Mad Money w/ Jim Cramer 12/18/24
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Hey, I'm Kramer. Welcome to Mad Money. Welcome to Kramer. To other people, my friends, I'm just trying to save you a little money. My job is not just to entertain. Put days like this into context because they're hard to understand. So call me at 1-800-743-CBC. Tweet me, Jim Kramer. Is the economy running too hot?

Or too cold. I mean, that was the Fed's big dilemma today. And they resolved it by splitting the proverbial baby. Cutting rates by a quarter point and indicating we're likely to get fewer rate cuts than expected next year. Nobody seemed to like that answer. With the Dow ultimately tumbling 1,123 points, S&P plunging 2.95%.

And the NASDAQ company, 3.56%. I guess you could say the baby got thrown out with the bathwater. It was truly hideous, a little unexpected, and, yes, wicked. And even though the market's barely oversold, we may not get that quick snapback that we'd normally expect in a deeply oversold market. Because after the bell...

We've got disappointing guidance, well, and also earnings from Lenore. That's that giant Florida-based homeowner. And then Micron, the semiconductor colossus, fell badly after giving what I thought was a disconcerting forecast about PCs and cell phone chips that was way out of whack with what people expected. Homes and semis, both bad, not good, not good at all.

So why did the whole market fall apart in response to a rate cut? I mean, I've seen a lot of markets that have been clubbed by rate increases, but rate cuts, at first it does seem a little baffling, doesn't it? But after listening to Fed Chief Jay Powell this afternoon, I think a lot of people got even more baffled.

Because he seemed to get caught having to fulfill a prediction of the need for a rate cut, and that need was no longer self-evident. The data didn't back it up. Look, this is a tricky situation. There are areas of real weakness in many businesses in this country, but there also is real inflation that hasn't come down enough to merit many more cuts soon.

Now, we've been saying that on this show for every night. And you always hope that everyone agrees with you and respects the prospects and has thought, yeah, that's right. I heard it on Mad Money. But it's clear from how the market cratered today that there are plenty of people still hoping for cuts. And those cuts may not come anytime soon. And those people, they were wrong. Why was it such a close call? As Fed Chief Jay Powell told the reporters in that excruciating press conference, always feels like nails on the blackboard. How can you look for progress on reining in inflation while cutting rates? Isn't that a bit of an oxymoron?

And that's why nobody seemed happy with the Fed's actions. Those who wanted inflation stamped out immediately were discouraged by a rate cut. Those who want lower rates were discouraged by the implication there'll be fewer cuts coming next year. Everyone simply confounded, which is why the market reversed so hard when the Fed released its statement and then followed up with what I thought were some pretty stern comments. Almost made it sound like he's rather raising rates than cutting them. Yeah, I mean, like, I think he kind of said, well, we had the raise, there was nothing we could do. But he didn't. Of course not. The problem is,

The problem is we have two economies, people, one that's on fire and the other one's that's stalled out. They come together in a way that's very hard to fathom, which makes the Fed's job especially tricky. I always like to put it in the forms of companies because that way it becomes very clear to you. So I want you to consider the travails of a company you may not have heard of, but it's a very big company and it's called J. Bill. It's formerly J. Bill Circuit. It's a $27 billion revenue.

This is what's known as a contract manufacturer, but that doesn't capture the incredible breadth of what it does. J-Bone makes everything, electric auto parts, data center components, medical devices, tech, hardware, robotics, you name it.

Now, the stock shot up more than 7% today. Yes, on this egregious, horrible day. Because the company reported such a spectacular quarter and also dramatically raised its full-year forecast for 2025. Larger than the strength of data center construction. J-Bell is great cooling technology, which sees warehouses full of service need in order to avoid overheating. CEO Michael Dasdor said he expected J-Bell to do $5 to $6 billion in data center revenue. But now it's like $6.5 billion revenue.

But that's up so big. That's largely thanks to customers. People are saying maybe it's Amazon. 30% growth last year. 30%.

Anything related to the data center is red hot, and this extends all the way to the electric utilities because we simply need more energy than we have, which requires a gigantic build-out because our current grid won't cut it, and that is actually moving the GDP. At the same time, J-PIL is another business. Regulated industries accounting for just over 40% of its sales. Microcosm, again, that's focused on things like renewable energy, electric vehicles. That's down 7%. Ice cold.

I suspect these businesses, including solar, will continue to be weak. But then again, within the same segment, J-PAL has a pharma business, which is currently doing great because they're helping to build out its client's GLP-S1 franchise. Talk about smoking hot again. All right, this is a worldwide company, gigantic global footprint. I mentioned $27 billion in revenues. Its largest manufacturer in Mexico. Under President-elect Trump, that could be a major problem. Tariffs will absolutely slow the growth of American companies. But J-PAL says not to worry. In the past, these tariffs have been largely unlawful.

pass-through costs. So you get this all within one company. Me and J-Bell's the indeed microcosm of our economy, although the stock's only soared because there's more exposure to the hottest industries out there. How about the ones that don't, though? J-Bell represents the part of the stock market that is smoking hot, but it seemed like it just hit an ebbed and

many, many other companies hit an air pocket today after the Fed spoke, and they could be very vulnerable to even lower prices, despite the fact that the Dow's had so many down days. It's now back to where it's the longest streak of down since 1974.

