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tv   Mad Money  CNBC  July 11, 2016 6:00pm-7:01pm EDT

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just beating the tar out of that guy. >> beakers. >> listen, i would go to japan, right? you've got a currency tail wind and stimulus. >> steve. >> thanlgs for watching. see you back here tomorrow at 5 a:00. "mad money" starts right now. 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, and i promise to help you find it. "mad money" starts now. hey, i'm cramer. welcome to mad money. welcome to cray america. other people want to make friends. i just want want you to make money. call me at 1-800-743-cnbc or tweet me@jimcramer. new highs, new all-time highs!
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♪ hallelujah what explains this reversal of fortune from just a couple weeks ago to where we are now? unless we understand how we got here, we can't know where we're going. we need you to know the facts so they can buttress the story. first, we got brexit wrong! [ buzzer ] just plain wrong. what was wildly hailed as a disaster, something that the alarmists explained was the end of the world, turned out to be the best thing that could happen in the fry markets. one, we had an unforeseen event that big hedge funds simply weren't ready. that meant a lot of fund managers were betting the wrong way going in. that triggered selling. two, brexit was something few
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people understood. if britain voted to exit the european union, it was bad for all stocks. if it voted to stay, that was good. you had a huge number of hedge fund managers pull out of the stocks because they thought they were on the wrong side of the trade. some thought they had to get short stocks because the sky was falling. something that was sadly aided, saided and aided and abetted by alan greenspan. it was a one-two punch of institutional and individual ca pit yewlation. what did brexit do. how did this hard-to-understand event really impact or markets? simp simple. it took our interest rates down
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lower than we would have expected and iced the federal reserve who would have put in an interest rate hike that would have obliterated. the demand for loans simply went away in one fell swoop. now i have a simple formula for managing these largely inkpree hence nl events from overseas. i call it the bristol-myers. i pick on bristol-myers because they do a lot of things right. a kickout of greece or a run on the banks in cyprus all cause massive runs here. this time, there was an actual impact. brexit made the stock of bristol-myers more valuable in a
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multitude of ways. first, with interest rates lower, the stocks did become more attractive. 2% yield looks better. worldwide turmoil breeds a flight to safety of which bristol-myers is a perfect example. and it's a drug stock. hey, you know what? foreign drug stocks sell. the rest of the word might be slowing, we've seen an acceleration. the jobs report was an unmitigated positive in a number of ways. rather than selling off on the unemployment numbers which has happened for years. good news for once was considered good news. you combine that job growth with another overlooked number that came out last week, this is an increase in treadity tacredit t americans, not only are more people getting jobs, but jobs seem to be plentiful, but they're able and willing to
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borrow money to finance purchases, including housing, retail, restaurants, more credit means an expanding pie. even if amazon is taking a bigger share of the retail, there's more left over for others. we were so sure the world was going to end post-brexit, out the window! the facts, however, got in the way of this story, big time. when mondelez made a bit to take over hersheys, and white wave foods was purchased for $12 billion. corporate buyers are stepping up to the plate. and fourth prop, hated groups became, well, lesz hated.
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a lot. taft, which had been down for months stopped going down. that's not the same as going up. but the intels and facebooks seem to have exhausted themselves. without short supply, there's no way they can recover without moving upwards. it's almost as if redemption money created its own crescendo. one of the reasons i see seagate running after the beaten-down disc drive maker, the same things seems to be happening. maybe the selling's done. finally, we're beginning to realize that no matter who's elected in november, it could be better for stocks than in the current administration. friendly. name me one ceo who's friends with president obama. just one. i can't think of any.
