing great. Now, I usually try to walk through these one by one. But because we got all the major financials in a single week this time, we're going to split it up into two segments. Doing the national banks first and then the investment banks after the break. Why don't we start with J.P. Morgan, which got things going on Wednesday morning when it reported a just terrific quarter.
Huge sales and earnings beat. All three of J.P. Morgan's major business units came in better than expected. But the biggest source of upside was the commercial and investment bank, which put up 18% revenue growth. I mean, come on, that's amazing. This was driven by a 49% increase in investment banking fees, 21% increase in markets revenue. And I've got to tell you, those are incredible numbers.
A lot of people were worried about J.P. Morgan's spending, but we got a pleasant surprise on that front, too. The company's overhead ratio, that's their cost divided by revenues, came in below expectations of 53 percent. You always want to see that number lower. That's extraordinary. There was even some good news in J.P. Morgan's limited guidance for 2025 as the company raised its full year net interest income forecast by $1 billion, while keeping its 2025 expense guidance unchanged.
At the same time, CEO Jamie Dimon said, quote, businesses are more optimistic about the economy and they are encouraged by expectations for a more pro-growth agenda and improved collaboration between government and business, end quote. Music to my ears. Overall, it was an incredibly positive update from JP Morgan, so it's no surprise that the stock didn't miss up 8% for the week. Also, Wednesday morning, we got results from Wells Fargo, which I own for the Charitable Trust.
Wells missed expectations slightly on the top line, but also delivered a large bottom line beat. Net interest income came in ahead of expectations, but non-interest income meeting fees were a little light. Still, Wells had some nice growth investment banking fees up 59%, as well as investment advisory fees and brokerage commissions up 15.15%.
The bank did have higher than expected expenses, but also benefited from lower than expected net charge loss and provision for credit losses. Meaning their credit quality is terrific here. I love that. Very few deadbeats. Wells managed to maintain its aggressive buyback. No, I shouldn't call it aggressive. I'd say incredibly aggressive buyback. Repurchasing shares worth $4 billion in the quarter. That means last year they retired.
9% of their share count. When you're buying back stock that fast, it's only natural to put up big earnings per share. Remember, after all, there are a lot fewer shares. On top of that, management gave a better than expected forecast for net interest income in 2025, and they talked about $2.4 billion in gross expense reduction.
Another unheard of figure. Overall, what we got from Wells Fargo was good. Good solid result, which is all we needed for this bank. Still very much mounting a comeback. And that's why the stock rallied more than 10% this week. Given that Trump is expected to have a lighter hand on regulation, I bet Wells remains one of the best holdings out there. Speaking of comebacks, wow, Citigroup. It reported a solid quarter on Wednesday morning as well. Citi's now doubled from its low 2023 lows. Whoo.
And the company's stock spent over a year getting its act together while delivering steadily improving numbers. Now, their fourth quarter report represented another solid update. This was a nice top and bottom line beat. Citi saw growth in each of its businesses and all but investment banking beat expectations. The biggest source of growth was sales and trading.
36% year over year. That shocked me. Citi's costs remain under control, and their credit quality metrics were basically in line with expectations. But the highlight from the quarter, as I see it, was management's outlook for 2025, the best of all the banks. Citi gave the most forward-looking guidance of anyone, and almost all of it was positive.
Yes.
And management announced a new $20 billion repurchase program. No wonder the stock popped. A $20 billion buyback is huge, even for a $150 billion company. Overall, it looks like CEO Jane Frazier is really turning this thing around. Well, I've been a little bit guarded about Citigroup after the bank did so poorly for so long. And I've been right. I will say this.
This stock is by far, even after this quarter, the cheapest of the banks. So if the company can keep delivering solid results, and it sure looks like they can,
I think this one's got more upside. Finally, Bank of America reported yesterday morning B of A had a modest revenue beat and a solid earnings beat, and all four of its segments grew. And other than their assets and trading division, everything else beat expectations. B of A's efficiency ratio, that's a key measure of cost control, was slightly better than expected, but much worse than what we got saved from JP Morgan.
