Mad Money w/ Jim Cramer 1/7/25
44:19 Share

When you're with Amex Business Platinum, you have the card that works just as hard as you do. You give 150% to your business and so does your card. With 1.5 times membership rewards points on select purchases, you earn rewards that can take your business further. And with complimentary access to more than 1,400 lounges globally, including the Centurion Lounge, you can stay up to speed no matter where your business takes you. That's the powerful backing of American Express.

Terms and points cap apply. Learn more at americanexpress.com slash amexbusiness.

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 Kramerica. I'll be with my friends. I'm just trying to save you a little money. My job is not just to entertain you, but to explain about what happens in days like today. So call me at 1-800-743-CNBC. Rates 1, stocks 0.

That was the score of today's game, and it terrified the Bulls. Because if people are going to sell stocks every time long rates creep higher, as they did today, we could be in for a world of hurt. And that's what today's session sure looked like, where the Dow dipped 178 points. The S&P lost 1.11% in the NASDAQ, plunged 1.89%.

It's really nasty in that NASDAQ land, and it crushed lots of well-known stocks. But the selling finally got to all those speculative nuke and quantum computing stocks that I've warned you and told you to sell. It's not too late to do so. I repeat, it's not too late to dump what you and I know are garbage stocks.

Why did higher rates pulverize so much of the good part of the market today? And why do some stocks escape the gravitational pull, the laggards that came to lead today? First, the cause of the decline in bonds and that dastardly rise in yields wasn't anything catastrophic, thank heavens. We get a lot of surveys thrown at us all the time. One of them canvases service providers. And this survey showed surprising strength, so much strength that it makes you think that the Fed might not give us more rate cuts anytime soon.

Right now, a ton of investors believe that the Fed needs to put through a bunch of rate cuts in order to revive the economy. Lots of those bulls are counting on those cuts. That seems wrong. Today, they are rocked to the core because not only have they been wrong, they're starting to question the Fed's credibility. They know what's going on.

These investors were shocked to see a survey that spits out a number that is as high as it was in April of last year when rates were running high and the economy was running too high. They're presuming that long rates are going to go back to where we were when we had such a hot survey. And that's exactly what happened today. The decline in bond prices, rise in yields, gained more steam as the Treasury Department sold 10-year bonds at a sizable discount. That also is not a good sign.

All right, now let's stop the catastrophizing for a moment. In the 90s, long rates were much higher than these, mean level north of 6%. And the stock market is still rocketing higher almost the entire time. You can't just say that today's score is the final score of the year. If rates drop a bit, just say, I don't know, how about to 4.5% from 4.68% on the 10-year? That's not an impossibility. We will kick ourselves for not buying this pullback. Rates went down soon after we got that hot survey report last April. It sure can happen again. Don't count it out.

Keep in mind, we get the Labor Department's nonfarm payroll numbers on Friday. Now, if this report shows that unemployment is creeping higher or wages are stabilizing, then those loan rates are going to come down. This labor report is the single most important set of numbers out there. They are authoritative. They control the dialogue. But what is the dialogue about?

I think it's about some investors losing faith in the Fed. These traders are wondering why the heck the Fed cuts short rates by 50 basis points in September, then another 25 in November, another 25 in December. What the heck did they see that made them so aggressive? Judging by the data, nothing!

The credibility issue, if you claim you're data dependent and the data is strong, then why the heck are you cutting so aggressively? And I have to admit, as a huge backer of J-PAL, I myself am mystified. When long-term interest rates that are set by the bond market actually went higher after the rate cuts, that was a verdict. It was a nasty verdict. It was a mean verdict. It said that inflation is coming back. Business is too strong. Stop cutting. At the very least, the bond guys think the Fed got it backwards. And that's where we are now.

We know the Fed can't raise rates here. That would make them look like total idiots. But every time we get a hot survey or report and long-term interest rates go higher, there are plenty of people who say that stocks have gotten ahead of themselves. There are others who know only one thing. If rates are going higher, then we're headed for a burst of inflation. No!

That will send stocks lower. So sell, sell, sell. Sell, sell, sell. And that's exactly what happened today. Now let's go full circle. When interest rates go to levels where they were when stocks were a lot lower last year, two things can happen. Either rates repeal their climb or stocks repeal their gains. And today we got the latter. But this is an unpredictable market. Usually all stocks go down when interest rates shoot up like they did today. Instead,

We actually had a hideous decline in our leaders, the best performers, tech, and actual gains in some stocks that are really been beaten up, like the drugs, the oils, the transports. Then there are other stocks. The bank's been pretty good before, pretty good again today. Of course, sometimes the market just gets it wrong. The drug stocks, maybe they shouldn't be rallied, but they've been beaten down so badly that they're due for balance. I think they represent value.

