- CNBC’s Jim Cramer says it’s a positive sign that bank stocks rallied after Federal Reserve Chairman Jerome Powell announced the central bank would issue a quarter-point cut in the federal funds rate.
- The “Mad Money” host tries to make sense of trouble that appears to be on the horizon for Adobe and FedEx.
- He goes one-on-one with the CEOs of Canadian cannabis company Cronos Group, farming equipment maker Agco and technology distributor Tech Data.
Why it’s good that bank stocks rallied on the Federal Reserve’s interest rate cut
Federal Reserve Chairman Jerome Powell gives a news conference as traders work on the floor of the New York Stock Exchange on September 18, 2019.
Spencer Platt | Getty Images
Bank stocks rallied after the Federal Reserve approved a quarter-point cut to interest rates, and that’s a “very positive” sign, CNBC’s said Wednesday.
The (KBE) managed to climb 0.68% at session end, in response to the central bank’s decision to reduce the benchmark lending rate to a target range of 1.75% to 2%. Among the largest banks by market cap, J.P. Morgan Chase and Citigroup were the biggest gainers, posting 1% and 0.88% increases, respectively.
The market saw “people buying the bank stocks because there’s a chance [Fed Chair Jerome] Powell’s rate cuts may put an end to this artificially inverted yield curve, and at the same time he’s committed to preventing the economy from slipping into a credit-ruining recession,” the “Mad Money” host said. “Powell’s not planning to slam his foot on the gas pedal. He’s just gently tapping it to make sure the economy doesn’t slow down too much, and that works for the banks.”
E-commerce is weighing on FedEx and Adobe’s ability to forecast sales
A FedEx employee loads up deliveries in San Francisco.
Shares of Adobe dropped nearly five points in Wednesday’s session after the company offered shareholders soft guidance in its quarterly report.
FedEx‘s stock plummeted more than 22 points in the same trading day after missing on earnings and cutting its 2020 forecast.
Cramer attributed the weakness to emerging competition in e-commerce, which he said is impacting management’s ability to gauge the future.
Agco CEO brings a combine on campus, talks tariffs impact with Cramer
Fendt Ideal Combine
Adam Jeffery | CNBC
Agriculture is a sector of the American economy that has been impacted heavily by the U.S.-China trade war, but Agco has been able to avoid a lot of those side effects, CEO Martin Richenhagen told Cramer.
That’s because the Georgia-based manufacturer of farming equipment has strategically established large international exposure, Richenhagen explained in an interview.
“This is the advantage and that is by purpose. We always wanted to be globally diverse,” he said.
– Reporting by Kevin Stankiewicz
Small and medium-sized business investing appears stronger than large enterprise investing
Richard Hume, CEO of Tech Data
Adam Jeffery | CNBC
The head of an IT products and services distributor told CNBC that small- and medium-sized businesses have not slowed down investing like larger corporations, and it’s showing up in the company’s results.
“Anecdotally, we think SMB is much stronger than large enterprise [now] … and we’re taking advantage of that,” Tech Data CEO Rich Hume said in a sitdown with Cramer. “In tech, something is always hot. We can move to where the demand is quickly.”
The comments came on the same day that the Federal Reserve cut the benchmark interest rate. The policymaking Federal Open Market Committee noted that consumer spending is “rising at a strong pace,” but “business fixed investment and exports have weakened.”
Differentiating nicotine vaping and cannabis vaping
Mike Gorenstein, founder and CEO, Cronos Group
Brendan McDermid | Reuters
Canadian cannabis company Cronos has seen its stock price cut more than half since earlier this year as the entire marijuana industry lagged in recent months. As the U.S. government and states take action to address fears about vaping in the country, Cronos CEO Mike Gorenstein told Cramer that there is a difference in vaping tobacco and marijuana.
His company has plans to launch vape products in the Canadian market in the near future.
“What we’ve been doing, you know, over the last few months is really leveraging work — for about 6 years that’s been done in Israel — with Cronos Device Labs and actually focusing on safety, quality, what the ingredients are,” Gorenstein said about Cronos’ soon-to-be released Spinach brand. “We picked the name because we wanted to make sure it was we’re being very responsible not attractive to children.”
Cramer’s lightning round
In Cramer’s lightning round, the “Mad Money” host zips through his thoughts about callers’ favorite stock picks of the day.
Trade Desk: “I think Trade Desk is oversold. I mean, remember, this is one of those stocks part of this whole cohort that people have been giving up on. I haven’t given up on it, but you’ve got to understand: it is very volatile.”
Zynex: “I like the device. Let me do some work on the stock. I like the device. That’s not enough to be able to say I like the stock, and everyone should know that.”
: “I am a big believer in [CEO] Larry Culp. I don’t think that this is the year that it’s going to happen. I do think that by next year at this time it will be higher. A lot of people don’t have that kind of patience.”
Disclaimer: Cramer’s charitable trust owns shares of Citi and JPMorgan Chase.