Okay, then there's another side to this story, and that's the industrial economy. Residential and commercial construction away from the data center of the power grid. We have a surfeit of commercial properties, especially office buildings. We have way too much capacity in this part of the economy. It needs rate cuts. Then there's autos, gigantic part of the economy. It's directly or indirectly responsible for 4.1 million jobs. Autos are in a real slowdown. Inventory's rising. When inventories get too high, you get weaker sales, ultimate layoffs. Fed doesn't want that again.

Great cuts needed. How about housing? We saw Lenore tonight. We've got two problems with housing. First, we aren't building enough homes to meet the demand. But homebuilders are reluctant to build more unless they can be caught with excess inventory in an environment where long-term interest rates have been stubbornly high. When we consider the Fed's statements, their worries seem justified. So we won't get the new supply we want. Worse, we have the least turnover in housing in 30 years. Like the autos, housing needs lower rates to get things moving.

The Fed's comments, coupled with Lenore's earnings, well, let's say it's going to put a real hex on housing. It will be ugly tomorrow. Needs rate cuts. When housing and autos and commercial construction are weak, you get softer numbers from the materials companies, the service companies involved in the buy and selling of homes, as well as the home improvement retailers. These groups all need help from the Fed, and it doesn't look like they're going to get it.

But against that, we have persistent inflation in food, insurance, health care, and rent. It gets even more complicated when you consider what the Fed isn't supposed to be worried about, yet immigration. The immigrants who come here from all over the world are integral to the economy because our country doesn't produce enough workers on its own, and we don't have enough robots yet to do anything.

At the same time, immigration puts upward pressure on housing because everybody needs somewhere to live. Less immigration means wage inflation, but housing deflation. I'm talking about tricky for the Fed, tricky for you, tricky for me. Now, let's throw in a couple of issues that the Fed might not be worried about, but it should. Rampant speculation right now in the financial markets right here.

Endless run-ups in nuclear power, commercial space, and amorphous groups like quantum computing. The speed of the rally in Bitcoin can worry you. Those club members who read my Sunday think piece know that I think this kind of speculation is my principal concern about the market and it's coming home to roost. So you see the pattern. Some could look at the economy and say the Fed's simply fanning the flames of inflation with this rate cut. Others will say that without fanning the embers, the fire's about to go out.

Or to put it another way, we can all understand the price of eggs and coffee keep going up. But what is the Fed going to do about it? Plant coffee beans and grow chickens?

It can raise rates so high that we won't have enough money to afford a cup of joe at Dunkin' Donuts, let alone Starbucks. Eggs, yolks, bear free anyway. Sure, we can ask why doesn't a new insurer come in and take advantage of these high rates and offer something affordable? Why can't we cut out the middlemen in pharma as we see it saves money? As so many legislators tell us, we might be able to estimate that more planes from Boeing will bring the price of travel down. But when?

In the end, I really wish the Fed hadn't been so definitive about the need to cut rates going forward, albeit more slowly. We would have been much better off if they'd explicitly taken a wait-and-see approach before this meeting. This time they telegraphed the wrong thing, hence today's meltdown. But if the part of the economy that's not so hot gets worse or inflation comes down, the Fed does have more room to cut.

Here's the bottom line. A previously data dependent Fed chose not to be data dependent today with its pronouncements. And that's what drove the market down in spite of that quarter point rate cut. Something that's supposed to be good news for stocks, but it turned out to be the very opposite. The House of Payne. Jack in New York, Jack.

Hey, Jim. Thanks for taking my call. First time, long time. Excellent. Excellent. I got a question on a company I've held for a little over a year. I'm in the house of pain, actually, with this company. Since November, it's been steadily declining. And there hasn't been any bad news, although I think it's caught in the Doge effect. My company is LHXL3Harris. I'm just wondering if I should buy more here on the dip.

Hold it or just dump it. You know, we're getting where there's a problem with continuing resolution. We're getting the shutdown of the government kind of stuff again. And the Defense Department is a natural place that people want to cut back, even though you and I may think that they shouldn't. But that's what you're seeing. And that's what you're getting with the idea that we've elected a president who has said, listen, we're going to put an end to some of these wars. And that is also driving it. But don't worry. There are many other stocks in a similar situation. A

That's more of a misery love company thing. I'm sorry I said that. But what can I say? It's going down for a reason. Jimmy in Kentucky. Jimmy. Jim, with promised deregulation next year and Basel III and hopefully earnings be positive next year, what do you see with Bank of America? Do you see it maybe thinking 450? Yeah.