However, they should not have gone up on higher rates. I'm betting this rally only has staying power if we get a soft employment number on Friday, followed by good news out of J.P. Morgan's health care conference in San Francisco. I will bring you that news. I will be there. The transports game, again, makes no sense. Random move. Oils? OK, oil went up a dollar. Banks? Hey, you know what? That actually makes sense, as they actually do better with slower rate cuts. And the survey numbers, well, they say that we got today. They say that's about slower rate cuts, if there are going to be rate cuts.

That said, the real action today was the decline in the tax, especially the Magnificent Seven. You heard about that all day. Now, I find that people are quick to blow out of these stocks when inflation worries.

But can I just say, I've been studying this lately, over the long term, they actually do well in precisely this kind of environment. As their growth is so spectacular, they can outrun a rise in interest rates. So don't give up the ship. Does it mean you can buy this decline? Well, is it an opportunity? I would love to say that you should just start buying all the tech stocks that got crushed today. But I know that we are two sessions away from the nonfarm payroll report, and I don't want to step in front of that freight train.

The risk reward is terrible because if wages go up or employment goes up and the president elect picks that day to say that we need to get rolling on the deportations, I mean, he's run the country already, isn't he? I mean, I don't know. Something that will cause major wage inflation, then the market's going to get crushed again, especially tech. I want to step back for a moment. Does any of this really matter long term or is it all just inside baseball? The answer is it does matter.

We have too much inflation in the system. The Fed can't do anything about it because it just cut rates. The Fed's in a bind. It can't help us. So we're at the mercy of the macro numbers that are going in the wrong direction. Or put it another way, we need to be lucky. I don't like that. That's not a good place to be. I don't want to be a bear.

But I've been talking about how much of this market has been in bad territory for some time. The really hard hit sectors during this period got a nice little bump today, but the big techs like the NVIDIAs, the Teslas, which I'm now branding a tech, and Palantir, the hottest of the hot.

Got clobbered today, and these former market leaders will go even lower if the labor department comes in too hot. That report has got to come in cool. Luck. The flimsy garbage stocks sold to you. Will you stop? Just stop with those. Blow them out tomorrow morning or you won't be watching me by next week because you'll be gone, too.

I don't want to make too much out of one session. That's two day traders. But to set up a big employment number, a couple of earnings next week does not favor the bulls. We need some signal, some sign that the Fed did the right thing when it cut rates, or else we'll have more days like today when long rates go up and a lot of stocks go down. We want stocks to represent their fundamentals, not the S&P futures.

But an overheated set of macro numbers and some weak earnings aren't going to get order restored. The bottom line. Remember, we need real reasons to buy stocks, not a dead cat bounce and valuations of being attractive. The number one thing we need, we need long rates to go lower. Otherwise, it's going to be a long way and it's long away game stretch for the bond market. And I'd rather us be in the friendly confines of our home stadium, watching rates go down and stocks go higher. Lance in Maryland. Lance.

Hey, thank you for taking my call, Mr. Crane. My pleasure, Lance. What's happening with you? First, I'd just like to say I'm a very happy club member, and I'd like to send a big thank you and Happy New Year to you and your excellent staff. I thank you, Jeff and Zev. Jeff has just been amazing. I think this comeback, by the way, in the next trackers is extraordinary, and we are taking advantage of getting that basis down. How can I help you?

My question is, this company has been through a lot of negative news in the last year and a half. Stopped its yearly bottom price of 137 a share. My question is, is it time or is it too soon for me to start a position in Boeing? I have to tell you, I've been impressed with Kelly Ortberg. I think that I've been pushing them to do that secondary for over 100 points. And you know what? He listened to me. And that tells me the guy has got highest compliment ever.

Horse sense. I'd be a bar boy. Let's go to Dave. Dave is from Illinois. Dave. Dr. Kramer, my mad squid games viewer. Do you realize your hurtless eagles will likely need to get through my one of my powerful NFC North contenders to reach the Super Bowl?

That is it's going to go right through there. Plus, Detroit's going to be an away game. And I've got to tell you something, Dave, if you take that that coach for the Chicago Bears. All right. Anyway, what's up?

Jim, this $20 billion stock finished last year up 40%. Recently, you ranked Affirm Holdings 13th out of 15 stocks to watch. Over the last four quarters, Affirm Holdings surpassed consensus EPS estimates three times. Jim, with the stock down 8% in the month of December, but with strong fundamentals, where do you see this stock headed going forward?

Boy, Dave, I've got to tell you, do you remember when Max Levchin came on our show, on our show, with the stock in the mid-30s, and he said it's bottom, and I could not believe it. You never, Dave, get these cold shots. And you know what? The stock then doubled. Pulling back, count me as a buyer. I am all in Levchin. I'm putting my chips all in Levchin right here. And I know he gets that joke because he's a funny guy.