This is the nation's second largest bank in terms of expense control. It's still closer to come back kids like Wells Fargo and Citigroup. Still, a better than expected result is a better than expected result. I'm not going to quibble about this one. OK, five cent rate speed. Looking forward, Bank of America's net interest income outlook for 2025 was better than expected. Their expense guidance was basically in line.
This was just an okay quarter from Bank of America. The miss from their sales and trading business was glaring, given that most of the other banks did incredibly well in that space. But there are also some underappreciated aspects to the quarter, like continued improvements to the composition of their investment portfolio. This has been a quiet, low-level risk for Bank of America since the mini-banking crisis, but it never really became a problem, and certainly doesn't look like it's going to be now.
Maybe this is all you need to know. The stock rallied more than 3% this week, but almost all that came on Wednesday. In response to the quarters from J.P. Morgan, Wells, and Citigroup, and not yesterday, the Bank of America reported. So the bottom line of this group, looking at the four biggest nationwide banks, J.P. Morgan's doing great, Wells Fargo and Citigroup are in full turnaround mode, and Bank of America's doing just fine. All told, the industry's in terrific shape.
I want you to stick with Kramer to hear about the gigantic profits of the investment bank. Bad money is back everywhere. Coming up, Kramer breaks down earnings from his alma mater, Goldman Sachs, as his big bank earnings recap continues. Next.
The $150 billion pet industry is booming as people absolutely love their dogs. If you're looking for a solid investment, Dogtopia is the name to know. With 300 locations across North America, it's the largest, leading, and fastest-growing pet franchise offering a recurring revenue membership model. Dogtopia offers safe, open-play dog daycare, boarding, and spa services. Want a recession-resistant franchise? Check out Dogtopia because every dog and dog parent deserve it. Go to Dogtopia.com to learn more.
And now, a next-level moment from AT&T business. Say you've sent out a gigantic shipment of pillows, and they need to be there in time for International Sleep Day. You've got AT&T 5G, so you're fully confident. But the vendor isn't responding, and International Sleep Day is tomorrow. Luckily, AT&T 5G lets you deal with any issues with ease, so the pillows will get delivered and everyone can sleep soundly, especially you. AT&T 5G requires a compatible plan and device. Coverage not available everywhere. Learn more at att.com slash 5G network.
Tonight, before we get to the long holiday weekend, I want to walk you through the earnings from the major banks, because for the most part, they were fantastic.
Before the break, I already covered the big four national banks, and now I want to draw your attention to the two major investment banks, Goldman Sachs and Morgan Stanley. First, let's talk about my former employer, Goldman, and now a stock we own for the Charitable Trust. We used to own Morgan Stanley, a very successful position, but after selling it down gradually last year, we fully exited the position last week. Because right now, I prefer Goldman. I think it's going to be right.
For years, Morgan Stanley was the better bet because it built this huge asset and wealth management business at a time when traditional investment banking wasn't doing that well. But now that investment banking is on fire, Goldman's much closer to a pure play, which is what we really want. So sure enough, when Goldman reported on Wednesday morning, it delivered the biggest upside surprise of any of the major banks. A gigantic revenue beat, and they earned $11.95 per share. Wall Street was only looking for $8.21. Think about that. That's colossal.
Goldman's earnings more than doubled year over year. Pretty much everything worked out great for Goldman in this quarter, starting with the firm's largest business unit, Global Banking and Markets. That had a 33% revenue growth and beat revenue expectations by nearly a billion dollars. There's a beat for you. Within the Global Banking and Markets business, fixed income, currencies, and commodities trading was up 35%. Equities trading was up 32%. Investment banking fees were up 24%. Even the catch-all other revenue line,
Up 285% year-over-year. As for the other two segments, asset and wealth management, it's up 8%, crushing the estimates thanks to higher management fees, significantly higher incentive fees, and higher net revenues in private banking. The final segment, platform solutions, that's the stub of the consumer business that Goldman's been legging out of. Well, let's say it was up 16%, but it's still time to go.
Their operating expenses were down 3% year over year, perfectly in line with the estimates. Goldman's efficiency ratio was a stunning 59.6%. That's down more than 15 percentage points from 75 last year and well below the 67% number that the analysts were looking for. Wow. That represents incredible expense control. Wow.