Well, I think the Bank of America is now going to be in that situation where we have to readjust, knowing that there are not going to be as many rate cuts as we thought. We thought there might be three, four. Now it looks like two. Actually, of course, if you watch the show, we always thought there'd be like one or two. So we think that the stock's probably fairly valued. Goes under 40. I think you have to buy, buy, buy. Paul, Minnesota, Paul.

Kramer, you bald-headed beauty, how are you doing today? Well, thank you for getting me correctly, as actually as I see myself each morning. How can I help? Hey, I'm riding out of Minnesota winter down here in Florida.

And I am perplexed. My favorite stock I own is down from a high of 146 down to 113. I bought it that first time at 44. I bought it again at 66. The stock is Vertiv Holdings. Do I buy it tomorrow morning? Okay, no. You don't want to buy it tomorrow morning. Here's why. Because there are a lot of people who are looking at this stock. It's up 137% for the year. And they're saying, you know what?

I better lock something in because I think the market's going to be bad. Now, that is not necessarily the case. But remember, we have to adjust to what people are going to react to, not just what we think, even when we will in the end be right.

Okay, look, I just wish the Fed hadn't been so definitive about the need to cut rates before the meeting. Think about we'd be in a much better place if they had just taken that explicit wait-and-see approach that they told us they would. On Man Tonight, I'm checking in the rideshare space with CEO of Lyft to get a read on third-quarter earnings, self-driving cars, and more.

Then we're continuing our series on opportunities in health care, taking a closer look at the life sciences stocks as they get shilled. And could trash be a treasure for your portfolio? I'm sitting down with Republic Services' top brass to see where their thesis stands. So stay with us.

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What do we do with the stock of Lyft, the number two ride-sharing company? That stock has given back all its gains after the company put in a real good quarter in mid-November, and its stock shot up 23% in a single session.

The whole move's been repealed. So what the heck's going on here? A big part of it is that we keep hearing good things from the autonomous driving space, whether it be Google's Waymo or Elon Musk's Tesla. Fairly unfairly, self-driving cars are seen as a potential threat to Lyft's business model, especially when Elon Musk's on very good terms with the president-elect. So what's the plan here with robo-taxis and beyond that house business? Let's take a closer look with David Risher. He's the CEO of Lyft. To find out, Mr. Risher, welcome back to Bad Buddy.

David, it's great to be back here. Thank you so much. Let's get real here. Before we talk about all the things that might be an existential threat to Lyft, how is Lyft doing right now?

- And so Lyft is doing great. And the reason it's doing great is because we continue to be customer obsessed. And you know, every time you and I get to talk, you know, we sort of have to cover some of the same things. You know, we're growing faster than ever. We got more driver hours than we've ever had. Our frequency is up. And the basic reason is because we're just delivering better for customers.

My favorite, I have two favorite examples. One is nobody likes surge pricing. You don't like it, I don't like it. A couple of quarters ago, we said we're gonna open up a can of whoop-ass on surge pricing. Actually, I brought the can of whoop-ass here that we opened up. It's actually right here. We're down 40% in surge pricing year on year, which is absolutely amazing.

Second thing I'll say is nobody likes driver cancellations. When it cancels on you, we're down from about 15%, about maybe a year and a half ago, down to less than 5%, or right around 5% driver cancellation. So as we do better, riders get a better experience. They take us more, and that's why we're growing. So what are you doing to make those changes occur that they're happening? What is the game plan of Whoop-Ass?

- The Cape paddle whoopin'. Well, you know what it is? It's about, there's a lot of math to it. You know, you really have to figure out how to make sure that every time a person, remember two million times a day we give a ride.

Every single time a person opens that app, we've got to try to figure out how to make sure that a driver is close to them, that we've predicted where that demand is going to be so the supply is close. It's sort of all this kind of background math. And then the other thing we've done is we've created this product called PriceLock, which if you commute every single day and you don't like your price bouncing around, for $2.99, you can lock in a price that will never go down.

Higher than that. So it's a whole bunch of work behind the scenes, but the goal for a rider is just to make it seem easy and simple, pick you up super fast, and get you where you want to go. Our eyes sometimes glaze over about partnerships, but when I see what your partnerships are doing for your growth, it is wrong to have them glaze over. It's very meaningful, isn't it? It's super wrong to have your eyes glaze over. Look, Warren Buffett said this. He said this about your spouse, that the spouse you pick is the most important decision you're going to make in your entire life.

