dollar >> how is your tummy feeling >> my final thank you, by the way, allstate, dance with the girl you brought to th . rl you brought to th 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. i promise to help you find it. "mad money" starts now hey i'mcramer. welcome to "mad money," welcome to cram america. other people want to make friends i'm trying to make you money. call me 1-800-734-cnbc or tweet me @jim cramer we had a phenomenal run today with the dow voflting 168
points nasdaq 1.8%. this was a vicious rotation powered by wall street's newfound love for the big international industrials and the u.s. bank. you really want to buy a bull market that has eyes only for a couple sectors, honestly you have no choice this market's been all about rotation for ages. there's not enough new money coming into the equity markets to driver up everything at once. it migrates from one group to the next, following specific sectors by increasing dominance of eps so when a company like cat piller reports a magnificent quarter -- investors have no use for steady drug stocks like
johnson & johnson no matter how good they are. they are very good manage manage managers want more cap to blow more money they need to sell something to raise the cash meanwhile, exchange traded funds are perfectly placed off this dynamic. you can sell and use that money to buy cyclical etf and swap into a financial etf everything set up to compound the rotation and exacerbate it, that my friends is the new normal why is it like there how have we gotten to a point where a stock like 3m or caterpillar can roar good numbers but today the stock gets slammed. first, let's stipulate the word economy is better than it was a
year ago these companies have cut cost, the managements have been waiting for this moment, right now when things get better here it is. the industrials are embracing the reality of genuinely good sales growth, not just engineered earning growth. that's why it's like catching lightning in a bottle. that's only one part of the story. second, unlike so many fast growing tech companies that never stop issuing stock, compensation for the workers, these industrials can constantly buying back their stock. that means on any given day there's not a lot of stock for sale whether you layer that on top of the idea that these companies are only at the beginning of a turn around, you're basically
seeing what i recall, a stock shortage in the industrials, manufactured by these incredible buy backs. i know that sound silly but big investest who wanted to buy -- struggled to do so sure you can buy all the ge you want ge may not have either trust me when i say as a large portfolio manager, someone that runs $5 million need to buy a lot of 3m to make it manager to their portfolio. when you add exact managers trying to do the exact same things to their stock, there's simply not enough managers around put it another way, 3m bought back so many stocks that there's not enough to go around for the buyers today we had a bunch of fund fighting over few shares over a
major american industrial. who wants to sell this stock to them after these numbers they're not going to when we get to this stage in the economic cycle when it's genuinely accelerating, we need to short measuring not just the beat but the size of the earnings and sales beat. portfolio managers are always looking for the stocks and companies they're going to surprise to the upside, you hear that all day the size of that upside surprise is what's most important right now. we know for example a company like a clorox is doing well right, and i bet it's going to keep doing well. we know pepsico report a good number because that's what it does these are what we call consistent growers but at this point in the cycle, the lasting portfolio managers are consistent zbrouers. now they're looking for a different kind of earningism they want shockingly good
numbers. they want magnitude. and you really can't generate that kind of beat if you're a slow and steady consumer products company as fantastic the ceo of pepsico is, she's the best, her company's too consistent to give you what you consider to be a true blow out. if you're 3m or caterpillar you can raise price in a spare capacity to meet nand and report a beat that so huge it will turn your stock into a magnet for money. did you see decker up today, that you say past it's a 9% growth in tools. tools, that's unheard of, which make portfolio managers want to reach for that stock at all prices they are insanely better tan expected fourth driver of the action
today. when you see the first good quarter you know things are not about to turn down these companies could have several more beats like there one. we've seen early innings perform construction thank you to the sad incidents of hurricanes. it's been good i can't believer that because we're going on -- best performer in the dow the inland for the stocks is -- demand for the stocks is fierce. how about the banks, why are they so strong it's strength wise when the economy is humming we know the economy is humming because we see the earnings from the 3m, gm and all these industrial companies that are so strong it's a straightforward equation. they all fly together, the good with the bad why, locks theft etf now with any rotation there are
freeze players what do we do with the text in the cyclical rotation? very difficult microsoft to facebook big recently the winning industrials often look like these companies, wrld wide growth, weaker dollar, don't forget that play well. robust sales, you can see is the same things happening in technology stocks but please let's not rethink this oh, let me just put a word in right now, i want to put in a word about how important washington is, how what's happening in washington.