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that's going to change. i can't say there won't be calls for more taxes by the rich by hillary clinton or more protectionism by donald trump. to me, it's good news, and the next dip, people will use it not to sell sell sell but to bye-bye buy. >> caller: a big boo-yah, jim. >> no doubt. >> caller: my question is about barclays. brexit hammered this by 40% in two days. some are calling brexit fears overdone. the pound has stabilized and england has a new prime minister. is it time to buy barclay's? >> i'm going it say lloyd's is better. it's about $3 and kind of an interesting lottery ticket. a lot of people play those games, i don't know, the mega
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millions? lloyd's is like a mega three going to four. i think you're barking up the right tree there, carl, in chi town. how about caroline? >> caller: hey, jim, a very big thank you. a large part of my retirement is in netflix. what is your thinking on the partnership with comcast and the competition they're up against? >> i don't think comcast stock, which i work for, is that important. my friend doug kass is saying this is the sell of the week in real money pro, over at the street. netflix, i think there's value here. i know right now the numbers seem too high. so can you handle that? i don't know. i'd prefer you to see bae in comcast. >> caller: professor cramer, pack yourself on the back,
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whitewave foods, boo-yah to you, my friend. >> thank you! ♪ hallelujah >> caller: i've accumulated 2,000 shares sense you first touted whitewave way back when. all i can say is thank you, and you nailed it. >> i know it's a little wild, but it really panned out when it plit off from dean foods. >> caller: with all the m&a that's going on in the packaged food space, this being one of them, which of the packaged food companies have the investable growth that very few of them have that you talk about so much with maybe a potential takeover kicker at the back end? >> i got to tell you, whitewave was the only one. i know some feel if hane comes back, i'm going to thank you for the kind words and i'm glad you
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bought the 2,000 shares. carmine in new york. >> caller: hi, jim. thanks for taking my call. >> of course. >> caller: jim, i own yahoo stock. not long ago, star blood was looking to replace many of the board members and they reached a compromise and added four or five new members, among them mr. rick hill. during one of your broadcasts you gave a very positive commentary about mr. hill stating he was one of the best money makers and a real game changer. >> absolutely. >> caller: and that's a powerful statement. and having the right leadership at the top is paramount, especially in yahoo's case. >> if hill becomes chairman, i think you have to buy yahoo. if not, the upside may be very limited. >> rick hill for chairman of
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yahoo! >> on "mad money" tonight, there are ten stocks that tell the sale in whether this rally's at an a all-time high. wall street just wrapped up its break. i'm calling out the best and worst to help you prepare for what's next. and 42-38 ain't that bad for the phillies. stay with cramer! don't miss a second of "mad money." follow@jimcramer on twitter. have a question? tweet cramer, #madtweets. send jim an e-mail at cnbc.com or give us a call at 1-800-743-cnbc. miss something? head to madmoney.cnbc.com.
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after the amazing run we've had over the past two weeks, we need to ask ourselves, is this
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rally the real deal? how do you till the difference between a genuine, sustainable rally versus an ephemeral bounce caused by short cover? there are certain stocks that represent real in bull market. this market's going to have a hard time attracting true believers. so let me give you my list of ten big name laggers that need to start turning into leaders. if this rally's going to have any legs beyond what we saw today. first, is real household names here, alphabet. it's commonly known as google. stock down nearly 7% on the year. you can follow it, action alerts. it sells at 18 times earnings, with an amazing balance sheet. $75 billion cash position. it's still perceived as one of those companies that's lost its
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ability for any surprise. it's had subtle number cuts. call it death by a thousand cuts. and while it's pervasive and co dominant, the conventional wisdom is that the company's best days are behind it. i find that hard to believe, but this is not a stock that analysts push very often anymore, ynd the occasional half-hearted reiterate buy. alphabet's more than sujust a search company. it's you the people generating the content for them. can't figure it out. european government investigation, too much strong dollar down side? it's just not adding up. i think the stock's too cheap to ignore, but i've been wrong. the second necessary component for a sustainable rally? apple.