Because the lower the percentages, the more money flows to the bottom line. When you have a monster revenue growth like they do, and you do a great job controlling costs as they've had, you can put up a stellar earnings beat. And that's exactly what Goldman Sachs did. Doesn't hurt, by the way, that they bought back $8 billion worth of stock last year, including $2 billion just last quarter alone. Goldman's return on tangible comment as shareholders' equity, their preferred profitability metric, was 15.5%. Did you know that was more than double what it was in the year-ago period?
On the conference call, CEO David Solomon was very positive about the outlook for the future, saying there had been, quote, a meaningful shift in CEO confidence, end quote, since the election. There it is again. And noting that there is also a, quote, significant backlog from sponsors, end quote, meaning private equity firms looking to do deals.
And, quote, an overall increased appetite for dealmaking supported by improving regulatory backdrop. And, quote, basically the moment Biden's antitrust enforcers are going to go, we're going to see a ton of mergers in Goldman M&A advisory business. They will be printing money. House of pleasure. Overall, it was a powerful report from the best investment bank.
Best and best bank franchise on Wall Street. No wonder the stock's finishing the week up almost 12%, trading at a fresh all-time high. I bet it's still got more room to run. And no wonder CEO David Solomon got $80 million to invest in 2030 to stay on for another five years.
Let's understand each other. I always say I am fine with these large pay packages as long as the shareholders are rewarded. And boy, have we ever been rewarded here. I own it from my travel trust. Finally, there's Morgan Stanley, the other investment bank, which reported yesterday morning. Now, given that we just sold the stock for the travel trust, this feels a little bit like reviewing your ex.
But I'll give it to you. Give it to you straight and tell you that Morgan Stanley is also doing terrifically. In fact, like my new girlfriend, Goldman, it finished the week up nearly 12%, making it one of the best performers in the group. Morgan Stanley delivered a big revenue beat and a big earnings beat.
Their institutional securities division, which houses investment banking and sales and trading, saw a 47% revenue growth, much better than expected. Investment banking up 25%. Equity revenues up 51%. Fixed income revenues increased 35%. Your eyes glaze over, but these are extraordinary. And wealth management, Morgan Stanley, a 12.5% growth thanks to higher asset levels. End quote. The cumulative impact of
positive fee-based flows, end quote. In the smallest segment, investment management, net revenue was 12.2%. There, too. The catalyst was higher assets under management, in this case driven by higher market levels. The stock market went up.
Like Goldman, Morgan Stanley had strong expense control in the quarter with an expense ratio of 69%. That's down from 84% a year ago. Boy, did that number hurt when that was reported. And better than the 73.7% number that the analysts expected. Remember, this is expenses divided by revenue, so lower is better. All told, the excellent revenue numbers and solid expense control plus $750 million in buybacks allowed Morgan Stanley to earn $2.22 per share. Wall Street was only looking for $1.70. These beats are incredible.
That's 161 percent earnings growth year over year. The investment banks are already in a golden age and Trump hasn't even been sworn in yet. Once his regulators take over, the sky is the limit for these guys. Let me give you some other highlights. Total client assets reach seven point nine trillion dollars across two asset management segments. As Morgan Stanley continues to march toward his goal of 10 trillion dollars.
And the return on tangible common equity of 20.2% was well above the 15.4% number that analysts were looking for. That, too, is huge. On the comp score, CEO Ted Pick, who's entering his second year leading the bank, was just as effusive as Solomon about the outlook for his business, saying that Morgan Stanley has, quote, momentum across all businesses, end quote. In particular, he's excited about the opportunity, yes, for M&A, saying that the M&A pipeline isn't as strong as it's been in the five to 10 years, maybe even longer.
This is incredible. When I think about what we've heard from all six major banks that I've now reviewed, one thing stands out that it's just how gettable these moves were. I've been talking about the bank
Thanks for having me.
I think Wall Street was very right with its first instinct that the banks will benefit from the Trump administration. But so many investors subsequently got spooked out of the bank stocks in the weeks afterwards because of an obsession with the macro environment, the Fed, these people who come on from the Fed and the gas service. And it was all a serious mistake.