nothing, stop waisting your time the ceos i talk to, they're nice guys it doesn't bother me, they'd rather talk about the eagles last night. they've given up on our government getting anything done they only talk about it because i insist on talking about it, they have nothing good to say. their quite embarrassed by our country. that's okay. now what's really incredible about this rotation, we haven't seen a genuine acceleration in more than just china and the u.s. in ages those have always been the two regions that have carried us or in brazil and china but you need to go back to the 1990s to get a worldwide movement that's this powerful. global growth it's an amazing thing to see so bottom line, what you're seeing is historic, our international industrials
fuelled by a weak dollar, cut to the bone staffing and fantastic managers are finally in the sweet spot so shareholders like you are making a killing i think the move may not be over we should salute those who got it right and thank them for all the wealth they've created on still one more record day. i want to go to less in virginia >> caller: jim, recently a stock of ours have taking a good hit do you feel the stock philip morris is a buy or sell? >> i struggle with this. but at 4% i think it's overdone to the down side i know it wasn't as bad as some people reacted to it wasn't the best stock for the moment rosa in new york rosa >> caller: hello >> hey roz it's jim how are you?
>> caller: hi jim. i want to asking you about nlnk. i wanted to find out -- est krng they're -- >> i think their way too bullish. this is the preclinical early drug stock that we're struggling with we -- when you have an eli lilly report a great stock, goes down 4 from there it's hard for me to do a new link. listen up people, this isn't some ordinary piece of rotation this is historic and worldwide on "mad money" tonight, feel like this rally's too good to be true, i'm foigoing off the charo a bull market. taking a hard look at hardware which shares of go pro and fitness. training your all-time lows,
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off the chart with carlie, she's a brain technician who'll be doing a teaching with me this saturday in new york she's also the author of hired probability commodity trading. she's been great for us. you have to be thinking about this right, after this run if we don't put this on the table i think we're not prudent. when the surfaces market looks bullish and placid, you've never seen a bull this calm before this october's on track to be the at least volatile month for the equity markets in modern history, at least so far do you know we've now had the longest streak without 7% pull back -- 3% pull back since the great recession.
the s&p 500 is in the midst of another streak it's close to breaking the record from most executive sessions without a 1% move meaning the action has been super sedate look, it makes sense, we've got nice earnings growth, cupped with accelerated economy, low interest rates perfect transcriptiprescriptiona healthy bull market. it's a classic nature that's gone unconcerned, why, because the volatility when that happens stocks tend to sell off, as many investors can't handle that turbulence sooner or later complacency gets punished, sometimes with a slap on the wrist, sometimes with a full on beat down.
we can certainly measure calmness, now, with a concept called implied volatility. implied volatility of a stock or index measures the level of uncertainty investors are breaking into option prices. people payless for options when they expect a good market. they may more when they expect a wild market. we use this all the time on the show it's really just a base on implied volatility calculation for the s&p 500. let's see what this tells us about the s&p a and nasdaq 100 why don't we start with the chart of implied volatility in the nasdaq future. right now garner points out its implied volatility is approaching 12%. only the fourth time it's gotten this low in the last decade.
in other words, there's an extreme lack of fear in the nasdaq whether you look at this, these people saying you know what, we're find that's nothing compared to the volatility s&p 500 features. check out this chart at the moment the s&p features are carrying implied volatility of less than 8%. this is an all-time low, this is basically saying there is nothing to worry about how crazy is that versus washington, isn't that something? think opinion the irony of that. think about the irony versus what do you see in washington. i find that extraordinary. put it all together and it's hard to imagine how this market did become less volatile but she thinks it can be more volatile that's also a concern about currency earlier this year the dollar got
weaker as garner points out the s&p future have a negative 80% of correlation. as the dollar goes down the s&p goes upwards according to the date from more research center, through the past five years the dollars had a strong tendency to rally in early october/november this would be -- to those moves. take a gander at the s&p 500 and the nasdaq 100 over the past 12 months every since the election the actions have rocketed higher nasdaq up 127% for nearly a year we've been living through one of the greatest rallies i can recall. i've been trained since 1979,
i've never seen anything like this i've been trying to maintain enthusiasm but control myself. here 2010 we're thinking -- again we're thinking about fang, something that can turn against us i think the recent technology, broad base, a lot of different equipment names and cloud-based names. now, let's zoom out and look at the monthly action, get a sense of long-term monthly play starting with the s&p charter 500. there's some worries here and i concur with garner she notices the index which is the r s i, important momentum indicator has reached 80 for the first time since 2007. over the last 20 years the r s i on the s&p 500 monthly chart has
broken out above 70 three times. one the pique of bubble in 1999. in 2007 and then in oil implosion in 2013. at the same time, garner thinks the s&p's trajectory is too steep. coming close to its long-term ceiling resistance the health firm since the bottom in 2009, garner thinks it will hold roughly 17% to the mid-100 -- she does not see any potential upside and she sees a lot of downside from this particular level. how about the nasdaq chart, guess what, the tech heavy inde
is over bought and it has a long history of pulling back or at least trading sideways, whether every the other side gets these elevated levels like the s&p, the nasdaq is close to ceiling resistance and a long way of support. you got that distance you can fall again garner's not saying we're about to crash, i point that out, but whether you look at something like that you say wait is aekd jim, isn't that a crash, no. she's not saying sell everything either here's the appointment line, the charts is interpreted by carlie garner for us. i'm a little more optimistic in that because the earnings from these great american companies have been so breath taking you need to hear garner's m.