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this one's worse than alphabet in that even the bulls pretty much hate it. a guy who loves it, doesn't down grade it. i don't know. i know that none do with this multiple in tact. the problem, it's unlikely apple will make this year's estimates, though everyone who follows the stock has a darn buy rating on it. until they get downgrades from analysts who have lost faith in the company there's not much hope for the company to break out to the upside. as goes broad com. i say own apple, don't trade it. this is a stock that requires tremendous patience. if it doesn't, i don't know how
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high it can go. third, pick an airline, any airline. american airlines down nearly 27%. delta, 25! nobody's going to say we've got a bull market going here, let alone new bull market. the airlines have to put on a sustained advance if this market's going to continue to climb. this is not a impossible task. southwest is down only 7.4%. there's hope for the transports, but at least southwest has to break into the black for me too believe th -- to believe that's the one to count on. we need starbucks stock to stop meandering. it's been stuck in no man's land for so long and has become so frustrated, people will start thinking, yes, by apple, like alphabet, the company's best days are behind it.
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i think they've put serious growth spurts. this is no different. still, it's unnerving to see it stay at the a 55-56 lievel. it's giving its workers pay raises. you've got to see nike break out. but nike's another growth stock that used to be what we expect from a j&j, a united health, a honeywell, a 3m. consistent growth names that give you all-time highs on every move. i think nike's been helped by the fall of sports authority, but again, it's not happenin'. .
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they got crushed along with mastercard with an anti-trust decision came out. but no earnings report, by the way, it shouldn't have impacted the stock that much, but it would be roaring back if people were more sanguine about that decision, but clearly they're not. the seventh stock that needs to rally to make it a convincing bull market? you're familiar with it -- target. it's lost its ability to well, um, grow. that means you have half a dozen companies in retail doing well, amazon, it's knocking the stuffing out of most other retailers. and walmart, including five-day free shipping. tjx, but with home depot and lowe's, you need something else to work in retail besides these names, and i'm looking at
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target, because it's huge, and it was supposed to be the best of the department store discounters. right now it feels like road kill. i put macy's in here. it looks like it's cut in half. number eight is gilead. frankly, i'm not trying to pick any particular biotech. i could have picked regeneron. but gilead's down 15% on the year, truly an eyesore on the market. gilead has all the cash. it does nothing. it needs to do a deal in order to accelerate its growth. regeneron's doing well. i don't know what to say. bull mark number nine? allergan. this is the one drug stock that caused people to lose a huge amount of money, and that's all because the merger with pfizer
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didn't go through. look at that rite aid thing. including the idea that maybe allergan had to do a deal or its growth is going to slow. at least until the company closes, transaction i expect to get done any day now. i've been saying that for a month. i'm concerned. finally, number ten. all we need to see disney to get some traction. the skinny bundle, skin eny bon bill issues aren't slowing. will the bears be right that the cable companies are going to start paying dramatically less to carry espn. that with swamp shanghai disney as well as the film franchises. hey, sorry, they are one and the
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same. here's bottom line. these ten stocks speak volumes about why so many people are skeptical of the move. sure, we've had our post-brexit rebound, but it won't hit home. without them, we're not going to bra break out the levels what a bull market represents to the vast majority of observers. including yours truly. all right, on mad tonight, these stocks were at the about the -- bottom. alcoa kicked off earning season with a wild move. i'm getting to the bottle of that with the ceo. and pokemon may be all the rage, but this's got nothing on the ones that may be profitable for the rest of 2016. i'll reveal what they are. so stick with cramer.
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now that we've officially entered the second half of 2016, with earning season kicking into full gear tonight, yeah, after hitting new all-time highs. i think it's worth looking at the first part of the year. i want to take a rigorous approach, which is why we're going to analyze every single segment. since we're going sector by sector, let's go with the three bullish sectors, all were up double digiting from january to june. utilities, telecommunications and energy cohorts. telecom stocks gained 16%.
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let's start with utilities. they have become the stock gi equivalent of the golden state war yours. the 20% utility run seems to be a slowly, sleepy stock. frankly, i've never seen this before. utilities are the ultimate in safe stocks. their high yields make them alternatives. you can understand why investors would flock to these domestically-focussed companies. making them all the more attractive. almost no one saw that coming. how strong was this group? so strong that every single utility stock in the s&p 500 was up double digits.