And I feel the same way about partnerships. We've just partnered with DoorDash. DoorDash now, people are signing up. If you've got DashPass and you're not taking Lyft, you're making a huge mistake because once you link your accounts, you get 50% off scheduled rides to the airports, you get 5% off your daily rides, you get cheaper food delivery and all this sort of stuff. These partnerships really are the holes greater than the sum of the parts. So I appreciate you bringing it up. Partnerships are hard, just like with your spouse. Ask your wife how she likes hanging out with you every day. It's tricky sometimes, but we're

When they work, they're magical. I've been married 29 years. Wouldn't have it any other way. Well, good for you. Now, there's something I need your help on. The most intractable part of the Consumer Price Index and something that J-PAL mentioned today is insurance. I think insurance is up too much. I know from a conference that you have at Barclays.

that your team agrees, but no one seems to be able to do anything about it. I imagine you can't self-insure because you don't really know all your drivers, but this is the runaway cost that I most worry about with your business.

So I'll tell you something. So this is a cost that I would say is very much under control now in a way that maybe a little while ago people thought it wasn't. So just to be super kind of interesting about this thing, insurance is a big cost for rideshare. It's a big cost for us today. It's going to be a big cost for autonomous tomorrow. It's just, you know, it's expensive to insure these expensive vehicles driving around.

and so on and so forth. So we have a whole team. We actually do self-insure somewhat, but a lot of the risk we outsource to third-party insurance companies. The best thing I can say about that, and it's actually what you just alluded to, we actually have a really tight partnership with our insurance companies. The big providers,

We give them an enormous amount of data. They give us an enormous amount of insight into what makes for safer driving and so forth. So I would say it is a big cost. It's one that we pay a lot of attention to. Nobody likes it. There's all sorts of weird litigation stuff that tends to drive costs up. Auto parts are expensive, all these things. But we're doing a pretty good job trying to keep our insurance costs under control. And the last thing I'll say is, unlike certain other rideshare companies that I'm not going to name right now, we've said that we try not to pass the insurance costs along to riders

They've said something different. So anyway, we feel pretty good about it, but it's a big cost. OK, those are the real issues that will drive a stock. I've got to deal with something that should not have driven your stock. I need you to correct the record on market share versus Waymo. I think there's misinformation out there that has really caught people off guard.

There is. And really what's happening here, of course, is we're not just in day one of autonomous vehicles. Waymo, of course, a big autonomous vehicle company, a subsidiary of Google, they've done it, or Alphabet, done a great job. But there's also a lot of just misinformation and a lot of human nature looking at one little data point and trying to extrapolate it. So let's talk about this for a second.

In San Francisco, what we've seen where Waymo in particular has been very, very sort of impressively aggressive about spending money to gain share in this market. We've seen market share that's basically flat year on year. That's what we see. We've looked at it a thousand different ways. It's about 30 and a half percent a year ago. It's about 30 and a half percent today, which means we've grown about 15 percent year on year. I know it's a lot of math, but that's kind of how it works.

When we look at another market, Phoenix, another market where you see a lot of autonomous vehicle activity, what we see is, and this is looking at the same zip codes where there's a lot of autonomous vehicle activity in Phoenix, we've actually grown in the month of November over 20%, so faster than our average growth just in that market. So what does that tell you? What that tells you is that as autonomous vehicles come into the market, the market starts to expand. New people, new

They do all kinds of things. Some of it's just sort of tourism and sort of some of it's, wow, I never would have taken rideshare. So it's really expanding the market. And that's what gets us super excited. Well, no one's thinking about that. That means that maybe you don't necessarily need to sell your company to Tesla or Waymo, huh? We do not. We do not. No, in fact, I think it's the opposite. I think, again, back to that word partnership, I think what you'll find, look, if you look at five and 10 years, every car is going to be autonomous. If you find

If you buy an autonomous, if you buy a car in 10 years that's not autonomous, it'd be like buying a car without a radio. Like it's just, it's going to be baked in. And so what's that going to mean? That's going to mean that companies like us that generate demand and that have fleet management and that do pricing and that do onboarding and that figure out insurance on behalf of drivers today and cars tomorrow. We think we're in a great position. So we're super excited about it.

And that's that's certainly the way I wake up every morning thinking, well, this is the kind of stock people who understand that the Fed can bring down a lot of stocks, but not all stocks deserve to go down. I want to thank David Richards, CEO of Lyft, for some, I think, great common sense. David, you really do understand your business so well. It's a joy to speak to you. Thank you, Jim. Super, super pleasure. And I'm pleased to have yourself a great holiday. You too. You too. Man, buddy's back after the break.

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Given how much the markets run this year, I want to prepare for 2025 by searching for value in one of the worst performing sectors out there. One that was hit again today, health care, up less than 1% year to date, while the S&P 500 is still up more than 20%. The average health care stock is down almost 20% from its 52-week high, in part because of worries about the new administration, particularly the potential policies of Bobby Kennedy Jr. in health and human services.

