Jim Cramer talks navigating the markets reaction to the latest tariff news

00:10:22
https://www.youtube.com/watch?v=euwbU0SpZQQ

Summary

TLDRIn this episode of Mad Money, Jim Cramer discusses the recent tariffs imposed by President Trump, particularly a 25% tariff on cars and trucks from Korea and Japan, which could lead to inflation and impact the stock market. He notes that while the Dow fell significantly, the market remains overbought, and the tariffs may benefit domestic automakers like Ford and GM. Cramer emphasizes the unpredictability of these tariffs and their potential for renegotiation. He also highlights the importance of the budget bill, which could stimulate the economy despite increasing the national debt. Cramer advises investors to be patient and look for buying opportunities in the current market environment.

Takeaways

  • 📈 Tariffs raise prices on imports, impacting inflation.
  • 📉 The stock market reacted negatively, with a significant drop.
  • 🚗 Domestic automakers may benefit from higher tariffs on imports.
  • 💼 Cramer believes tariffs are starting points for negotiations.
  • 📊 The budget bill could stimulate economic growth despite debt.
  • 🛠️ Investors should be patient and look for buying opportunities.
  • 💡 Micron is a stock to watch for AI market potential.
  • 🔄 Tariff numbers may change during negotiations.
  • 📉 The market remains overbought, indicating caution is needed.
  • 🌍 Cramer emphasizes the importance of strong employment in the economy.

Timeline

  • 00:00:00 - 00:05:00

    Cramer discusses the impact of President Trump's recent tariffs on imports from various countries, particularly focusing on the auto industry. He notes that a 25% tariff on cars from Japan and South Korea could lead to inflation and a significant pullback in the stock market, with the Dow dropping 432 points. Despite this, he suggests that domestic automakers like Ford and GM could benefit from reduced competition, although the market's reaction has been mixed. Cramer emphasizes the unpredictability of these tariffs and their potential effects on trade negotiations, particularly with China, which he views as a more significant issue than tariffs on other countries.

  • 00:05:00 - 00:10:22

    Cramer shifts focus to the broader implications of Trump's trade policies, suggesting that the ultimate goal is to boost exports of American goods rather than just protect domestic manufacturing. He highlights the importance of the recent budget bill, which he believes will stimulate the economy despite adding to the national debt. Cramer advises caution in the stock market, indicating that while some stocks may be overbought, there are still opportunities for investment, particularly in companies like Micron. He encourages viewers to remain patient and look for better buying opportunities in the current market environment.

Mind Map

Video Q&A

  • What is the impact of tariffs on the auto market?

    Tariffs raise prices on imported vehicles, potentially causing inflation and affecting stock prices.

  • How did the stock market react to the new tariffs?

    The Dow fell 432 points, indicating a significant pullback, but the market remains overbought.

  • What is Cramer's view on the recent tariff announcements?

    Cramer believes the tariff numbers are just starting points for negotiations and may not be final.

  • What should investors do in response to the current market conditions?

    Cramer advises patience and suggests looking for buying opportunities as the market is overbought.

  • How do tariffs affect domestic automakers?

    Tariffs could benefit domestic automakers by making imported vehicles more expensive.

  • What is the significance of the budget bill mentioned by Cramer?

    The budget bill includes provisions that could ignite the economy despite adding to the national debt.

  • What stocks does Cramer suggest buying?

    Cramer mentions stocks of American companies that produce big-ticket items, like Boeing and GE.

  • What is the overall sentiment in the market according to Cramer?

    Cramer believes the market is strong due to employment and economic growth, despite tariff concerns.

  • What is the long-term outlook for Micron according to Cramer?

    Cramer suggests buying Micron stock gradually as it has potential in the AI market.

  • What does Cramer think about the unpredictability of tariffs?

    Cramer finds the tariff announcements inconsistent and believes they may change during negotiations.