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again something i can't recall. so when you drill down the individuals, some did better than others. best of the best was american waterworks, up 41%. this is that public water and wastewater utility we talked an about a couple weeks ago as being red hot. privatized the water systems, selling it to this company to make money. nice source, up 36%. we have edison international. another growth story, stock around 31%. fourth, there's exelon. the largest operator of nuclear power plants. even if people are migrating to burning natural gas. fifth is center point energy. that's a gas and electric utility that operates mostly in the south. what do these winners have in common in they gave you that combination of slow, but okay
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growth and strong dividend yields. after some of these moves, the yields have got and lot less impressive. first energy is a power-generation utility, it was still up 10% in the first half, which beat the stuffings out of the average. group's second worse provider, ppl, pennsylvania power and light, and it does most of its business in the uk. people are worried about cost overruns at new funuclear facilities. meanwhile, you've got a darn fine return from -- any win
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wou -- anyone would be happy to have these in their portfolio. the same themes that propel the utilities higher also propel the telecom stocks and the sector's strength was driven by at&t and verizon. at&t gave the group's biggest gain. that was the big ugly duckling in the group. it's strong dividend, and direct tv, they bought direct tv, which means they bought the nfl ticket, and that's a winner. verizon's up 20.8%. then you have century link up 15%. frontier up nearly 6%. those two have been losing subscribers for ages. finally, there's the worst-performing telecom, that's
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lach lvlt, which you can think of the physical backbone of the internet. but that didn't do good, stock down 5%. that brings us to the third strongest sector, and this is a shocker after all the turmoil since 2014, and that is the energy stocks! ♪ hallelujah >> they had been -- >> the house of pain. >> the house of pleasure. >> the outperformance of energy was all about the rebound in natural gas and oil prices from their february lows. sure, the energy core was up 13% in the first half of the year, but you have to remember it was down 24% last year. natural gas was up 25% over the same period. still, we've seen a major disparity with the production and pipeline plays roaring higher. even as the refineries did terribly.
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which is what you would expect when oil and gas are rebounding. oneok. it got beaten down last year, but rallied more than 92% as business became steadier. people were very worried about this company. second, there's southwestern energy, swn. that's the big company focussed mostly on natural gas, which is why its stock is up nearly 77% in the first half. this is the epitome of rally as southwestern overcame concerns about its health in natural gas. it paid way too much for, frankly for some assets. the third, range resources. rocketed up 75% in the first half.
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fourth, we have another pipeline company, spectra energy. apartment fifth best performer is eqt. up 48.5% how about the losers in energy? tesoro and valero and marathon p. the fourth worst performer was williams companies, down nearly 16%. it got hammered because of a busted takeover, energy trust equity, causing williams to get pole axed. this was an odd one. fmc technologies, a good company, it makes the technology
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needed for offshore drilling. drilling needs to bounce back a lot more for deep water projects to become more lucrative. even though that whole group is pretty strong, fmc shrank. utilities and telecom roared higher, while the energy sector gave you a relief rally as natural gas and oil prices started to rebound. and saved by the bell? no! how about john in illinois. >> caller: hey, hi, jim, with the recent acquisition of agl resources by southern company, agl converted all my stock holdings to cash. >> right. >> should i reinvest into all southern company? >> no, they have a little higher risk profile than i like. even though it was one of the weaker stocks, i favor dominion.
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it's got what i want. a growth utility play that still has a good yield. all right, yield in oil, but new trends may hold our attention going forward. much more "mad money" going forward. here comes alcoa, double a. then there are five key trends that seem to be gaining strength the second half of 2016. and a fast fire all-time edition of the lightning round, so stick with cramer! ♪ in n york state, we believe tomorrow srts today. all across thetate, the ecomy isrowing, and the lowest tax in decades, incentives,
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even late at night, or on the weekend, if that's what you need. because you have enough to worry about. i did not see that coming. don't deal with disruptions. get better internet installed on your schedule. comcast business. built for business. and they're off! alcoa reported at the close tonight, making the unofficial start of earning season, it's about to break itself up. truly better than expected numbers which gives me hopes that the global economy might be in better shape than people think. alcoa's one of those companies that i always tell you to listen to, because they offer keendiff
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entities, automobiles, aerospace. so now that we're getting closer to the company's breakup, let's take a closer look with claus clonfeld, claus, we've got two companies we're talking about. one of them is a chit on world-wide demand. the other is a chit on your engineering capabilities. we saw a nice uptick, engineered mr. i-- plodding along, doing good things. >> it's still a low-price environment. and it got a little better in the last quarter, and that's what you see immediately reflected in the results.