But you know what? I think most of this political stuff is overblown. At some point, you've got to just accept the fact that any political negativity is already baked into the stocks. Although I have to tell you that the Fed's hawkish comments sure don't help this kind of stock. Still, we know that after a few days, this kind of move can and has historically run its course.

And that's why I went through some of the most best beaten down pharma stocks on Monday, best beaten down med tech plays yesterday. And today I want to go over the safety with the life science tools and services core. This is one of my absolute favorites because it grows really fast. The average life sciences tolls and services play is down almost 20 percent from its highs yesterday.

Yeah, these tools are really getting killed. There are only 10 of these in the S&P 500, and nine of them are down double digits. But there's some genuinely attractive companies here that don't have much sensitivity to Washington.

First, maybe the most well-known tool company, which is Thermo Fisher Scientific. Now, I like to think of it kind of as an arms dealer to the biopharm and life science space. They make big ticket equipment. These companies need to conduct research. But most of the revenues come from consumables and services for these customers. Regular viewers know that I liked Thermo Fisher for a very long time. It's been fabulous before over the last decade. But it's struggled ever since the stock peaked at the end of 2021. Pulled back hard in 2022. It's more or less been trading sideways ever since.

Now, some of this was due to tougher comparisons, as Thermo Fisher did great business in 2020 and 2021, as drug companies spent fortunes trying to figure out how to fight COVID. Afterwards, there was an industry-wide inventory glut of their machines because you only need so many in research labs. Plus, it doesn't help that we haven't had many biotech IPOs over the past three years. Normally, when biotechs come public, they use the proceeds to buy equipment and materials from companies like Thermo Fisher.

So for much of last year, the stock was working in its way, working its way higher. I thought it was going to be OK from October of 2023 to this past September was up 51 percent. But after that, it pulled back hard with the stock now down almost 18 percent from September highs. Now, we last checked in with Thermo Fisher was July.

When the company was coming off a breakout quarter, CEO Mark Casper was abusing about the company's prospects. He told us the company's firing on all cylinders, and he even had decent things to say about China, which you don't hear very often about these days. But in late October, ThermoFix reported what I call mixed quarters, slightly weaker than expected revenue, slightly better than expected earnings, and guidance for the fourth quarter that seemed actually tad soft. Stock definitely deserved a sell-off, but in response, the post-earnings pullback led right into the post-election healthcare meltdown.

And the selling and thermofearing just seemed to snowball. It only stopped when the company put its foot down and announced a fresh $4 billion buyback in mid-November. By the way, two weeks ago, they announced they'd already repurchased $1 billion worth of stock. A $4 billion buyback may not seem that much to a $200 billion company, but if they keep buying back a billion dollars of stock every two weeks, well, you know that's a different story.

I think things will gradually improve for Thermo Fisher with business picking up in 2025 and 2026. And hey, if we if the IPO market ever comes back to life, there'll be a new wave of biotech companies coming public and spending their money on life science equipment. Doesn't hurt that Thermo Fisher now only trades at 22 times next year's estimates. That's very low because this is a 30 multiple stock over many years. And I've got to tell you, I'm used to having one of the highest multiples in the S&P.

Next up is Danaher, another huge player in the same industry that we own for the Chapel Trust. Full disclosure, this is a name that we have been battling for a few years now. The position was established in early 2022, which was bad timing because I didn't appreciate the scale of the inventory glut issue. But we stuck with Danaher because we have tremendous respect for the company. I always believed that once the temporary headwinds cleared, this one would bounce right back.

It still has a high price earnings multiple, though, so it got annihilated today, down five bucks or two percent on the poorly received Fed meeting. Now, they had this gigantic upside breakout in July. They traded sideways for a couple of months before getting hit with a big breakdown in mid-October, just like Thermo Fisher. It's now down 19 percent from its August highs. Ouch. It's just rather thorough trashing. I think it's a good entry point, though. And I agree.

I'm not alone. Last Friday, analysts at Bank of America published this 2025 outlook note for the life science and diagnostic tools industry, and they upgraded Daner, noting that business should get back to normal next year, even in China, where they expect government stimulus efforts to generate a meaningful pickup in orders. There has been no government stimulus in this sector whatsoever. Now, I agree with that recommendation, though, which is why we stuck with Daner for the Chappell Trust. If, like me, you believe that the health care sector is primed for a comeback next year, Daner is a great stock, too.

More to say about this one tomorrow at our noon investing club meeting. Finally, how about Agilent Technologies, letter A, a company that provides instruments, software, and services for customers in life sciences, diagnostics, and applied industrial end markets. This one's down more than 14% from its 52-week high in May.