View more video summaries

Get instant access to free YouTube video summaries powered by AI!
Subtitles
en
Auto Scroll:
  • 00:00:02
    now.
  • 00:00:27
    >> Hey I'm Cramer. Welcome to
  • 00:00:29
    Mad Money. Welcome to Cramerica.
  • 00:00:30
    I've been making friends. Geez
  • 00:00:31
    I'm just trying to save a little
  • 00:00:34
    bit of money here. My job is not
  • 00:00:35
    just to entertain educate put in
  • 00:00:38
    context. So call me at one 800
  • 00:00:39
    703 CNBC or tweet me JimCramer.
  • 00:00:41
    Tariffs do matter. They raise
  • 00:00:44
    prices almost immediately. If
  • 00:00:48
    you slap a 25% tariff on all of
  • 00:00:50
    the cars and trucks we import
  • 00:00:52
    from Korea and Japan. You're
  • 00:00:53
    talking about roughly 17% of the
  • 00:00:55
    vehicles sold in the US last
  • 00:00:56
    year. Today President Trump did
  • 00:00:59
    precisely that, which would be a
  • 00:01:00
    25% price increase on about one
  • 00:01:02
    sixth of the US auto market. And
  • 00:01:04
    that's on top of the existing
  • 00:01:06
    tariffs on everything from Japan
  • 00:01:08
    and South Korea. Now that's big
  • 00:01:10
    enough to cause some inflation,
  • 00:01:11
    which is a major reason why the
  • 00:01:13
    average is rolled over today.
  • 00:01:14
    Dow tumbling 432 points, S&P
  • 00:01:17
    falling 0.79% and the Nasdaq
  • 00:01:19
    losing 0.92%. That's a
  • 00:01:22
    significant pullback. But you
  • 00:01:23
    know what. A few months ago I
  • 00:01:25
    would have expected a much
  • 00:01:26
    bigger decline in the stock
  • 00:01:28
    market on this news. Keep in
  • 00:01:29
    mind we have a big persistent
  • 00:01:31
    trade deficit with both Japan
  • 00:01:32
    and South Korea. You tackle a
  • 00:01:34
    big tariff on imports from those
  • 00:01:36
    countries. And suddenly about
  • 00:01:37
    17% of vehicles made there and
  • 00:01:39
    sold here are priced out of the
  • 00:01:40
    market. In other words, this is
  • 00:01:42
    great news for domestic
  • 00:01:43
    automakers. Ford GM should be
  • 00:01:45
    able to clean up both their
  • 00:01:47
    stocks went down today. Sounds
  • 00:01:50
    like not everybody believes that
  • 00:01:53
    wasn't all. That wasn't all
  • 00:01:54
    Trump did at all. He put a 25%
  • 00:01:57
    tariff on imports from
  • 00:01:58
    Kazakhstan, 30% tariff on South
  • 00:02:00
    Africa, 40% tariffs on Laos and
  • 00:02:03
    Myanmar, the country formerly
  • 00:02:04
    known as Burma, which would have
  • 00:02:06
    been easier to pronounce if this
  • 00:02:08
    had happened in March or April.
  • 00:02:09
    The averages would have been
  • 00:02:10
    down a heck of a lot more than
  • 00:02:13
    three than 1%. I'd say three,
  • 00:02:14
    maybe four. So as the market
  • 00:02:15
    just ignoring these numbers. Not
  • 00:02:18
    necessarily. It's possible that
  • 00:02:20
    when we digest these new tariffs
  • 00:02:22
    on top of others that are
  • 00:02:23
    coming, more sellers might
  • 00:02:25
    appear. Even after today's
  • 00:02:27
    pullback. The market remains
  • 00:02:28
    very overbought. We are
  • 00:02:30
    vulnerable if more countries
  • 00:02:31
    refuse to play ball with
  • 00:02:32
    President Trump on trade,
  • 00:02:33
    they're going to get some very
  • 00:02:35
    similar letters from the white
  • 00:02:36
    House. And Wall Street doesn't
  • 00:02:37
    want to see that. But you know
  • 00:02:39
    what? The last time the stock
  • 00:02:41
    market got this overbought, we
  • 00:02:42
    had a similar sell off. Like
  • 00:02:44
    like this. And the next day then
  • 00:02:45
    a week later we were up 3%. So
  • 00:02:47
    if you sold at these overbought
  • 00:02:49
    levels you missed out a big
  • 00:02:51
    move. At this point we've been
  • 00:02:53
    conditioned to buy not sell. And
  • 00:02:55
    weakness which is just by road
  • 00:02:57
    and including tariff induced
  • 00:02:58
    weakness. That's part of the
  • 00:03:00
    psychology. A bigger part