All right, maybe he doesn't have that going for him, but he's got a lot of good things going for him. Remember, we need real reasons to buy stocks, not just like, hey, valuation's attractive, let's go to work.

We need interest rates to go a little lower. Please. On Mad Money tonight, American Airlines got a triple threat of upgrades yesterday. So, is the stock actually going to continue to go higher? I'm pouring through the research. Nipon and U.S. Steel, what the heck is that pushing back and forth? President Biden blocked their merger last Friday. Cleveland Clifton CEO is joining me to respond to a lawsuit that says basically he's a racketeer. Whoa!

Then could Tech drive a rally in the year ahead? I'm going off the charts to see if this week may be make or break. And you know, I'm a little concerned. I say you 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.

Hey, this is Jeff Lewis from Radio Andy. Live and uncensored, catch me talking with my friends about my latest obsessions, relationship issues, and bodily ailments. With that kind of drama that seems to follow me, you never know what's going to happen. You can listen to Jeff Lewis Live at home or anywhere you are. Download the SiriusXM app for over 425 channels of ad-free music, sports, entertainment, and more. Subscribe now and get three months free. Offer details apply.

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, 93% of employers agree Indeed delivers the highest quality matches compared to other job sites, according to a recent Indeed survey. Leveraging over 140 million qualifications and preferences every day, Indeed's matching engine is constantly learning from your preferences. Join more than 3.5 million businesses worldwide that use Indeed. Listeners of this show will get a $75 sponsored job credit to get your job's more visibility enhanced.

at Indeed.com slash madmoney. Just go to Indeed.com slash madmoney right now and support this show by saying you heard about Indeed on this podcast. Indeed.com slash madmoney. Terms and conditions apply. Need to hire? You need Indeed.

Thank you.

This is your chance. This is your opportunity. This is your comeback. Purdue Global, Purdue's online university for working adults. Start your comeback today at purdueglobal.edu. I've been pounding the table on the airlines for a while now, but even I was surprised when American Airlines caught not one, not two, but three different upgrades yesterday morning. Mellius, Jeffries, and Callen. This really caught my attention. Why? Because when you sometimes see multiple upgrades right after a strong quarter or some other analyst,

There was no news whatsoever here from America. Nothing notable happening in the industry either. So why the heck would three different firms go?

On the same day. So let me walk you through the research because there may be something going on here that we're missing. Like I told you last month, the entire airline industry has gotten a new lease on life because these companies which were buying new planes left and right have gradually slowed down their capacity increases. In fact, they've been removing unproductive capacity flights that were priced so low that nobody was making any money. Historically, airlines have been terrible about this. When business is good, they roll out new planes, which leads to vicious price competition and

crushes the profitability of the entire group. Now, though, the airlines are being disciplined and that makes them much more profitable. But it is a highly unusual moment. I'm not used to seeing it. All three of these upgrades cite the removal of unproductive capacity as a positive for the airline industry. But it's important to remember that these three firms could upgrade American Airlines to buy precisely because they weren't already recommending it. And they weren't recommending it because unlike Delta or United Air, Americans made a series of missteps.

Last May, America had to slash their guidance in part because they cut spending in their sales department, made some third-party booking sites ineligible for loyally points in order to get people to buy tickets from them directly, made it harder for travel agencies to sell tickets. American Airlines got hit

hit especially hard on the business travel side. This again on that huge comeback for higher margin corporate travel. A lot of people thought it couldn't happen, but it's been bolstering the bottom lines of Delta and United. Management's estimating that the loss of corporate travel business alone will cost them $1.5 billion this year. You never like to see these mistakes like this because if management can quickly swallow their pride and reverse course, that can create a buying opportunity.

The analysts that upgraded American yesterday seem to believe that's the case, as they all called out corporate market share recapture as one of the reasons for the upgrade. As the analyst at Melodias put it, I'm going to quote, "...a market at current levels is appealing, as we see above-industry unit revenue growth and additional optionality in regaining lost corporate share."

Mellius also points out that American is uniquely well positioned to benefit from the industry moving so much unproductive capacity. They note that 70 percent of Americans revenues come from U.S. domestic market versus Delta 65 United 60. The domestic market is where we've had too much capacity. Mellius goes on to say that American will benefit from, and I'm going to quote, significant overlap with Southwest in Dallas and Chicago, end quote, because Southwest needs to raise prices or eliminate unprofitable flights.

if it wants to succeed in its activist-driven turnaround plan. Aside from the capacity issue, the Jefferies upgrade cites additional tailwinds from expected aircraft deliveries. The new planes America has ordered from both Airbus and Boeing are set to have many more premium seats than existing models. That's where the money is. Talon, which has admittedly been wrong on the stock over the past year...