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that's purely a fact of us driving down. and you see it in. in this business we have a low-cost position. the price goes up. you see it in the profitability. that's why this is a very attractive investment for those that are willing to live with some volatility. >> our viewers care. you have a line in your deck about how chinese demand for boxite drove a record quarter. we all are confused. we think that china's bad. they already have too much of this. your bauxite is something they need to make aluminum. >> it's not only a good quarter. it will continue to do good, because china does not have enough bauxite. they import roughly 40%.
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the bauxite reserves that they have in country are slowly depleting over time. so there will be more demand for good bauxite. we are number one baubsite miner in the world with a very, very amicable bauxite commodity. it's about the question of how much alumina is in the bauxite material. so it's a great business to be in. >> arconnick. this company wouldn't, didn't really exist. what will it look like a year from now? >> we will continue on this path. i think you absolutely spot on. and when, when we announce the separation last year, end of
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last year, i said that we have been biddiuilding over the year the point that enables us to have a strong engineering type business, which we have with arconnick. the trostrongest ones are aerose and automotive. we are one of the premiere suppliers for lightweight solutions in automotive. we announced the end of last year, a record invention called the micro mill which can now attack the last domain in steel that exists in auto. this is still to come in years, you know, so that's all going very, very well. and then in aerospace, in aerospace, we were originally the supplier for a few components, and most of it was around aluminum and a little bit about nickel. now we basically supply pretty much all of the parts that are
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in a jet engine. this is through organic growth and the acquisition we have been able to make. plus we have become material agnostic. we have a very strong position with nickel allies, titanium allies as well as with aluminum and a little bit of steel, which is needed in this industry, right? and we can also provide the full structure of the plane, that's i why if this industry goes well, we will be on it. we are on every platform of every plane. >> i saw you made some asset sales, cut some debt, but there will be a substantial amount of debt. is there a way to make asset sales or to make sure that you feel comfortable enough in the debt position of the two companies? >> well, i mean, we have first
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of all, we have to look at what the situation's going to be. and what you see in there is the reflection of what we see today. and we said about a billion of debt will be loaded on to the corporation. and we also announced a pretty intelligent solution, which is called the in 20 solution. we will have an equity state. the reason for that is basically earlier this year we saw commodity prices coming down, debt markets getting into a freakish environment. we said what did we do to derisk it. it would be an opportunity to monday advertise, by arconic.
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there might be other opportunityiopportunit opportunities depending on how this looks. we would want to do it ideally in 15 months after separation, but we have five years time. and we will also continue to produce a lot of productivity this year. all of this hits the bottom line, hits cash. and the anti-cash generation of arcon arconics will be good. >> look forward to seeing you next time. claus, ceo of alcoa, thank you, sir. splitting up. lots of exciting stuff, but get to know it before you pull the trigger. can a toothpaste doeveryt?
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[ buzzer ] >> and then the lightning round is over! are you ready? start with josh in maryland. josh? >> caller: cramer, i'm going to start us out tonight with a bbbbbbb boo-yah! >> and what's going on? >> caller: with the upcoming school season fast approaching us, how do you feel about chgg, the textbook company? >> well the stock has moved up since dan was here last time, but i still think it's a wait-and-see situation, given that the last quarter was not all that hot. let's go to adam in florida. >> caller: big boo-yah to you. >> back at you. >> caller: i'm a huge fan, i've been watching you for years. and my question, actually, is about teledoc.