  • 00:03:01
    though, these tariff letters are
  • 00:03:03
    starting to feel a little like a
  • 00:03:05
    visit from Borat. You aren't
  • 00:03:07
    sure whether they hold up under
  • 00:03:08
    close scrutiny, especially the
  • 00:03:11
    one to adapt to Kazakhstan. It's
  • 00:03:13
    like they're picking a tariff
  • 00:03:15
    hat, picking numbers out of a
  • 00:03:16
    tariff hat. What can I say? I
  • 00:03:18
    have mine Kazakhstan. Let's see.
  • 00:03:21
    Oh, geez, we crushed them 80%.
  • 00:03:23
    Wow. Malaysia. What do they get?
  • 00:03:25
    What are they going for? Oh
  • 00:03:30
    32.44% a little more specific
  • 00:03:31
    for Malaysia. Myanmar? Oh, I've
  • 00:03:33
    always wanted to know what the
  • 00:03:33
    what they're going to be for. O,
  • 00:03:37
    my. 45%. That's a lot. Oh my
  • 00:03:39
    God. Well I've got it. I've got
  • 00:03:41
    Oceana. Oceana is getting 40.
  • 00:03:43
    All right. How about Eurasia?
  • 00:03:45
    That's a good 140 9.9. And then
  • 00:03:47
    finally Fredonia, maybe the most
  • 00:03:49
    important country of all,
  • 00:03:52
    39.42%. Fredonia. Not bad. They
  • 00:03:54
    got away with a lot. Now nobody
  • 00:03:56
    knows whether to take them
  • 00:03:58
    seriously, I obviously don't. If
  • 00:03:59
    I talked about two countries in
  • 00:04:00
    1984 and a third for the Marx
  • 00:04:02
    Brothers, we have all sorts of
  • 00:04:03
    due dates. We have all sorts of
  • 00:04:05
    percentages. We have little
  • 00:04:06
    consistency. Japan and Korea
  • 00:04:07
    make a lot of cars here. But
  • 00:04:09
    like with Apple, which has
  • 00:04:11
    pledged to invest $500 billion
  • 00:04:11
    across America, building things
  • 00:04:13
    here does not get you in the
  • 00:04:15
    president's good graces. There
  • 00:04:16
    is no immunity in this tariff
  • 00:04:18
    survivor game, because these
  • 00:04:19
    numbers seem all over the place
  • 00:04:21
    in the white House has
  • 00:04:22
    repeatedly postponed or reduced
  • 00:04:23
    its tariffs. It's really hard to
  • 00:04:25
    tell what's happening and how
  • 00:04:26
    many tariffs will be
  • 00:04:27
    renegotiated, how much will go
  • 00:04:28
    through potentially causing
  • 00:04:29
    inflation and making it harder
  • 00:04:30
    for the Federal Reserve to cut
  • 00:04:32
    interest rates. How much does
  • 00:04:33
    any of this even matter? Big
  • 00:04:35
    picture compared to our trade
  • 00:04:36
    deficit with China, our trade
  • 00:04:37
    deficits with these other
  • 00:04:39
    countries are practically chump
  • 00:04:40
    change. My view is worth 25%
  • 00:04:44
    plus. Again, every one of these
  • 00:04:47
    new tariff proposals could be
  • 00:04:47
    lowered as part of negotiation.
  • 00:04:49
    It's all scattered. Who knows
  • 00:04:50
    what will happen next. We're
  • 00:04:51
    gone. We're done. I think that
  • 00:04:53
    there are a lot of
  • 00:04:55
    misunderstandings about these
  • 00:04:56
    announcements. You have to go
  • 00:04:58
    back to what Trump said when he
  • 00:04:59
    was running for president. This
  • 00:05:00
    is really important because
  • 00:05:02
    people forget. I went over this
  • 00:05:03
    with Peter Navarro, a trade rep
  • 00:05:04
    today. If people are missing
  • 00:05:06
    what he first said back then,
  • 00:05:07
    President Trump said that our
  • 00:05:08
    trading partners took advantage
  • 00:05:09
    of us by buying nothing from us
  • 00:05:11
    and then demanding that we put
  • 00:05:13
    up plants at their country. So
  • 00:05:14
    they want to do business there.
  • 00:05:16
    And that was very bad and very
  • 00:05:18
    understandable for most of
  • 00:05:20
    America. Now he's saying these
  • 00:05:21
    countries don't buy enough from
  • 00:05:22
    our country anyway. Maybe when
  • 00:05:23
    they see these tariffs, they'll
  • 00:05:25
    maybe they'll buy something as a
  • 00:05:27
    gesture of good faith. That
  • 00:05:28