But here's the good news. Despite the big gains for the banks this week, their stocks have quite a bit more upside because those earnings explosions. Well, I got to tell you, all they did was make the price to earnings multiples lower than we think. Much lower than the rest of the market. So the bottom line, if you don't yet own any of these banks, I want you to pick up at least one or two. I like Wells Fargo and Goldman Sachs, both very cheap. But you know what? You wouldn't benefit from owning any of them because the industry is just that good. Boom!
Jake in New York. Jake. Hey, James. Booyah. Booyah. Jake, what's up? How are you? I'm doing okay. How about you? I'm chilling. You know, it's a Friday, so. All right. Yeah, chilling. We're going to get five inches of snow here, and it sounds cool. What's going on? Okay, so I'm a big fan. I'm sure you are, too, of Jessica Tisch. You know, you guys went to the same school. Absolutely. And I'm a big fan of Jessica Tisch.
And so I was checking in on some stuff and like, you know, they used to have this superstar Chubb CEO. He's leaving. And I'm a little irked too with the fires and stuff. I don't know necessarily I want to go into insurance. But what do you think about CNA? Yeah, irked, right? It has been, even though I totally understand the bloodlines, it's not been the one I've liked. It's been a bit of a disappointment. I do like Chubb. That's where I want to be. I,
I'm not crazy about the group, but if I have to be in one of those, I'm going Chubb most definitely. I need to go to Joe in my homestead, New Jersey. Joe. Hello, Mr. Kramer. Thank you for having me on. My pleasure. What's happening? And for stressing on the importance of diversification. I love that. You bet. Always keeps me in. Excellent.
Yes. I've owned Visa for a few years now, and it's gone up considerably, over 200%. Now, if the new administration lowers the maximum interest rate, they've been talking about it, to 10% on the credit card companies, can that hurt the credit card companies if they do that? No, I think they'll do fine. Maybe even use more. What's the stock? What stock?
Visa. Oh, no. Visa is absolutely terrific. It's bulletproof. I buy Visa in a heartbeat. All right. Listen to me. If you don't own any of the financials, I'd pick up one or even two. Frankly, the industry is that good. Now, I got a lot more money ahead, including my off the tape exclusive with employer health care partner included health. You don't want to miss this.
Plus, what does the Supreme Court ruling on TikTok mean for free speech in the state of social media? You won't want to miss my take on today's news. And it recalls rapid fire in tonight's edition of The Lightning Round. So stay with Kramer. Earlier this week, when I was at the J.P. Morgan Health Care Conference in San Francisco, I had the chance to sit down with Included Health.
That's a privately held health care services platform. Both several major players as clients, including Medtronic, Walmart and CBC's very own parent company, Comcast. I like speaking of private companies because many of them are on the cutting edge of their industries. For example, included health platform uses virtual doctor's visits to help big companies save money on health care costs and give employees personalized advice on their health care benefits. That's a very exciting story. Right.
Earlier this week, we sat down with Owen Tripp, the co-founder and CEO of the privately held Included Health. Take a look. Owen, we're thrilled to have you. Please tell us what Included does for people. Included Health is the personalized all-in-one healthcare solution. And what I mean by that is
All of us go through stuff. We have to find a doctor for it. We have to call our insurance company for it. We have to find the pharmacy that would ideally have the product that would provide a solution. We bring it all together. And for members, we offer the best of a world-class health care system with advocacy and concierge services to make sure that everybody gets what they need all along the way, all big questions and small ones. You raise a word that is so important.
advocacy. People feel that they have no advocate when they navigate the system. How can you do it? It's so complex. It's sort of amazing that we have to even bring these terms to health care, right? Navigation, advocacy, wayfinding. The average American is outmatched. There are 11,000 words we throw at them in medicine and in health care and insurance.
and they need about 5,000 words for their daily lives. So what we do is we stand on their side to make sure that the bills are paid for, that they get access to the drugs that they need, that they have access to world-class primary care whenever then they need it, mind, body, and wallet,
medical, physical, and everything in between. And that's really the goal of what we do is design a system for the members. Now, you have a huge number of lives, so to speak. I don't know people who don't know you. I mean, you're talking about Salesforce, some great use cases you gave, Wells Fargo, Southwest,
Walmart. Now, Walmart had a health feature in its stores. They said it was too expensive. They are your partner. I know they can partner with anyone. What do you do for the average Walmart employee? They're incredible. What most people don't understand about Walmart from the outside is that they are insanely driven by having high-quality benefits for their associates and making sure that those benefits pay for themselves. So very specifically, they ran a five-year test with us to say, hey, look,
We'll give you access to our million associates to try primary care. It's got to pay for itself. You've got to keep people out of the hospital. You've got to keep people healthier. And they've got to love it. They have to tell us on survey that they love it. And we hit all those marks. They renewed to the entire nation.
