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The Federal Reserve should pay attention to what it wants, said Jim Cramer at his Crazy money viewers on Wednesday. It is up to the Fed to calm an economy in crisis and to control inflation, he said, but would a small inflation be so bad?
Inflation comes in many forms, said Cramer. For example, PepsiCo (PEP) noted Tuesday that the price of aluminum was up, but that President Trump had added tariffs on aluminum. Oil prices are also rising, but oil is a world commodity. The Fed can not do anything about it.
Housing remains fast, but cracks are beginning to appear with rising mortgage rates. Same thing for cars, where car prices are rising, largely because of prices, but those higher prices do not seem to stay.
So where is the real inflation? Cramer said the Fed was really concerned about wage inflation.
On Tuesday, Amazon (AMZN) raised the minimum wage it pays to $ 15 at the hour, for example, but Amazon is globally one of the most deflationary companies of all time.
The truth is that, with the approach of full employment in the United States, there are simply not enough people to work, which raises wages. This labor shortage stems from reduced immigration, lower birth rates and new regulations in areas such as trucking, which limit the number of hours worked by drivers. .
In examining the inflationary landscape, Cramer concluded that there were not many areas to be feared, and even if there were, a little inflation did not occur. never hurt anyone.
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A good used car deal
As for the automobile, new cars are available, but used cars are there too. This is why Car King's shares, CarMax (KMX), rose 14.6% for the year, while AutoNation (AN), which sells mainly new vehicles, is down 21.9%. So where does Carvana (CVNA), the company that is disrupting the used car business, put it online? Cramer searched to find out.
Although older buyers may find it ridiculous to buy a used car online, the younger ones feel at home. The company's website provides them with all the information they need, supports all the documents and even delivers the car directly to your door. Have the buyer's remorse? No problem. Just return it within seven days.
By cutting intermediaries and selling directly to consumers, Carvana was able to record 127% sales growth in the last quarter. The company has added nine new markets this year, for a total of 65, making it both a break story and a story of regional and national growth.
Cramer said that he would consider Carvana as a speculative share of your wallet. It would buy gradually through weakness, as the stock would fall as other investors take profits.
About real money, Cramer talks about the harm caused by bears. Get more of his ideas with a free trial subscription to real money.
Buy when tokens are down
Cramer told viewers that commodity semiconductor makers were in a hotbed of suffering, but that does not mean that they should all be avoided. Semiconductors are an important industry because chips are the foundation of almost everything.
So what should Western Digital (WDC) investors, with stocks down 45% from their March highs, and Micron Technologies (MU), down 30% from their May highs? ? Cramer said that although these companies are similar, they are not completely identical.
With the acquisition of Sandisk, Western Digital manufactures both hard drives and NAND flash chips. Micron manufactures NAND and DRAM chips. Of the two, Cramer said that Micron is the top company and has a unique thing in its favor. A monster stock repurchase program.
When Western Digital shares go down, they just go down. But when Micron's share goes down, the company buys aggressively by your side. So, while Micron customers are "adjusting their inventory levels," which is "buying a few chips," this is the perfect time to create a position for the next rebound.
Executive decision: CyrusOne
For its Executive Decision segment, Cramer welcomed Gary Wojtaszek, president and CEO of CyrusOne (CONE), the REIT data center with a return of 2.9%.
Wojtaszek explained that 60% of CyrusOne investors are real estate investors. This means that whenever interest rates rise, bonds become an attractive alternative to owning an REIT. That said, Wojtaszek noted that secular trends in their industry far outweighed the drawbacks of interest rates.
Speaking of these age-old trends, Wojtaszek said that there was still a gap between the spirit of explosive growth of companies like Amazon (AMZN) and Salesforce.com (CRM) and the "digital factories" who animate them. For these companies to succeed, companies like CyrusOne must do the same.
This is how CyrusOne was able to match all of its bookings in 2017 during the first half of 2018. The company has just recorded its largest quarter of its history with a record number of leases, deals and more. 39, an average duration of 12 years. Wojtaszek added that Fortune 1000 companies need a global platform and that's what CyrusOne can offer.
Prohibited offense
In his "No-Huddle Offense" segment, Cramer said it was so much easier to be a bear than a bull. Bears can cause as much harm as they would like, then simply move on to the next wall of worry. They are never held responsible for anything.
Do you remember when we were supposed to worry about a collapse in Turkey? Inflation was raging in this politically unstable country and, one way or another, it would affect your US stocks. Except that it was not the case. It does not matter to the bears, because this week Italy is in trouble and its country will certainly affect your US stocks.
Cramer said it was so easy to be a professional pessimist these days. Unless there is a direct link to US banks, none of these negative stories matter and they are all buying opportunities.
Lightning Tower
In the Lightning Round, Cramer was optimistic about Clorox (CLX), New Relic (NEWR), Johnson & Johnson (JNJ) and ShotSpotter (SSTI).
Cramer was bearish on Sirius XM Radio (SIRI) and AbbVie (ABBV).
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