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>> too much competition in teledoc world. no thank you. how about jim in georgia. jim? >> caller: cramer. tell me, what do you think. >> people want to do this one because of the short position. the egg business, no! i don't want to touch it. >> don't, don't, don't, don't buy, don't buy! >> caller: hi, jim. >> dale. >> caller: high stock is first solar. they took a 10% haircut last week. >> i stick by first solar, but right now i'm not looking good. and that, ladies and gentlemen, is the conclusion, of, the lightning round! the lightning round is sponsored by td ameritrade. our thinkorswim trading platform aggregates all the options da you need in one place and lets you visualize that information for any options series.
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okay, cool. hang on a second. you can evenee the anticipated range of a stock expectinearnings. impressive... what's up, tim. td aritrade. thank you.
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right now the big things for the second half are staring us straight in the face. i'm talking about the kind of concepts you can fall back on when the market inevitably sells off. and yes, there's another pull back. first, there's pokemon go. just kidding. in fact, that's exactly the opposite of what i'm talking about. i'm sure the pokemon craze will drive nintendo higher.
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but when the treasury went down. the first time in about 500 years for the dutch debt. you can buy a lot of stocks for 2.5% yields that weren't all that attractive before this. that includes verizon, at&t, utilities, consumer package goods. second theme? takeovers. hey, look. they should have been killed by brexit. but they haven't been. and that's what's so exciting about a whitewave or hershey, both targets although only the former has worked. if i w general mills and deno are no friends. i say reiterating what we said ermier on "mad money," come on, ibm, buy, buy, buy. >> buy, buy, buy!
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>> who wants to be short seller of anything in that environment. third, the internet of things is real. it is huge. and it doesn't have just to do with homes or cars. it's much bigger than that the industrial implications are huge. machines that you can't have break down without potentially putting yourself out of business. technology's broader than you think, and it includes a lot more sectors than just personal computers. fourth theme, retail. retail can be bigger than just amazon. the frugal stocks, like tjx, dollar tree, dollar general, they make sense. the income thesis, the home thesis, maybe we've got more than that. the unstoppable, home depot.
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maybe we can start buying apparel. under armour, lululemon. don't give up on retail and restaurants. the number five, oil and the dollar will recede as the be alls and end alls for the rest of 2016. i'm not saying when oil rallies it will no longer help the bulls, it will. i'm not saying the dollar cannot go higher. if the fed raises rates it will. and i don't think we're bound to see it so tightly in the second half. as a matter of fact, i think they will, let's just say diverge in days. why do i think that? i think oil has become a lot less perilous. it loses influence similarly, if the world's economies make a come back, it won't matter as much at earnings will.
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alcoa's look fine. and i'll still refer to the dollar and oil regularly. i think the linkage will be less pronounced. if you ask me, it's about time! ♪ hallelujah stick with cramer! or fill big orr or eanyour offic and take on whatever comes next. find out how amecan express cards and services can help prepare you for growth at open.com.
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a shrewd caller asked about netflix and how it's going to do. netflix is one of those stocks like nike, like disney, like apple, like starbucks. these have to get on board in order to convince the nay sayers, now maybe they never will, but we've got the bank stocks later this week, and they, too, have to get on board. otherwise what we have is a rally that is viewed as a short kov. there's always a bull market somewhere. i promise to find it for you right here on "mad money." i'm jim cramer, and i will see you tomorrow!
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[engine turns over] [cars vrooming] >> [imitating car] tonight on "jay leno's garage"... that feels good. supercars: they're the pinnacle of design. >> this, to me, was something completely different. >> engineering. >> it really feels like a big go-kart. >> and price. >> $12 million. >> wow. >> but what makes a car a supercar? >> it's an exaggeration of everything that's cool. >> how're you doing, jay? >> can you give me a ride back to la? to find out, i take a ride with "shark tank's" robert herjavec in one of the most iconic cars of the '80s. >> when you want to be a somebody, you buy a ferrari. when you are a somebody, you buy a lamborghini. >> i got a one-on-one with the man behind the one:1. what was your biggest obstacle? >> everything. [both laughing] >> but it isn't all about high speed and handling,

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