and we of course drive behavioral health for them through brands like doctor on demand and other things we offer. - Well congratulations, that's a very big deal. - Thanks. - 'Cause Doug McMillan has a real, he has a touch. I often feel that Doug is, I mentioned you before, constructive. And once his employees do better than they ever have, this is the kind of feature that can do that. - Yeah, Doug, his board,
his management team are visionary on this topic. They understand Jim, like so many of us do, that if you look at the expenses that are operating in Fortune 500 healthcare companies today, the least tamed, the most divisive, and the most problematic is actually that healthcare benefits line. And so Doug and his team have said if we're going to continue to compete the way we have
and provide the value the way we have, we have to make sure that our benefits make sense for their associates too. Okay, so let's say I see my bill and I don't really understand. It's a $500 LabCorp bill and it wasn't supposed to be like that. Do I text you? What do I do? You can text us. You can call us. You can't yet send out a passenger pigeon to notify us, but maybe in the future you'll offer that. And of course, the included health and doctor on-demand apps are great ways to start. And what we do is we go to work in the background, making sure that you haven't been overbilled,
that dollars that are yours are rightfully returned, and even more critically, that you're getting access to the care you need. Are you diagnosed properly? Are you getting world-class treatment? If you're not, we work on those problems, too. All right. Now, how do I know that...
My doctor will be empathetic. I'm part of this empathy project with my primary care, and I always want to know whether the doctor is going to be empathetic. Can you measure that? Do you know whether the people are good and kind? It matters. One of the most incredible gifts of having a virtual first solution is that we can measure quality like it's never been measured before.
Do people come back? Do they say that they like it? Have they listened? But let me tell you something else. We've been here at JPMorgan all week. Things have been busy. You've been hearing AI? Yes. Have you heard EQ plus AI? No. Okay.
I think when any of us get sick and we need care, and certainly we hear this from our members, they want EQ plus AI. They want the best computational firepower to make sure they're getting evidence-based care. And they want people who actually care about them and demonstrate that they care about them. They don't want to be treated like another number in the system. Well, how can we be sure...
that somehow we get health care costs down. I mean, for instance, you've written the most eloquent things on GOP-1. I mean, maybe they could bankrupt the system. Maybe it's a good thing. We know that health care is not necessarily run the way that you guys do it included. What can we do?
Yeah. Unfortunately, it could probably both bankrupt the system and these are really helpful drugs. This is not incredible. It is incredible. And look, I'm a proud American about what we build in this country. You've been meeting these leaders all week and we have the best platforms for these things. And still, it's got to make sense for the right patients at the right time. It's got to get them better. And we can all agree on that. Where companies and other group purchasers ask for our help is
Hey, make sure we're getting the best possible care. Take care of the member, but don't just do it because it's just another thing to throw at these people. They're already overwhelmed by so many choices that don't work. And that's where we stand beside our clients. It seems that you know that if it's just going to be for vanity, it's no go. If you can get it so it's blood pressure, you get it for a comorbidity, then the person has a better chance. That's exactly right. What we know is that GOP1s are incredibly effective. Some of the best drugs...
invented in my lifetime certainly and attacking core problems and we think
We think they will be great for things like arthritis and other diseases down the line. But we don't know that yet. And so where we stand on the side of evidence and alongside our experts at all of these institutions across the country is let's make sure we apply it for the use cases that we know work today. That's not only appropriate for patient health. That's appropriate for the bottom lines. I know I'm going over, but one last question. Have you had a chance to speak to Bobby Kennedy Jr.?