message because some play sentsy is dangerous for us. much more "mad money," including my take on the biggest dog in the saerktd what's ahead for the humble hard wear players. and a majority stake in a high-end specialty coffee roster tonight i'm sitting down with a default player -- quality player with more consumers buying online is e con the an when it comes to retail. stick with cramer.
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and fidbit because the reason may surprise you. in recent months both stocks became wearable fitness trackers the stocks began to work their way higher go pro go to 32% since the bottom of the market while fidbit went to 52% in june have these two humbled hardware companies gotten their act together do both stocks deserve to be owned here are these losers ready to become leaders or is this a whole move ahead from stock companies that rarely fail to disappoint. both stocks spike right out of the gate when they became public in 2014 and 2015 then the companies started disappointeding investors and the stocks imploded.
go pro ipo'd to 24 in june of 2013 they closed at 31 and change itself first day of trading. let's that four days later it rallied as high as $98 on its first report the stock has more than quadrupled from where it became public, but that was the beginning of the end right around the time the stock piqued, we learned go pro has gotten permission. i felt a breach of trust with the shareholders, also the buy that created the company was less than sang wood about the stock's future trajectory. it was found in the dog house after the slow down in the products the 2015 holiday season was lousy for them, so was the 2016 holiday season the numbers were getting worse and worse.
by march the stock was trading down 7%. somehow this stock has started to rebound, how about that same goes for fidbit the fitness tracker became public in june of 2015 however when fidbit reported its first quarter out of gate the stock got clobbered, even though the number seemed solid on the surface. there were great expectations, simply too much hype the stock slowed wean the 30s and 40s. fidbit broke up too prematurely letting the shareholders sell before they were supposed to fidbit released new products like the fidbit blaze which came out in january of last year, then they slashed their guy. when the company told us it was
going to have a lousy holiday season 12 months ago fidbit was down to the single digits. even management's grim holiday forecast turned out to be too o optimistic in the wake of all this disappointment fidbit shares sunk lower since then the stock has bounced back to 6 bucks and chang. while they may not sound like much it represents percentage increasing they got to take it case by case because go pro looks like it might be turning things are still mercking at fit bid. go pro's doing something right combination of lay offs and costcos. go pro's have been trying to diversify away from cameras and drones for sometimes the drones are starting to sell
well the stock sold off hard, investors were desperate for any reason to sell the stock caught fire that's when it rallied 20% in single session. earlier last month, management announced the third quarter sales were coming in at the high end of the process stock set up another 12%, $11.89 for weeks ago. the company's coming out with new products last quarter they added the second best drone in america and there's a new 360 camera that they're releasing next month, it's been reviewed very positively go pro has realized that software in these devices matters more than the hardware the platform sometimes called the ecosystem increased dramatically in recent months. it makes it easier to edit your
videos to share them on instagram or snapchat. go pro starting growing in the fourth quarter of last year. i think they had to earn become their credibility with wall street by steadily beating the numbers. now that management's done that go pro's been catching a wave of upgrades best of all, while go pro rebounded hard off its june lows, stock's been clobbering over the weeks i think it's actually potential for a bargain. sells less than 17 times in 2019 investment fidbit, the recovery has been more short lived when it reported in august it delivered better than fared numbers. two months ago we start hearing
take-over clatter, i don't think they're about to sell. if i had dit has -- fidbit has new products, like its smart watch. it tracks everything regarding your weight online really i think it's too soon to back fidbit. they haven't won back our trust yet, although they'll have a chance to do so next wednesday in this mark even the doggest dogs can have their day. i think go pro has turned thing around here. i wouldn't be a fir putting on a smart position for the quarter fidbit i think it has a lot of wood to chop, so to speak. austin in texas. >> caller: hey jim i want to first thank you for being with us. you guys on wall street looking out for the little guys. >> that's what i intend to do for the rest of my life and i love you for seeing it that way.