Noted that they upgraded too early a year ago and then failed to appreciate the transitory nature of the company's problems when they downgraded back in July. Tough look for their credibility. But Callen echoes the same sentiment as Jeffries. They think these new jets will allow American to take share in long haul international travel. Now, one thing that's all three firms seem to be picky about is Americans balance sheet. But every single one of them upgrades acknowledge they all acknowledge that they're all willing to look past it.

Jeffrey said it best, noting that American can easily clean up the balance sheet as they plan to devote their free cash flow through 2026 to paying down debt, where they're already making progress with 13 billion of this year's 15 billion debt reduction goal already completed, which will put their total debt at still $39 billion. By 2028, American plans to bring that down to 35 billion, where the company would have a leverage ratio about three. It's not that bad. What else? All

All three firms expressed excitement about Americans new credit card agreement with Citi, where Citi will become the exclusive issuer of their A Advantage co-branded car portfolio in the U.S. This 10 year agreement should expand the rewards for A Advantage members and Citi branded car members. Of course, the exclusivity doesn't start until 2026, but basically they're going to give you an even better rewards program.

Mellius noted that, quote, although the stock has moved past the Citi credit card extension in December, the margin upside from additional levers is still not fully appreciated, end quote. Adding that they believe, quote, Americans recently renewed credit card agreement with Citi is expected to add at least $560 million in incremental high margin revenue in 2025, end quote. That sounds good, doesn't it?

Then they go on, quote, the city credit card revenue in 2025 will be driven by volume increases as city markets the card more aggressively. And then in 2026, new economics kick in, end quote. That's a good plan.

Callen added, quote, we do not believe the benefits are baked into sell side estimates. And I think they're right. So where do I come down on American Airlines? Look, I think all three firms make great arguments. But much of what they're saying applies to the entire industry. It's kind of like the kind of like the cruise industry applies to everybody. And that's why I'm pounding the table on Delta United last month. It's good. As for American, could be a good turnaround.

But given that the company's reporting later this month, I think it's better to wait and see if management expresses confidence that their previous missteps are really behind them. I'd be a lot more enthusiastic about this one if they did. The bottom line, look, maybe these analysts know something about the quarter that we don't. But while I'm bullish on the airlines, I'm not confident enough to stick my neck out.

on a market until we see the earnings in a little over two weeks. Until then, you know what? Just stick with Delta United. They've been much better operators and some real good stocks. Bad Money's back after the break. Coming up, with the bid for U.S. Steel hanging in the balance, the CEO of Cleveland Cliffs talks to Kramer to weigh in on the state of the industry and what a merger would mean for domestic production. Next.

Hey, this is Jeff Lewis from Radio Andy. Live and uncensored, catch me talking with my friends about my latest obsessions, relationship issues, and bodily ailments. With that kind of drama that seems to follow me, you never know what's going to happen. You can listen to Jeff Lewis Live at home or anywhere you are. Download the SiriusXM app for over 425 channels of ad-free music, sports entertainment, and more. Subscribe now and get three months free. Offer details apply.

You know you've got a comeback in you. When you take the next step, you're going to make it count for your career, for your family, for your life. You can earn a degree you're proud of with Purdue Global.

Purdue Global is backed by Purdue University, one of the nation's most respected and innovative public universities. This is your chance. This is your opportunity. This is your comeback. Purdue Global, produce online university for working adults. Start your comeback today at purdueglobal.edu.

We had a much talked about story here and we need answers. On Friday, President Biden formally blocked Japanese steel giant Nippon Steel from acquiring the Pittsburgh-based U.S. Steel, citing national security concerns. And this is one area where Biden and Trump are on the same page. But the formal decision to block the deal has set a bunch of things in motion. First, Nippon Steel and U.S. Steel sued the federal government. Good luck there. They also sued rival steelmaker Cleveland Cliffs, along with its CEO and the head of the United Steel Workers Union.

for what they describe as, and this is a quote, a coordinated series of anti-competitive and racketeering activities illegally designed to prevent any other party than Clifft from acquiring U.S. steel as part of an illegal campaign to monopolize critical domestic steel markets, end quote. Basically, they're arguing that Cleveland Clifft colluded with the Steelworkers Union to help get the deal blocked. Now, this is a pretty serious set of allegations.

In response, Cleveland Cliffs published its own fiery press release calling the lawsuit desperate and saying both parties are simply trying to deflect blame. Earlier today, my colleagues in Squawk on the Street spoke to David Byrd. He's the CEO of U.S. Steel. And now I am eager to hear Cleveland Cliffs' side of the story. So we're going to go to Lorenzo Gonsalves. He's the president and CEO, been a frequent guest of the show. Mr. Gonsalves, welcome back to Mad Money.

