CNBC’s Jim Cramer tells viewers not to panic because the U.S. economy can rebound from the current slowdown.
The “Mad Money” host breaks down Costco’s recent quarter and explains why the stock managed to rally, despite mixed results. Later in the show he goes over Six Flags’ rejected $4 billion bid for Cedar Fairs and chats with RingCentral CEO Vlad Shmunis.
Tune out the bears and invest for the long-term
Traders work as a screen shows Federal Reserve Chairman Jerome Powell’s news conference after the Federal Reserve interest rates announcement on the floor of the New York Stock Exchange, September 18, 2019.
Brendan McDermid | Reuters
When bearish investors and short-sellers complain that the Federal Reserve has rigged the market to go higher, “tune them out,” CNBC’s said Monday.
“These people come out of the woodwork every time the Fed cuts interest rates,” the “Mad Money” host said. “I’ve been hearing this same nonsense … since 1981” and “it’s been wrong every step of the way.”
Costco’s management deserves the benefit of the doubt for its latest quarter
People shopping at a Costco store
Scott McIntyre | Bloomberg | Getty Images
Investors must take “seemingly disappointing quarter” numbers from high-quality companies such as Costco Wholesale with a grain of salt and listen to what management has to say in the conference call, Cramer said.
The warehouse retailer, pushed to cut prices in the face of tight competition in the grocery arena, in both its fourth quarter and fiscal year ending August. After declining ahead of the report last week, the stock hasn’t missed a beat, rising more than 1.5% since the Thursday earnings call.
“Costco’s a fantastic company, management told a great story of value and trust, and I think the stock’s a terrific buy any time it gives you a pullback, just like the one it gave you the other day,” the host said.
Get a thrill out of Cedar Fair shares
Visitors at Cedar Fair’s Knott’s Berry Farm ride the new HangTime rollercoaster in Buena Park May 11, 2018.
Jeff Gritchen | Orange County Register | Getty Images
Cramer likened buying shares in Six Flags Entertainment to “throwing good money after bad.”
The comments come in the wake of reports last week that Cedar Fair rejected a . Cramer, who in August and higher dividend yield, doubled down on his thesis for Cedar Fair.
“If you already own Cedar Fair, I’d stick with it,” the host said. “If you don’t own it yet, hey, I recommend putting a small position on here, maybe waiting for a pullback … and, who knows, maybe one day a takeover bid.”
RingCentral’s $500 million partnership with Avaya Holdings Corp
Vlad Shmunis, CEO, RingCentral
Scott Mlyn | CNBC
Last week, telecommunications gear provider Avaya Holdings revealed that it has inked a partnership with cloud-based communications RingCentral in a $500 million deal. RingCentral CEO Vlad Shmunis came on to “Mad Money” to break the partnership down.
Cramer noted that before the announcement of the partnership RingCentral had been growing by more than 33%. He asked Shmunis if that could accelerate.
“We certainly hope so. It’s hard to make exact predictions, but we do know that Avaya’s customers, and frankly other customers, on-premise folks really do want to go to the cloud,” Shmunis explained.
“So, there is quite a bit of demand and with this new announcement we now have one of the world’s largest installed bases of on-prem, 100 million users, and a very well established international partner network,” he continued. “So all of this now will be exposed to Ring Central’s cloud communications.”
Don’t expect a U.S.-China trade deal unless one side makes a concession
President Donald Trump, left, and Xi Jinping, China’s president, shake hands during a news conference at the Great Hall of the People in Beijing, China, on Thursday, Nov. 9, 2017.
Qilai Shen | Bloomberg | Getty Images
Cramer warned investors “don’t hold your breath” waiting for a trade agreement to be made between the United States and China later this week. The host broke down the Trump administration’s stance going into trade talks on Thursday and said that any deal would give the stock market a boost, but it’s unlikely.
“China wants to placate us by buying some soybeans, but the White House wants real change,” Cramer said. “So until the basic political calculus changes, on one side or the other … I just don’t see a market-moving deal happening this week.”
Cramer’s lightning round
In Cramer’s lightning round, the “Mad Money” host zips through his thoughts about callers’ stock picks of the day.
New Relic: “We have to have New Relic back on. … I don’t really quite understand how it could have such a degradation.”
Leidos Holdings: “That is a winner.”
Disney: “I think that [CEO] Bob Iger has a great long-term situation brewing and I do believe that they’re going to be able to pull off their direct-to-consumer strategy. So, no, I don’t want to sell that one.”
Disclosure: Cramer’s charitable trust owns shares of Disney.