Agilent's in the news because the company hosted an analyst date yesterday. And from what I hear, they told a pretty good story. Companies mostly confirmed its previous long-term financial forecast, but those numbers are solid. 5% to 7% annual revenue growth combined with steady operating margin expansion resulting in double-digit earnings growth. Agilent also provided more details on the company's recent reorganization and a new strategy plan dubbed Ignite that focused on accelerating the growth rate.

while making Agilent more customer-centric and improving productivity. Now, the analyst didn't have much impact on the stock, but I think it was a good reintroduction for this fine company, which might have fallen off investors' radar during this listless period for the life science space. Again, there's a good valuation argument for Agilent here.

At its peak in September 2021, the stock sold at 37 times forward earnings. Now it's trading just under 22 times next year's earnings estimates for a reasonable valuation. I have more confidence in the numbers because we just got them from yesterday's analyst meeting. Bottom line, that's three more health care names that could be worth buying into weakness. Remember, I'm counting on that. All

All in the life sciences, tools, and services space. Let me give them to you again. Thermo Fisher Scientific, Danaher, and Agilent Technologies. I've now given you nine beaten down healthcare stocks. Boy, are they getting beaten down. And there are more to come if you tune in later this week. I think we should take calls. Let's go to Sumit in Washington. Sumit.

Hi, Jim. Booyah. Happy holidays. Same to you. Happy holidays to you, your family and the whole staff at Mad Money. Thank you for everything that you do. We are a family here at Mad Money, too. How can I help? First, just a quick shout out to my dad, Mahesh, as he's recovering from knee surgery. Just want to give a quick shout out to him for a quick recovery. Terrific.

And then my question, Jim, is as a follow-up to you with regard to Johnson & Johnson, as it's at a 52-week low, I think it's got a good growth and dividend and potential talc resolution coming up. Do you think there

It's a good time to buy and load up. I think that there are two things. There's that talc litigation. There's also some patent that's going to, for a big, big drug that's going to go off. I don't think it's going to matter. I will tell you this. I have not seen J&J this cheap in many a year. 3.5% yield, AAA balance sheet. But the group is so, so hated. If you have the temerity, if you look, I'll tell you this. If you can handle a little pain, I think you're going to get a lot of gain. How about that?

Let's go to Marissa in California. Marissa. Hey, Jim. Hi. Marissa, what's up? I wanted to ask you about Moderna and MRNA. I know the stock declined over 50% this year. Yes. And it's about 12%. And there's a huge range for price target. And I know they've got some strategic initiatives and potential catalysts. So just curious what your thoughts are.

Okay, that's a great question. And remember, the market cap's going from $100 billion in 2021 down to $14 billion. I have to tell you, even though these guys do not have any revenue growth, and I think what's most disturbing, they are not disciplined, Marissa. They just don't seem to mind that they lose so much money. And that's why this stock has gone from love to hate. All right, I think Thermo Fisher and Danaher and Agilent are all strong companies.

and you're getting a good entry point right here as these stocks get hit with the dow down this much hey by the way much more mad money including my street blue public services and you probably don't think of an ai this kind of company having ai tools and recycling but i'm hearing how it has major implications on operations for the company's ceo then you pull in all the time and ask me about these red hot speculative stocks right what constitutes a speculative name and how does it hold up in this new environment

I'm William McRetirian. I'm covering the names that you've been asking about. And, of course, all your calls rapid-fire tonight's December Wiping Round. So stay with us. We'll be right back.

After the Federal Reserve scaled back its plans for additional rate cuts next year, everyone's trying to figure out the economy maybe got overheated again, or it's going to slow, or maybe it's just right. If you want to answer that question, you've got to go to real companies. I prefer to go to individual companies that have their finger on the pulse of the economy. Take the waste management business. When the economy's humming, we get lots of construction, and that produces a lot of garbage.

Which brings me to Republic Services. This is the number two player in what they call the environmental services business. Think trash and recycling. Here's a stock that initially roared in the wake of the election. It's pulled back now pretty substantially. Not as much as WM, though, the old waste management. So let's check in with John Vander Ark, the president and CEO of Republic Services. Get a better read on the business. Mr. Ark, welcome back to Mad Money.

Great to be with you, Jim. Okay, so, sir, your company is in 43 states. So you have a very good look at the economy. Today we got a Federal Reserve chairman who basically seemed a little flummoxed, that maybe things are too hot, but you don't want to get it so it's too cool. What is your take on the boots on the ground of what's happening in this country with the economy?

Yeah, we're coming off, listen, three really great years. If you think about 21, 22, 23, double digit top line growth, which for a business like ours, which is pretty slow growth, is a great outcome. This year, we'll see that growth start to modulate a little bit. We'll probably be in the 7% to 8% top line growth this year.

And that's really pricing led for us. You know, volume has been flat at best. And so we're seeing, you know, small business on one hand is very strong. The construction side and the manufacturing side have actually been a little slower the last two years. Now, we're optimistic going forward, but the last two years have been a little bit sluggish in that space. Well, I think people should know that you are, as you say, in your volume trends, a

You have an excellent deck. You're highly correlated to housing starts, and that's been part of the economy that really has not ignited even as the Fed's cut rates.