Hi, Jim. It's always a pleasure to be with you at Mad Money. Same. Now, Lorenzo, I got to tell you, when people charge other people with a federal crime of racketeering,

It's not something that can be charged lightly because this is something that people actually go to jail for. I want to understand how someone could say this about you. And I know you're saying that their comments are desperate, but this is a charge that the Justice Department could look into if they keep pressing it. Look, maybe this is an influence of Nippon Steel and the legal system in Japan.

when filing a lawsuit is basically a condemnation for the defendant. Here in the United States, the presumption of innocence is something that is paramount to democracy.

We are a country that continues to teach the world how democracy works, how capitalism works, and how laws work. It's not just me. The statement coming from the CEO of Westfield called the president of the United States corrupt. As an American, I feel offended. This is just absurd.

to tell and publicly say on TV that the president of the United States direct cabinet members on how to vote on CFIUS. This is a serious accusation, and I'm sure that the U.S. government will defend themselves. From my side, I'm going to defend myself, and we're going to make sure that things are clarified.

to the maximum possible extent. All right, so, Lenzo, did you get lucky here in that I think that it's entirely possible that U.S. Steel's earnings are going to be dramatically lower than when you first got interested in 2023? Or is this just something, you know what, this thing is so valuable, someone's got to get it, and it should be you because you can make the most money with it.

Look, at this point, the situation has changed completely, Jim. At this point, tariffs are coming. President Trump will change the backdrop of the entire industry.

I'm not so sure if the best outcome is the combination of Cliffs and US Steel. Maybe the best outcome is Cliffs stays stand alone and US Steel stays stand alone and you continue to compete like we have been always doing against the likes of Nucor and Steel Dynamics. You know very well this market, Jim. It's a very competitive market.

we were happy the way we were. We were forced to do that under a situation that was not the situation we have coming now with President Trump. And what we can't afford, what we can't allow is this tariff jumping initiative from Nippon Steel trying to

basically undermine the domestic market from the inside. Japan overcapacity is the problem. China overcapacity is the problem. China learned from Japan. You can't allow that overcapacity to be the demise of all American steel companies with free money from Japan.

Why did President Biden, do you think, not act on what we think we know is the transshipment of Chinese steel through Mexico, which has been the reason why the earnings of the U.S. steel companies have been falling apart?

Look, President Biden used his powers as president of the United States after the deal received a detailed CFIUS national security review. They actually went not through one, but three 90-day periods of review through CFIUS, the normal 90 days and two more extensions of 90 days to try to prove their case.

and to make sure that CFIUS would be unanimous and approving with no national security risks. And they failed. They failed miserably. As far as reports from the press, the CFIUS members were split in the decision. What means the decision goes to the desk of the president of the United States, and the president of the United States used their power.

And he blocked the deal. The only problem was it took too long. If it were President Trump, this thing would have been resolved in one month or two months maximum. Yeah, but I heard the U.S. Steel CEO talk to David Faber this morning. He seems to think that he can convince President-elect Trump to change his mind. I mean, is that is that delusional? I don't know.

I don't know. You've got to ask President Trump. As far as I know, President Trump is a very coherent guy. He has been talking about the damage that Japan inflicts into the United States since 1987. If you go to YouTube, you're going to see a very young Donald Trump talking about Japan. It looks like he's talking today.

And on top of that, keep in mind, the biggest proponent of CFIUS from the political world was

Now vice president-elect at the time, Senator J.D. Vance, who sent a letter, co-signed by Senator Marco Rubio, that is the incoming secretary of state. So he will be member of the next CFIUS, by the way. And Senator Josh Hawley, another big proponent of the policies of President Trump.

They sent a letter to Janet Yellen on December 19, 2023, one day after the announcement of the deal, asking for CFIUS to chime in quickly to do their jobs. On May 9, the same three senators, J.D. Vance, Marco Rubio, and Josh Hawley, they sent another letter at this time to President Biden

Basically, tell President Biden, President Biden, five months have passed. Use the number of, I don't know the number from the top of my head, of the statute or another number of the statute to block this deal. Use your powers. Stop saying you have your backs and things like that. Your job. He didn't do it. He took too long. That's why we are landing in this strange situation. We will resolve this. When your steel was confirmed,

When U.S. Steel was going to earn $4.64, you were willing to pay $35 for it. It's now going to earn $1.95. Actually, it's not going to earn $1.95. Let's stop kidding ourselves. Maybe it earns $1. What's it worth if it makes a buck per share?

Look, I'm not going to go into this discussion right now, Jim. I think we have a much more important task to resolve on this thing. They have until February 2nd to pack and go. That's what the law says. And like I hear a lot,

They follow the law. So they have to follow the law. OK, asking for a nation is not following the law. He's asking for a miracle. I need your help. One last question. What is the biggest threat facing the U.S. steel industry right now? Overcapacity, overproduction of steel.

Biggest problem, China. Biggest mentor of the problem, Japan. Japan taught China overcapacity is fine, particularly if you are a friend. If you are a friend, you can take advantage. You can take advantage of the market. You can take advantage of the workers. You can take advantage of the goodwill of the American people.