    means you want to buy the stocks
  • 00:05:29
    of American companies that make
  • 00:05:30
    big ticket items that you can't
  • 00:05:33
    get elsewhere. I'm talking about
  • 00:05:33
    Boeing planes, huge turbines
  • 00:05:35
    from GE, machinery from John
  • 00:05:35
    Deere caterpillar, Cummins that
  • 00:05:38
    that's what countries will have
  • 00:05:39
    to do. They'll have to buy that
  • 00:05:41
    stuff to get into President
  • 00:05:43
    Trump's good graces. And that's
  • 00:05:44
    what this is really about. How
  • 00:05:46
    can I talk about buying anything
  • 00:05:48
    in this environment? Because I
  • 00:05:49
    think Trump's ultimate goal with
  • 00:05:50
    these tariffs isn't to force
  • 00:05:51
    companies to build new plants
  • 00:05:53
    here anymore. It's simply to
  • 00:05:54
    sell more stuff overseas. Be
  • 00:05:56
    good. Be good trading partners.
  • 00:05:57
    That's good for profits. It's
  • 00:05:59
    good for stocks. It's bullish.
  • 00:06:00
    How about all the cars that
  • 00:06:01
    Japan and Korea make here. The
  • 00:06:03
    white House seems to believe
  • 00:06:04
    that those foreign automakers
  • 00:06:05
    basically do most of their
  • 00:06:07
    manufacturing overseas. Then
  • 00:06:08
    they assemble the cars here. The
  • 00:06:10
    intellectual property, the big
  • 00:06:11
    engines, that stuff. It's all
  • 00:06:12
    made over there putting the
  • 00:06:14
    bodies here. So again, there's
  • 00:06:15
    no immunity for doing business
  • 00:06:16
    here when it comes to trade,
  • 00:06:18
    because the president thinks
  • 00:06:19
    that almost everyone is a bad
  • 00:06:21
    actor when it comes to
  • 00:06:22
    exploiting our country. And you
  • 00:06:23
    know what? I think most
  • 00:06:24
    Americans agree. Now, aside from
  • 00:06:26
    trade policy, I believe what
  • 00:06:28
    really matters here are the
  • 00:06:29
    provisions of the big bad budget
  • 00:06:31
    bill, even though it will add
  • 00:06:32
    trillions to the national debt.
  • 00:06:33
    Not happy about that. This
  • 00:06:34
    legislation is full of stuff
  • 00:06:36
    that will ignite the economy.
  • 00:06:37
    All sorts of accelerated expense
  • 00:06:38
    write offs that will cause a
  • 00:06:39
    huge a fire hose of
  • 00:06:42
    construction. With all of that
  • 00:06:43
    on the way, it's hard to really
  • 00:06:44
    get worried about these trade
  • 00:06:46
    negotiations. And that's why the
  • 00:06:47
    stock market can't collapse.
  • 00:06:49
    That is strong employment. More
  • 00:06:51
    on that later. So let me tell
  • 00:06:52
    you what we're doing for the
  • 00:06:54
    charitable trust. We no longer
  • 00:06:54
    believe that the tariff numbers
  • 00:06:56
    for the president swung around
  • 00:06:57
    are meaningful. They're just a
  • 00:06:59
    starting point for negotiations
  • 00:07:00
    with countries that really need
  • 00:07:02
    access to our markets. With
  • 00:07:03
    tariffs be inflationary right
  • 00:07:04
    now the market is trading like
  • 00:07:06
    it doesn't matter. It's not
  • 00:07:07
    going to influence Jay Powell as
  • 00:07:09
    much as you might expect because
  • 00:07:11
    it seems very one off. Of
  • 00:07:11
    course, if these numbers are the
  • 00:07:13
    real numbers then yes, it's
  • 00:07:15
    going to be a bit of a problem.
  • 00:07:17
    But nobody believes they're the
  • 00:07:19
    final numbers. So we're making
  • 00:07:19
    some small sales with the trust
  • 00:07:20
    in order to take advantage of
  • 00:07:23
    the profits that others want to
  • 00:07:23
    want to take. I look, I don't
  • 00:07:25
    wanna be glib. I know we're
  • 00:07:26
    staring down the barrel of a
  • 00:07:28
    tariff gun, but if I'm right
  • 00:07:30
    that the president's game plan
  • 00:07:31
    is really to help our
  • 00:07:32
    manufacturers export more
  • 00:07:34
    merchandise, it's hard to make
  • 00:07:34
    the case that we need to do
  • 00:07:36