Yeah. A one-year lag in housing starts is the best predictor of our unit growth or demand in the space. And again, we're seeing that be negative year over year. And, you know, we need to build more single-family homes in the United States. And I see it. We're in a thousand dots on the map across the United States. And we see it in Boston and Fort Lauderdale and Arizona and California. And you go across the country, we need more housing starts. So,

If the Fed cutting rates helps, we also need the 10-year to come down and get the mortgage rates down so people are going to start to move. And when people start to move, that unlocks new opportunities. And again, I don't know whether that's going to happen over the next

Three to six months or the next one to two years, I'm really optimistic we're going to see growth in that space. At the same time, what you're doing, you're doing a lot of things that I think we want our waste disposal company, so to speak, to do. You are recycling. You are doing things that I thought were not possible because you are artificial intelligence. You actually are separating trash that people felt couldn't be separated. And you're really doing what we ultimately thought we did when we were using recycling cans to begin with.

Yeah, we have really sophisticated technology. So when we take it at the curb and we tip the container, we can actually scan that stream as it's falling in and we can see in the recycling what is a real recyclable material, you know, fiber, etc.

or plastic or aluminum and what is garbage. And we can let the consumer know, hey, you got to clean up that stream because if you put garbage in, it risks contaminating the entire load. And then in our recycling centers themselves, a high level of sophistication to be able to sort things many, many times over that allows us to get everything in its right spot and get the maximum yield to sell that aluminum and that fiber and that plastic into the end market.

But you said something very interesting at the beginning of that sentence. You said basically that the consumer has to do better. Now, of course, when we're in a country like Germany, they fine you for if you put things, you put the brown glass into the green trash, then you get fined. What do we have to do in this country to make it so that recycling is taken more seriously?

Yeah, education is a big piece. I think we've got to tell people what is recyclable. And, you know, there is some wish cycling out there. The greasy pizza box people want to be recyclable. It's not. And again, that risk contaminating a load. And then educating on the packaging. I think there's a big confusion with what is made with post-consumer content, the three arrows that you see sometimes. That could be made with recycled content, which is great, but it doesn't mean it's recyclable.

So getting more material produced on the packaging side that's recyclable and communicating that clearly with customers is a big opportunity. All right. Now, does it matter about the ethos of the presidency? For instance, we know that President Biden, very, very concerned, obviously, with the environment in his way. President-elect Trump concerned about the environment in a very different way. Does it matter who's in the White House?

Well, yeah, we've had now the fourth election here where we flopped and over that run, we've had a really good run in our business in part because we take a through cycle mindset. We don't build our business based on one administration or the other, in part because we're largely regulated on the state and local level. And I think the biggest driver is consumers, whether they're Democrats or Republicans, they want to do the right thing. They know this material has value and they want to build a circular economy based

And it just makes sense. Why would I want to pay money to put something in a landfill when I could take it out of the landfill, reduce that cost, and get a second revenue stream from it? Well, it seems pretty simple, and you've done a terrific job. And when you see the market down like this, I want to urge people to be inconsistent growers that are not linked directly to the economy, like Republic Services. I want to thank John Vander Ark, President and CEO of Republic Services. Thank you for coming on the show. Great. Happy holidays to you. All right. You too. Mad Money is back after the break.

It is time! It's time for the White Round.

And then the lightning round is over. Are you ready? Let's get it done. Time for the lightning round. We might start with Joe. Info on it, Joe. Hey, Jim. Happy holidays to you and your family. Quick shout out to my son, Jackson. We love watching Marcus together. Jackson, absolutely. Jackson, good to have you on the show. What's going on?

My question for you today, sir, is about a stock I recently purchased. Their last reported earnings was a myth. After today's big moves, I'm currently down about 11% on the position. Should I buy more, hold, or sell? The stock is Oracle. Okay, remember, we don't care where the stock has come from. We care where it's going to. Unfortunately, I do think after that last quarter, the stocks that do not make the quarter are being punished here and will continue to be punished until we get better news. So Oracle does go lower, in my opinion. Let's go to Beverly, New Jersey. Beverly.

Hello, Jim Cramer. This is Beth Hurley in South Jersey. I'd like to get your take on Gilead Sciences. Okay. Gilead Sciences is a company that I think has been, the stock has come back and that's terrific, but I don't think the business is worth as much as the stock is selling. I would take profits in that stock tomorrow morning. Let's go to Mike in Pennsylvania. Mike. Jim, booyah. Booyah.