how can i help >> caller: i wanted to hear your thoughts about square incorporated i know they been a company for small businesses like your restaurant when do you think that you believe get the charter and two do you think their still undervalue >> i think they'll get the charter but i don't think they're undervalued anymore. they got a 12% market cap. it's a real winner but i feel like sometimes you have to say, you know what, austin, if you haven't caught it yet let's go find something else. let's go to lisa in california. >> caller: hi jim this is lisa from california where it's 90 degrees. >> i've been there many times. how can i help >> caller: i'm calling about cisco. got a nice bump after the announcement should i hold? >> yeah i think you should chuck robins is slowly turning
the company around these acquisitions are little but they're going to start make a big difference chuck has given a nice dividend. he is going to be doing really great thing for you. i like the trajectory cisco slow and steady will win the race here from dogs to darlings go pro. i think it's back in focus i wish i could see the same thing about if i had bit much more "mad money" ahead. with the battle for the neigh's coffee drinkers brewing. i'm going to sit down with a private space i'm enthused by. sms plus more money spent online than in stores this holiday. tonight's edition of the "lightning round" so stick with cramer
♪ the wood work skmeers don't seemed to go out as much as they used to. any new players that have people lining up outside the door for food or coffee deserves our attention. look at blue stone lane, that's -- these guys take their inspiration from the coffee culture in melbourne, australia. 11 coffee shops, 7 caves but also there's one near my hometown right outside of philadelphia now we know the stories are very wrong but on any given sun morning you can expect to make upwards of an hour at blue stone cafe what are they doing right?
let's check in with nick shone on the industry. welcome mr. shone have a seat. when i first heard about it i say this is the most crowded market in the world. >> i think coffee is more signaturemented. it's undertaking a huge change driven by the success of starbucks. starbucks has done a great job with commercials capresso and -- ex press sew and marshall for young people we tried to take for the influence of premium special coffee and bring it here >> allow do you get your name around this is a very -- you have powerful competitors and yet i have to tell you i bought a baguette and everybody knew you.
how do you get your brand so big? >> it's through authentic engagement, we've never spent a dollar on marketing. >> you never spent a dollar on marketing? >> in this industry you don't need to. if you produce a great experience more often than not they'll tell their friends and broadcast by social media. >> at one point howard shelton is another place to go are people sitting at your places reading what are they doing? are they moving in and out, how do you get the flow? >> this stems back to why i created the company, part of our own daily rich wall and twice a day escape from working in banking. i think people want an escape to refresh and recharge i think this this world with continued automation and
efficiency i think people like a little dabble of communication to refresh and get back to it. it was really out of a case of necessity i've created the brand. >> how big can you be? they got the rosasry -- will you always be boutique is what i'm asking or can you blow this out? >> it just depends, boutique could still be 5,000 stores. if you're looking in starbucks they're investing in their brand. i think we can be at that level comfortably within the next ten years, hopefully we can do it faster how do you maintain the experience but we've been quite successful in our first four years. >> where do you fine your workers? people have been saying to me this is the beginning of the the
tightness of the economy where do you find these people >> people are fascinating about the sub culture of premium coffee >> are you getting -- >> yes, absolutely we are. we offer a more experience and people want to move away from ford animation to be able to have a element menu. they can play with the tools more than they can at starbucks and i think they like working in different types of environments. >> i know from my restaurant there's not as much foot traffic as there used to be. how long are people waiting? >> i think coffee is the contrary to all the movement in the restaurant business. i think people are after the human connection they may not want to be there for the hour part of the daily rich wall they love seeing other people and healthy food i think we're seeing anything just increased traffic the cues to the caves is because
they want to catch up with their friend coffee is a social media and in australia getting coffee is where business is done, catching up with friends and family, time for yourself. >> last question, a lot of big companies watch the show, if they watch nick stone is blue stone lane for sale? >> i don't think it's for sale right now. we're very early on. we passed our four-year milestone. i've only been full time for a year-and-a-half. who knows from five to ten years we do want to scale overseas i think it's a great opportunity for partners to help us. we're young and trying our best so who knows >> i don't know i wish you look. that's nick stone, founder of blue stone lane. i'm taken. "mad money's" back after the break.