That has to stop. I'm glad that Biden finally did what he had to do. But President Trump will continue to do it, and they're going to make America great again. And I'm very proud to be part of it. All right, let's leave it at that. Lorenzo Gonsalves, chairman, president, and CEO of Cleveland Quist, responding to some pretty serious charges that I think would make anyone angry. I think that all I can say is, Lorenzo, good luck on this. Good luck, okay?

Thank you very much, sir. I really appreciate it. We'll be right back after the break. Coming up, stocks wavered in today's session, but are the charts pointing towards a mega-cap-fueled rally? Kramer's tackling the technicals of tech, next. Now that the market spent over a month trading sideways, digesting the huge post-election rally, what are we going to look for going forward?

There's a lot of uncertainty in this environment, with most of it coming from, of course, the bond market, like I said at the top of the show. Long-term interest rates have steadily marched higher since the Fed started cutting short rates in September. And that's made things very tricky, especially after yesterday's hideous three-year Treasury auction. Today's actually ugly.

Sometimes at moments like this, you need to step back from the fundamentals, try to find a more quantitative approach, right? And that's why tonight we're going off the charts with the help of Jessica Inske, first woman on the active trader desk at Fidelity, now director of investor research at StockBrokers.com, as well as a co-host and founder of the Market Make Her podcast. She pounded the table in mid-October, not long before the whole market caught fire. I like that call. We didn't know why stocks would take off in November.

at the time we didn't know would be a Trump rally. But InScape's analysis told us that good things were possible. Nice. So what does she see right now, though? Tricky. At the moment, she's noticed two themes. First, the 10-year Treasury yield is approaching 4.75%. That is a critical resistance level.

If that resistance holds, as we talked about at the top of the show, we might not have to worry about the bond market going against us. Second, the semiconductors are turning bullish across the board. I didn't feel like it today, but bear with us. To InSkip, that means the tech may be ready to take the lead again. As she sees it, this is a recipe for a fairly narrow tech-driven rally, like we've had for big chunks of last year. And you know what?

I think we do a lot worse. First, though, let's take a look at the daily chart of the S&P 500. In Instagram's view, the S&P needs to overcome its ceiling resistance at 6.050, right here, which is the level where it set a lower high on December 26th. So we've got to go back to that level. That's up about 140 points from where it's currently trading. Otherwise, she's watching for a breakdown below the 50-day moving. That's purple. OK, a breakdown here, which we got to today.

following by a test of the post-election gap up, which took us to 5864. You know, so we're kind of I would say we're in a little precarious area here. Take a look. There's the post gap up. Come back down. If the S&P can break out above 6050, that's that level again. Instagram says that would be incredibly positive sign because it would trigger a bullish crossover in the M.A.C. down here.

This is the MACD, the Moving Average Convergence Divergence Line. This is one of the most reliably bullish signals out there. So if she wants that to cross over, that would be terrific. Put it all together, she thinks the daily chart's pretty noisy. There are some things that could go right, but there are also plenty of things that could go wrong. You know, sure, we've got to break this. I think it's going to be very hard to do. But if we zoom out to the S&P 500's weekly chart, we see a very different picture, much less noisy. Inskim has a set of straightforward rules here. She likes to watch the 13-week, OK?

the 26-week and the 40-week moving average, because 13 weeks is one quarter, and that's the key unit of time in this business. When all those quarterly moving averages are sloping higher and acting as forces of support, that tells you we've got a bullish trading cycle, which is exactly where the S&P 500 has been. However, if it finishes the week below 5,940, which, by the way, is where the 13-week moving average currently sits—

Ben Inskip would say we're in a serious breakdown mode. We're below that level right now, but this is a weekly chart, and we've still got a few days to bounce back.

Next, remember, InScape thinks that given the action in the bond market and the rebound in the semiconductor stocks, we could be in for another tech-led rally here. So check out the weekly chart of the technology select sector spider fund, and that's called the XLK. Tech roared yesterday in the run-up to CES. That's formerly known as the Consumer Electronics Show. But today it's sort of hard, despite Jensen Wong's incredible keynote speech last night. More on that later. When you look at the weekly action in the XLK, though,

InSkip notes that it has been leading the way for months until the last few weeks when the tech ETF failed to make a higher high. InSkip was hoping that CES could be the catalyst that drives the breakout to the upside here, but so far that sure hasn't happened. Still, she points out that when you look at the 13, 26, and 40-week moving averages, they're all trending higher.

acting as support for the XLK. For InSkip, that means tech still got a bullish trading cycle. I know it sure didn't seem that way, but you can see the charts, right? Right now, she sees a ceiling resistance at $241.48. She got a floor down here, 232. Pretty tight here, huh? At 237, I'm sorry. Keep in mind, that's a weekly floor of support.