Love the interview with President-elect Trump the other day. Oh, thank you. Thank you very much. I appreciate that. How can I help? Okay, so this is kind of like a flyer I came across. I saw it on Fast Money, and it's a combination infrastructure AI mining Bitcoin. And they just broke ground on a 100-megawatt facility with CoreWeave.

to host NVIDIA GPUs, and the company is Core Scientific, C-O-R-E-G-U. Yeah, I'll tell you, if you think that today was a seminal market, in other words, that the Fed did something that is going to make people very nervous, this stock will go down for maybe a couple of days. It is very intriguing. But remember, it's losing money. Losing money stocks will not do well in this newer environment.

So let's be careful before we buy more of that stock. Now let's go to Gary in Massachusetts. Gary. Yes, Jim.

Uber is down 27%. They beat, beat, and raised. You know, the stuff with GM. It is discouraging. And I find that Uber, I personally think that a lot of it's the chart. It looks like a terrible chart. A lot of it is people right now have decided these companies are going to get hurt by ride sharing. I don't believe that. I think that Uber's attractive and it's come down a lot and I do like it. And that, ladies and gentlemen, is the conclusion of the

Lightning round!

But what exactly counts as speculation? Like Justice Potter Stewart said about pornography, I know it when I see it. Just listen to the lightning round. Most of those calls are about speculative stocks these days. So let's go over what we've been hearing. Right now, speculative stocks, they fall into three groups, commercial space engineering, nuclear power and quantum computing.

You can understand the excitement around all of these. The space business, that's people chasing Elon Musk with Starlink and SpaceX. And Jeff Bezos with Blue Origin. Nuclear power, we've got a critical shortage of electricity in this country thanks to all these new data centers that are being built. The hyperscalers are so desperate for power that Microsoft made a deal to recommission one of the reactors at Three Mile Island. As for quantum computing, it could potentially revolutionize the entire industry. But I've been hearing that for well over a decade. It's never gone anywhere.

These groups don't necessarily trade up with each other. They move independently. They don't correlate. But when things go bad like today, they all get trashed. So let's take these respective groups one by one. For space, people have been focusing on Rocket Lab USA and Intuitive Machines. Rocket Lab is a rival of Elon Musk's Space Empire, an $11.5 billion company that's losing money, but it's generated $364 million in revenue over the last 12 months. They expect to launch a SpaceX-style reusable rocket next year. Real company.

Intuitive Machines, $2 billion company has contracts with NASA for six satellites, supposed to head to the moon. It had $203 million in revenue over the last 12 months, with 359% revenue growth in the third quarter. Another real company. Nuclear's tough. Giovernova has nuclear exposure, but it's a small part of the overall pie. It's not speculative, but it's expensive. But very solid, though, because it's got natural gas turbines, which are connected with data centers.

NuScale Power, that's a $4.9 billion company, has made some promising advances in small-form reactors, but it loses a lot of money on meager sales. No, thank you.

In the meantime, there's BWX Technologies, which makes nuclear components and provides related services. $10.4 billion company, very profitable, but very slow growing. Not exciting enough for speculation. And there's the controversial Oklo, which is developing micro reactors. Very sexy. This $2.2 billion company is chaired by Sam Alban from OpenAI. It's working on experimental nuclear technology, even as a deal with Switch, big data center play. But it's losing a lot of money.

Then there's Centris Energy, $1.2 billion company, does uranium enrichment, profitable little growth, not exciting. How about Energy Fuels with the fabled U, U, U, U ticker? This company has one of the few commercial uranium mines in the U.S. Energy Fuels is a $1.1 billion company that seems to have trouble making profit. And finally, there's Cameco, very real company based in Canada, $22.6 billion market cap, profitable, expensive.

Last and maybe least are the quantum computing stocks. Right now, they're enjoying what Ben Rice, the terrific analyst at Milius, is calling quantum mania. And manias are no place for you to be when the Fed's getting hawkish. For years, we've been told that quantum computing is a better way to compute than we have right now. But the current quantum mania started when Alphabet said it had a big breakthrough with this new quantum processor. However,

Are people playing it beyond Alphabet? Well, there's Quantum Computing, a $3.1 billion business that went off today on news of a NASA contract. It's a money loser, but that doesn't matter right now, does it? D-Wave Quantum is a $1.6 billion company that develops software for quantum computing developers, losing money and very little revenue. Last night, we got a call from Rigetti Computing, a $3 billion company that's making superconducting quantum chips, but has small revenue bases, losing a lot of money.

Then there's IONQ, eponymous symbol. It's developing quantum computing hardware and software. Again, losing a lot of money. Minuscule revenues. Honeywell has an industrial quantum division. It's talked about spinning it off. IBM has a quantum project. Very real, but not enough to move the needle. There's the scoreboard. It's what you've been asking for. You can speculate away.

But recognize there's a lot to lose in these speculative stocks if they don't pan out. And many of them won't. And their stocks don't do well when inflation is stubborn, which is exactly what we heard today. Like I said, as always, more work is somewhere. Just for you right here on MadMoney, I'm Jim Cramer. See you tomorrow.

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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.

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