Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Monday, June 19.
The sellers seem to have disappeared. Be it technology, financials or biotech, the buyers returned in all the groups on Monday. "Every time you think they've buried technology stocks, it turns out to be precisely the moment to buy them. Every time you think they've abandoned the growth stocks, no, they're right back there. Every time you've written off the industrials or decided the latest Fed rate hike means nothing to the banks, the money flows right back into the group," said Cramer.
The bank stocks were up due to two rate hikes and regulatory reliefs. "I was pretty astonished last week that these stocks traded down when both the Treasury and the Federal Reserve gave them kisses," he added. In the tech group, names like Amazon (NASDAQ:AMZN), Alphabet (NASDAQ:GOOG), Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT) and Adobe (NASDAQ:ADBE) were up after President Trump's tech summit.
In the biotech group there was strength as Trump's promise of lower drug prices is on the cards. "The director of health program Joe Grogan is crafting the executive order about pricing. That'd be fabulous news for the drug industry. Why? Because Grogan's previous job was the head of federal affairs for none other than Gilead (NASDAQ:GILD), which created a hepatitis C cure that costs $80,000. Hard to believe he'll crack down on high prices for drugs," said Cramer.
"The bottom line is there's always money that wants to play the trend of the day and today the trend is to buy banks, tech and health care, and all three are getting a boost from Washington. With Russia and health care reform off the table for a day, you can see what happens. These three sectors catch a fabulous bid, the seller walks away and the stocks fly up in unison, and those who brave the negativity walk away all the wealthier," concluded Cramer.
CEO interview - Goldman Sachs (NYSE:GS)
Cramer interviewed Goldman Sachs' chairman and CEO Lloyd Blankfein to find out his take on the economy and affairs in Washington.
When asked about the overall economy, Blankfein said, "I'd say things are pretty good. If you looked at things statistically, you looked at the numbers, you looked at the metrics, the United States at full employment, low energy prices, growth – a lot of the metrics are all positive." Europe and China are also growing, but at a slower pace.
Blankfein mentioned that he was not on board with Trump's agenda and realizes the tax cut and infrastructure spending would take time. "I know that there's some people who believe, as do we all, that sensible regulation is good, but there was some redundancy and there's been a bit of a wax built up as layers and layers have gotten on it and no doubt impeded the economy, and he represented trying to deal with it. I'd say the market now is not what he wants to do, but whether he'll be effective in accomplishing it," he added. He also said that the economic situation in the US will not get worse if Trump does not accomplish much.
He also commented on the banking crisis. "You had a severe banking crisis, which always takes time to sort out because, again, banks are, in a lot of ways, the transmission mechanism for economic growth. You can change interest rates, but at the end of the day, someone has to lend and the banks have to be in better shape so they have to be recapitalized. So if you do it by comparison to the Great Depression, that took 10 years to sort out. At the end of the day, this might also take 10 years to sort through," said Blankfein.
He said that credit needs to be given to the country's Fed for guiding the country through the crisis. "We didn't have 25% unemployment in the country like in the Depression. In fact, it never got to really 10% unemployment, and I think all that stimulus, all that interest rates being dropped to 0, all that quantitative easing in this country, achieved shallower recession." While Goldman was fined for wrongdoing, it is easier to look at things in hindsight and retrospect. Nobody really saw it coming. "It was bad behavior. But who got it right? Did the Fed get it right? Did the pundits get it right? Did all the observers of the financial market who were active then say, 'You're lending too much money against real estate, this is a dangerous thing?'," he added.
Blankfein said he takes to Twitter for voicing his opinions. Earlier these were communicated through a Press Release, but nowadays Goldman can comment on anything they have an expertise on, or even issues relating to LGBT or the travel ban.
Amazon and the grocery business
Amazon is about to change the landscape of the grocery business, according to Cramer. He added that this phenomenon is new to younger investors but those who have seen it all know that it's real.
He remembered a time when Wal-Mart (NYSE:WMT) was growing. All the small retailers had to shut shop in two years and Wal-Mart was a low cost producer. Today, Amazon is a low cost producer with the latest technology and a highly efficient delivery system.
Amazon is doing to Wal-Mart what Wal-Mart did to small retailers. He said that the pain in the grocery business has just begun.
Viewer calls taken by Cramer
PayPal (NASDAQ:PYPL): It's beginning to monetize itself. It's a winner.
Estee Lauder (NYSE:EL): Cramer would be a buyer even at the 52-week high.
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