sound, and then the "lightning round" is over are you ready? time for the "lightning round. start with doug in georgia >> caller: hey jim thank for taking my call >> of course how are you >> caller: doing fine thank you. i own shares of oracle they reported earnings last month which were good but they have been sideways down since then >> yeah but its spiked up to 52 i think it's falling back if the buy back i like the course of business. i think your fine. allen in texas >> caller: yes, i have a stock it's ally. >> i'm not going to fool around, we got jp morgan doing great over 100, we got city which is my travel trust. buy on that. peggy in new orleans >> caller: i have roughly 10% of
my 401 (k) in one particular stock and i've been advised that's too much. i'm trying to find an exit point for that but the stock has been losing ground rapidly and i was wondering if i should keep some or get rid of it all now or wait >> what is the stock >> caller: chtr. >> charter it's, i think you're okay with charter. a lot of people worried about these companies but they do have good businesses i'm not going to sanctions cutting down, you're fine bob in maryland. >> caller: spare time here how about zom knows? >> i think dominos is doing well let's go to inez in florida. >> caller: good evening jim.
hormel. >> we don't recommend a lot of foot stocks here we like pepsico, that's about it brad in virginia >> caller: hey jim, how are you doing today? >> i'm good how about you brad >> caller: pretty good i'm looking at mmp >> prk pm -- mmp has a 5% yield, my travel stock owns it. i suspect it's going to go down along with other companies they're under a lot of pressure. i like them. don in massachusetts >> caller: hey gym how are you doing? >> good how about you, don >> caller: doing great thanks. i want to say jim kaul and david do great with squawk on the street >> thank you how can i help. >> caller: what are your thoughts on ellf >> i like it but else stay
lauder is the better that ladies and gentlemen is the conclusion of "lightning round." 5 years, hmm. you ever call your broker for help? >>once, when volatility spiked... and? >>by the time they got me an answer, it was too late. td ameritrade's elite service team can handle your toughest questions right away- with volatility, it's all about your risk distribution. good to know. >>thanks, mike. we got your back kate. >>does he do that all the time? oh yeah, sometimes he pops out of the couch. help from real traders. only with td ameritrade. expestandard.e lexus rx with advanced safety. lease the 2017 rx 350 for $399 a month for 36 months. experience amazing at your lexus dealer. opeople you don't know actuallye care about you. to protect what you love, call 1-800-adt-cares
fantastic but ready to take over in a moment's notice except it doesn't work for many of these companies, ecommerce is unpredictable, expensive and not ready for prime time in many case it's not ready for anything other than giving the executives something they can tell wall street, make it sound like their company's still relevant it seems like the story is playing out in all ways. we saw it in the apparel business when sports authority went over. the company sells these products, they're ready with all new channels, directive consumer the business that was lost of sports authority seemed to have vanished the glut of unsold inventory gapped the whole industry, hurting the price points of everything sold in these stores, even the jordans now the same thing's hang with
toys last night we interviewed brian goldman, he's the ceo of hasbro. he made a fortune temporary shareholders even he, as good as he is couldn't be ready for the recent snap bankruptcy of toys "r" us everyone expect the retailer for whatever file it would be after the holidays cost a disruption in the toy channel which was too big and too fast for the direct consumer channel to make up for there you go again with inventory all over the place, not to mention merchandise but when the largest vender in your industry goes under like a sports authority or toys "r" us. our finish bad like a foot locker or sears. figure how much merchandise should be out there, too little means your settling for easy sells.
with the challenge to bricks and mortar i think it's too easy to call i first saw this disaster with newer brands companies well run, ceo mike probation. unfortunately rather than ringing the register the whole position had a profit. we trusted pull k to gave nate the channel. he was way ahead of the game when it came to direct skpur trading, but then sports authority went under then the targets and the polls and the walmarts of the world start to be destructed, with weaker numbers then hurricanes hit, the price of plastic surge next thing you know, pole k director consumer business concouldn't make up, he was no
longer selling brick & mortar. this whole chain leads me to believe if you're selling to a brick & mortar business but also developing a ecommerce strategy on the side you're playing a form of defense that hurts your margins. put simply, other than amazon and maybe walmart the channels have been a bear of thing for more involved. the more investors realize the perils of online markets far outweigh the benefit the more they'll be able to save and not lose money stick with cramer. he hospital, the hospital must come to the patient. stay with me, mr. parker. the at&t network is helping first responders connect with medical teams in near real time... stay with me, mr. parker. ...saving time when it matters most. stay with me, mrs. parker.
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