I have not. No? I would reach out to you immediately. Yeah, great. Well, I think that what I'm hopeful for is that people want to make America healthy in all the ways. I think that's a support statement that we should all send out to the world. The question is just how we do it at scale. All right. Now, you have dangled the idea of an IPO. We sure would love it because, first of all—
There are so many people who use it. I bet they would like to be part of friends and family. Well, I'll tell you, at over 30 percent of the Fortune 100 today and a lot of happy members, we're really excited about where we go from here. Excellent. Well, I want to thank you, Owen Tripp, co-founder and CEO of Included Health and also an eloquent writer about the system. Back to some of the most cogent stuff I've ever read, because it's so hard to understand. Owen, thank you so much. You're most welcome. Thanks for having me. Anyway, back in a break.
Coming up, Kramer takes your calls. And the sky's the limit. It's a fast-fire lightning round. Next. And then the lightning round is over. Are you ready? Let's get down to the lightning round. I'm going to start with Rafi in Florida. Rafi.
Hey, this is Rafi's dad. Here's Rafi. Okay, let's hear it. Good evening to great Jim. I'm thinking about buying food for a long-term pull to add to my portfolio. It's close to an all-time high. What do you think? He's got horse sense. I say put a half on it and wait for 10% cut. I like his attitude. Let's go to Drew in Ohio. Drew. Hey, Jim. How you doing? Big booyah for Drew and Jody in Ohio. Wow. What a booyah. I like it.
Yes, I want to talk about Louisiana Pacific. The last three quarters, they beat their earnings. However, the ROA, the ROE in the gross margin has kind of been down the last few quarters. The balance sheet is a plus.
Their February 25th earnings is questionable with the new Trump administration and the home builders. I just want to know your thoughts on that. Well, I got to tell you, you're going to have a huge rebuild in the Southland in California. The numbers for housing are OK, not great. It's been a horse. It's been a great stock. I say you have to stick with it. Let's go to Susan in Massachusetts. Susan.
Hi, Jim. Thank you for taking my call. And thank you for making me and my husband happy and financially secure retirees. Wow. If I've done that, I did good. Thank you.
You sure did. So now, given the new Department of Government Efficiency and Easterly Government Properties dependence on government leases, can you please give me your opinion on the prospects of DEDM? You know, it's very tough to tell what they really own and what they do. And I've got to tell you, that makes me very, very shy about it. I have to say. Don't buy. Don't buy. Have overgoed us.
Squirrel in Maryland. Squirrel. Hello, Mr. Klammer. How are you doing today, sir? I am doing well. What are you up to? Yes, just trying to stack up some nuts for the winter and wondering how do you feel about S.E.E., sir? You know, I've always liked that company. I do think that, no, I like it. I'm just going to tell you that I think it's a good stock to own here, especially because it's way down from where it used to be. Let's go to Bill in Massachusetts. Bill.
Jim, real quick, I just wanted to say how phenomenal you and your staff are. Staff's amazing. Just amazing. What's going on? I'm enjoying the club a lot. I have an equity here that missed in the second quarter but came back in the third to beat. And I wanted your opinion on Idec's last, sir. No, no, too inconsistent. I've got to tell you, if Chewy were to come down, that is the one I'd like it to be in. Chewy. Let's go to Chad in Wisconsin. Chad.
Hey Jim, I'm feeling pretty pumped up. Long time listener, first time caller on the lightning round, man. I gotta tell you that. Fantastic.
Yeah. Hey, I was the CEO of this company that's saying there's very sizable tailwinds in the AI for this company. And, you know, I got to say, I'm looking back on these earnings calls and, you know, they're not massive beats, but they are definitely beats. And this stock has gotten dramatically beaten up.
You know, I had to call and talk to one of the best in the game to get his opinion on this. And this stock is ticker ADBE Adobe. Adobe. OK, now I think Adobe has come so far down that it's just I think I'm going to call it a buy. I may look back. I may be criticized. People may think, what the hell is he talking about? But Adobe, I no longer want to.
I want to own some Adobe. I'd be tempted, so tempted at my Thursday meeting, you know, Thursday meeting, monthly meeting, but I've got to talk to Jeff. Let's go to Tyson in North Carolina. Tyson! Hey, Jim, how's it going? Good, how about you, Todd? I'm doing great, Jim.