We broke down beneath that level today. But if the XLK can get back above 237 by Friday, then it will be no big deal. On the other hand, if tech can't find its footing this week, that would be problematic for the chart. Still, in Instagram's view, what's happening in tech as represented by the XLK is looking much, much, much, much better than what's happening outside of tech.

Many of these big tech stocks have huge weightings, the S&P 500, because the index is weighted by market capitalization. You've got multiple trillion dollar tech enterprises in there. So to get a sense of what the market would look like without tech, InScape likes to look at the S&P 500 Equal Weight Index. This is a version of the S&P where every stock is weighted the same. Very unrealistic, but it does show you that it takes away the power of the tech exposure. And as you can see from the weekly chart, the S&P Equal Weight, well, let's just say it's doing terribly.

Remember how I talked about the great bear market of 2024, 2025 at the top of the show last night? This is what I'm referring to. When you weigh the big tech stocks the same as everything else, the S&P 500 is getting pulverized. Insikin points out that it's already fallen through the floor, the first two key floors of support represented by the 13th and the 26th.

The next floor is the 40-week moving average at 6,990. Oh, man, do we ever not want to take that out? Fortunately, InSkip says we don't need the S&P equal weight to make a complete comeback here. In her view, tech can carry the whole market as long as the S&P equal weight stops collapsing. As long as it finds its footing at the 40-week moving average, she's betting that tech can take care of everything else for the normal market.

Normal S&P 500. No, it's not this equal weighted thing. So 40 week moving average got a hold here. It's not going to be easy. Here's the bottom line. The charges interpreted by Jessica Inskip suggested we could be headed for another narrow tech led rally. As long as yes, we can put up some OK performance this week. Otherwise, she is less confident in her positivity. And that was really the takeaway for me. I came back thinking, you know what, when she was.

What a great call. I regarded these as... But you know what? There are some things that could go right, and I like that. Bill in Massachusetts. Bill. Hi, Jim. Thanks for taking my call. Of course.

Jim, I bought DuPont twice already. I'm a club member. I'm thinking about buying a little more. Could you explain a little bit more about how they're going to spin off the water part of it and any other strategies that you could explain? All right. First of all, I agree. Thank you for being a member of the club. I looked at DuPont. I was going back over with Jeff Marks, my partner, of course, with the trust. We feel very strongly that the three units will never actually be spun off.

What will happen is one of them will get a bid. I think it's going to be the water business that gets a bid. I think this is one of the few situations where the sum of the parts is worth dramatically more than a hole. And like you, I want to buy some. But we feel our area should be 69.70 to buy more. I think the stock is worth $100. Look, the charts suggest we could be headed for another narrow rally led by tech. But if the S&P can't finish the week strong, their money is 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. And then the lightning round is over. Are you ready? It's time for the lightning round. I want to start with Michelle in California. Michelle.

Hi, Jim. I'd like to ask about Novo Nordisk, especially as it compares to Eli Lilly. Okay. Novo Nordisk, I think, is inferior. They don't have the production capability. They don't have what I think is the best pipeline. And I got to tell you, Denmark, geez, maybe President-elect Trump's going to pick a fight with them. I'd be careful. Let's go to William in New Jersey. William. Thank you, Jim, for having a call for me. I want to talk about Pepsi. Pepsi's been going down.

Yeah, Pepsi's got I mean, I read I talked about that Cornell Business School study last week. It's right in the wheelhouse. I mean, it's talking about salty potato chips. I don't know what to say. Yields three point seven three. Maybe when it gets to four percent. But right now it's in the crosshairs of the GOP dash one situation. Let's go to Lewis in New York. Lewis. Jim, hello from Chile, New City, New York.

Oh, yeah.

It was a cash purchase, and it included over a billion dollars of debt held by the acquired company. Okay. The company I'm referring to is Sankora. Sankora, Concha, Hawkins, Zone, used to be the old ABC, Mercer's Bergen. I have to tell you, I think that Steve Koles is really, really smart. I met him last year at the J.P. Morgan Healthcare Company, their conference, and I got to tell you, I think the stock can go lower because a lot of people don't like V, they don't like McKesson. I prefer Cardinal.

to this one. But I did like the acquisition. Let's go to Sharon in New York. Sharon. Hi, hi. Happy New Year. Oh, same. Yes, yes. I watch your show often. My friend Jim, who, I mean, not Jim. What am I saying? My God, my friend John. I have that effect on people. Yes, who lives on the Upper West Side.

He and me want to know, what is your outlook on lemonade? Okay, lemonade stock is one of those stocks that I'm talking about this show. It's up too much. You got to let it come down. It's not a joke stock, but it's losing a fortune. Companies that are losing fortunes, go over your portfolio. If you own them, sell, sell, sell. The house of fame. That was easy. And that, ladies and gentlemen, is the conclusion of the lightning round.