    really huge amount of selling
  • 00:07:37
    here. Unless you're ringing the
  • 00:07:39
    register on something that's had
  • 00:07:40
    a huge run or something that's a
  • 00:07:42
    dog and didn't move at all. But
  • 00:07:44
    the bottom line, when the only
  • 00:07:46
    stock that's down enough to
  • 00:07:47
    create a real price break is
  • 00:07:48
    Tesla, largely because Elon Musk
  • 00:07:50
    trying to get back into politics
  • 00:07:51
    instead of humanoids, it's tough
  • 00:07:54
    to pull the trigger. Maybe if
  • 00:07:57
    we're patient, we'll get a
  • 00:08:00
    better buying opportunity. That
  • 00:08:03
    was a bad number. 32.4 was bad
  • 00:08:05
    number. So why don't we start
  • 00:08:07
    with Chris in North Carolina?
  • 00:08:09
    Chris.
  • 00:08:10
    >> Hey, Jim. How are you doing?
  • 00:08:12
    >> I'm doing well. Chris, how
  • 00:08:14
    are you doing?
  • 00:08:14
    >> Very well. Hey, I know Nvidia
  • 00:08:16
    dominates all the talking
  • 00:08:18
    points, but I'm heavy on micron.
  • 00:08:20
    Last three years has been up
  • 00:08:22
    50%. I'm also in Nvidia. Last
  • 00:08:24
    two years has been up 100%. But
  • 00:08:26
    I'm wondering with micron making
  • 00:08:29
    both Nand and Dram memory chips,
  • 00:08:31
    aren't they in a better position
  • 00:08:33
    to dominate AI over the next 5
  • 00:08:34
    or 10 years?
  • 00:08:36
    >> I can't tell you how glad I
  • 00:08:37
    am that you brought up micron.
  • 00:08:39
    Micron stock ran up huge into
  • 00:08:41
    the print, so to speak, and then
  • 00:08:43
    when the print came out, it was
  • 00:08:45
    excellent. Since then the stock
  • 00:08:46
    has been going down. We've seen
  • 00:08:47
    this pattern before, by the way.
  • 00:08:49
    You know we saw the same pattern
  • 00:08:51
    in TJX. It's rather remarkable.
  • 00:08:52
    It took far longer to settle
  • 00:08:53
    down than I thought. Micron you
  • 00:08:56
    buy some tomorrow and then you
  • 00:08:57
    buy some. Then you wait a 10%
  • 00:08:59
    interval. I'm not getting 10%
  • 00:09:01
    because I don't know where the
  • 00:09:02
    bottom of this thing is. But you
  • 00:09:03
    can start tomorrow because it's
  • 00:09:05
    down that much from the high
  • 00:09:07
    right. And today's sea of red,
  • 00:09:08
    it don't see a lot of areas
  • 00:09:10
    where we've proven to sell, but
  • 00:09:12
    we still have to be patient for
  • 00:09:13
    some buying opportunities. We
  • 00:09:15
    need some cash. I mean the
  • 00:09:17
    market is very overbought and
  • 00:09:18
    some wow. That's a very specific
  • 00:09:20
    number 32.44 I wonder who that
  • 00:09:22
    belongs to on Mad Money tonight
  • 00:09:24
    core we've announced its
  • 00:09:25
    acquisition of Core Scientific
  • 00:09:26
    and a $9 billion all stock deal.
  • 00:09:28
    And I'm hearing more about the
  • 00:09:29
    vision the combined companies
  • 00:09:31
    with core. We've co-founder and
  • 00:09:32
    CEO Mike Intrator. Then the
  • 00:09:33
    Labor Department's nonfarm
  • 00:09:35
    payrolls can tell you a lot
  • 00:09:35
    about the state of this market.
  • 00:09:37
    I'm going off the charts with
  • 00:09:39
    the legendary Larry Williams to
  • 00:09:40
    read the labor market tea
  • 00:09:42
    leaves, and you did stump me
  • 00:09:43
    with this Laniado doctors. I did
  • 00:09:44
    the homework over the long
  • 00:09:46
    weekend and I'm ready to share
  • 00:09:47
    my thesis. So stay. So 45% are
  • 00:09:49
    going to stay with Cramer.
  • 00:10:04
    >> Don't miss a second of Mad
  • 00:10:05
    Money Follow JimCramer on X.
  • 00:10:08
    Have a question tweet Cramer
  • 00:10:10
    hashtag mad mentions. Send Jim
  • 00:10:12
    an email to madmoney.cnbc.com.
  • 00:10:15
    Or give us a call at one 800 743
  • 00:10:19
    CNBC. Miss something. Hea
Tags
  • Tariffs
  • Stock Market
  • Inflation
  • Domestic Automakers
  • Trade Deficit
  • Economic Growth
  • Budget Bill
  • Investing
  • Micron
  • Cramer