Okay. That sounds good. All right. Good, Jim. I was wondering about the chemical uranium stock, CCJ. Have you heard of that? Well, if you're going to own CCJ, if you're going to own a uranium stock, that is the one to own. I don't want to. I see no rebirth of a three-mile island. I mean, obviously, these things can't be built in any time soon, so I don't think it's a growth business. And that, ladies and gentlemen, the conclusion of the Lightning Round!
The Lightning Round is sponsored by Charles Schwab. Coming up, the Supreme Court has spoken and TikTok's time may be up. Stop scrolling because Kramer's giving his take next. Monday, kick off the trading day with Squawk on the Street. Live from Post 9 at the NYSE. Harassed tech. Endlessly. Endlessly. And the way that this administration did things was to sue...
And then talk. Right. And it was always through lawyers, and that's not how you, that will never be Trump. Never. It all starts at 9 a.m. Eastern.
Today, I got the benefit of what I thought were three wasted years at Harvard Law School. That's all I could think about when I was reading the Supreme Court's ruling that TikTok's got to go in this country, or at least be sold. Because I don't think I've ever read such a strongly worded verdict in my life. Now, there's been a lot of confusion about how the government could handicap free speech by banning TikTok. But the court explains how that whole argument is pure nonsense.
The ruling has nothing to do with free speech, people. It has to do with following a perfectly good law that says, among other things, if a site violates national security, then it can be shut down.
Since TikTok is owned by what Congress considers to be a foreign adversary and it tries to influence 170 million users with covert content manipulation, then it violates national security. Same goes for the fact that they're collecting data on all of their American users. Now, this was a very simple case of the People's Republic of China trying behind the scenes to win over half of the country that seems addicted to TikTok and certainly influence their opinions.
You're allowed to publish whatever you want online, but that doesn't mean a foreign power can operate and manipulate their own social media network here. Yeah, people
People continue to yap about how this restricts free speech. I mean, that's wrong in the face of it. So many TikTok adherents seem to believe that any product with videos that were viewed more than 13 trillion times in 2023 cannot be denied. That doesn't matter to the Supreme Court, though. What matters is national security. And it can't be overrun simply because lots of kids love TikTok. But you might say, how can it be right to shut down a site that's cheered by hundreds of billions of people around the globe? The court has no problem with people watching these TikTok videos.
But Congress passed a law saying that it can't be owned by a Chinese company closely collaborates with the Chinese government. And the Supremes say that law is perfectly constitutional. That's what the case was about, of course. If another buyer with no connection to the PRC comes in, takes it over, shuts down the data link on China, then it's game on. And if an American social media company wants to manipulate their own algorithm and spread their own propaganda, that's perfectly legal as long as they aren't working hand in hand with a foreign adversary.
But that's the only way the problem can be solved. So what needs to happen here? I know that TikTok as a whole could be worth $300 billion. That's the number Bandit are about. But what's the American portion of the business worth if America shuts it down? How much are the Chinese Google rights worth when the site's blocked in China or the banned Facebook rights? I'd say very little.
I know soon to be President Donald Trump wants to actively be involved in fixing this. Hey, I got the solution for him. All he has to do is say to China that as long as the banned Google and Facebook can operate in China at last, let them in, and let's throw in the New York Times and the Wall Street Journal for good measure, then he'll be happy to find TikTok a friendly domestic buyer or even get the legislation rewritten. But you got to let us back in. Alternatively, the only choice is to force a sale. Perhaps this might be a good time to make a deal with Meta for a low price. Why not?
In a few months, I believe that Meta's Reels will figure out all the algorithms to get all the creative developers it needs to take over the entire business. TikTok's U.S. business won't be worth much at all six months from now. Great time to sell it now.
Memo to the PRC, which secretly controls the company. There's no time like the president to sell out the people who run TikTok and give it to someone in the U.S., okay? Just sell them out. They'll get a heck of a lot more money now than if they wait for Mark Zuckerberg to eviscerate TikTok's banned remains, which is exactly what this Uber competitor and big-time game hunter will do. Like I said, there's always a bookmark somewhere. Problems are found just for you. You're here to make money. I'm Jim Cramer. See you next time.
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.
The last thing you want to hear when you need your auto insurance most is a robot with countless irrelevant menu options. Which is why with USAA Auto Insurance, you'll get great service that is easy and reliable all at the touch of a button. Get a quote today. Restrictions apply. USAA