The Lightning Round is sponsored by Charles Schwab. Coming up, Kramer's offering up his key takeaways from yesterday's keynote from NVIDIA CEO Jensen Wong and revealing why the stock's moves aren't the be-all, end-all for the future of the GPU giant. Next.

If you look at the hideous action in the stock of Nvidia today, you'd think CEO Jensen Wang offered nothing special at his CES keynote last night. Or maybe even that he canceled it. But sometimes the stock doesn't tell the whole story, particularly this stock. First of all, the whole tech sector rolled over today, even as other parts of the market like healthcare and banks, they held up well. Second, I'd argue that tech stocks were victims of the flailing tenure of Treasury, as I said at the top of the show.

Finally, this stock was up huge going into Jensen's speech last night at its highs. It was shocking that NVIDIA managed to open up strongly this morning, and it was sailing. It only fell from those levels because of the yield on the 10-year Treasury spike. Listen, I'm a stock guy, not a tech guy, not a health guy, and not a bank guy, but I am what's called a generalist. I cover many different industries and many different companies. But some stocks I follow more closely than others, stocks like NVIDIA. That means I know NVIDIA's capabilities, and as someone who knows about the company, I did find last night's speech pretty darn dazzling.

See, last night, Jensen took a leap to go much deeper with physical A.I., including making humanoid robots and taking autonomous driving to the next level. As Jensen said, quote, everything that moves from cars and trucks to factories and warehouses will be robotic and embodied by A.I. End quote. To me, that sounds like the agentic economy where we have digital agents that can do all sorts of things for us. And it's all NVIDIA. The world will never be the same if this happens. And after last night, I think it's happening much sooner than expected.

That was the takeaway. Jensen talked about the possibly relevant AI PC, something that's been considered a bust. He mentioned several uses for Apple's Vision Pro for healthcare and gaming, another alleged bust.

Plus, there are all new clients, clients like Toyota, that may want to build out a network using a supercomputer brain in one location and then a brain on board. I know that just sounds like a press release, but if Toyota, a well-capitalized company, decides to build out a Tesla-like autonomous driving system, it's going to have to buy hundreds of thousands of NVIDIA chips. That's good for business. Very additive.

Now, there are always people, plenty of people, actually, who own Nvidia for the long term, like the trust does. They should be gratified by all these very important announcements. But there's also a huge group of people who own Nvidia because it goes up, often by a lot. And the stock went nuts going into and immediately after Jensen's speech. These people, many of whom buy call options, not common stock, don't know enough about the company to stay in it when the stock starts selling off.

I'm sure they didn't watch the keynote or read the blogs and they're just in it because of the momentum. When the momentum turns, they turn too. Sell, sell, sell. To me, this is business as usual, people. While I may not know all the exciting specs that Jensen talked about, as I see it, he assured you that the new industrial revolution is alive and well and coming to you in a very short time. In my eyes, NVIDIA stock was brought down not by anything lacking in CES, but because there was too much hot money in the stock.

And these kinds of fellow travelers are your worst enemy if you're a shareholder. This decline had nothing to do with the specs from Blackwell or any of NVIDIA's other chips. I thought NVIDIA died a few years ago, but the company NVIDIA, it is alive and well with a stock that's had this kind of move over and over again. It just stands out because the company now has $3.4 trillion market capitalization, slightly more Apple. And to some degree this morning at $153 stock, it was priced for perfection. It closed at $140.

The thing is, last night Jensen actually gave us perfection. And that's why Nvidia actually opened up, but other forces intervened and crushed the stock. We don't know what the employment number will look like on Friday, but if it's at all soft, today's sellers will be kicking themselves.

If you don't already own it, you can think about buying some now, maybe nicely below its all-time high, and wait until the labor department to buy more. If it comes in hot, you will get a chance to buy this stock lower, maybe much lower. But understand one thing the keynote dazzled. The new projects are way ahead of any other company, and this new industrial revolution belongs to NVIDIA.

That doesn't mean the stock can't go down. It just means that you can buy happily by the inevitable pullbacks, although when they do happen, remember, they tend to be sizable and brought about by scared shareholders who aren't sure exactly what Nvidia makes other than sparkling leather jackets and mini Jensen's. I like to say there's always a bull market somewhere. I promise you I'll find it 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.

Hey, this is Jeff Lewis from Radio Andy. Live and uncensored, catch me talking with my friends about my latest obsessions, relationship issues, and bodily ailments. With that kind of drama that seems to follow me, you never know what's going to happen. You can listen to Jeff Lewis Live at home or anywhere you are. Download the SiriusXM app for over 425 channels of ad-free music, sports, entertainment, and more. Subscribe now and get three months free. Offer details apply.