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'm cramer. welcome to "mad money. today was day one of the don't fight the fed sell off as long as day two of the santa claus rally.

the result, lots of cheap stocks participated in the santa clause rally. nasdaq diving .427%. this may be the new pattern. like many people my age, i cut my teeth on wall street week every friday night on pbs, he surround himself with some of the best minds of the business there were so many good people who come on the show overwhelmed with insights even if you didn't like his corny jokes took down copious notes every friday one of my favorite people in show, a regular was marty.

i've been pretty bullish for the long run i still like the stock before jay powell pivots and decided interest rates had to go higher, i liked tons of stuff but tons, including the ones with amazie igrowth rates that traded high. i love them. why spend a tremendous amount of time talk about the interplay between the fed and liquidity and the stock market you can spend a lot of time trying to understand this stuff. there are fewer stocks that go up when the feds tightening and many more that go up when the fed's easing that's all you need know while you don't want to fight the tape especially since we tend to have a santa claus rally right about now, you also never want to fight the fed. you can't like the stock market as much as you did a month ago

even though-higher that's nature of the market. beast. what doesn't work in a world where the federal reserve is tightening you think the big losers would be the cyclicals like the industrials. raise rates, cool. what really gets hammered when the fed starts tightening are the companies with no earnings which is why i have been focused on them for you. i can go on and on about why the stocks aren't worth much what matters is big pools of capital act by rote. they get a play book and they stick to it.

it says do not open unless the federal reserve is about to raise rates. when the time comes to open the drawer and rip the envelope up, what pops out? a slip of paper. on that paper it says sell the most expensive stock on the market that's it. they're done that's what they do. yeah, it's like that i'm sure some of you want to say how about this tech stock or that tech stock. i've been working about this because i've been working on a segment for the investment club. we'll go aefr changes that we'll make from the chartable trust. for months we have been talk about cutting back on any single stock until they had net basic ear earnings if they do, they can be capped we sold one today. it wasn't tech it was a remnant not necessarily representative but a high multiple on earnings let's say they don't have big earnings then you can't afford to fight the fed at all.

wall street is happy to pay up once we start worrying about rate hike, once is fed is no longer your friend then the market gets a lot tougher before they could rally on strong numbers. now they need spectacular numbers to stay in place the estimate really look for will speak to adobe later on the show i like that situation very much. i find the stock indreegtrigue r the decline. it's a lot harder to buy this kind of stock on weakness than it was a month ago

next group advitends to get blad when the feds start tightening i'm beginning to feel like i over stayed my welcome we don't own any housing related stocks for if the charitable trust. finally, you have to be careful with high multiple retail stocks it will be whispers that the omicron strain will cut back on shopping those signs are easy to ignore pu now we're in class half empty market we just bought more morgan stanley for the trust because it has no real credit risk. it's a gigantic fee generation

machine. finally, i really like the consumer staples even if it's hard to find good ones maybe it doesn't matter. i counter the table last week's club meeting on eli lily i think it's great i'm not backing away even though the stock has risen tremendously it doesn't make sense to sell it even at $279 it's up three bucks. i have no idea if jay powell will throw us in a recession

the pbottom line is my opinion doesn't matter wall street has play book and you'll be punished for trying to go against it which is why you don't fight the fed. mark in florida. >> caller: hi, jim i'm enjoying the investing club e-mails. >> i'm doing my best to get them out there. what's up? >> my question concerns the continuing drop in macy's stock. independent analysts rated highly online sales seem to be good but i guess the inflation worries a plaguing it. should i get in and out and cut my losses? >> no. the stock is inexpensive they are doing a lot of great things we got a covid problem their examine by using part ners it's good if if i goes to 20, i

would be a buyer of more that's the next stock if it does go down. don't fight the fed and don't fight the tape thank you. try to find the right way to approach the stock it's opinion almost a year since the whole spac collapsed they won't stop. i'm investigating why the deals are still surging in the market and why they keep bringing them. stay with cramer

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join over a million members by signing up for free on the xfinity app. our thanks. your rewards. you can tell a lot about a market by the wapy it reacts to dualing analysts look at wayfair. this morning they caught two very contrasting pieces of research a solid buy rating $280 price target. at the same time bank of america downgraded to sell and slashed their price target to 175. i love these side by side sell side gunfights because they give you chance to see the best arguments from the bulls and the bears so you know what you own if you own these and whether you should buy or sell them.

you already know the market. take a look at, obviously, market kind of has had enough. wayfair got obliterated today. they focused on the bearish downgrades from bank of america. it's in the naz da so it had the wind in its face to begin with wayfair was a huge winner when every one was stuck at home. it also wasn't really safe to shop in person this online furniture store got an enormous boost. remember they have an array of prices a lot of people think ta are in the lower end. they have always been a company with a rapid revenue growth. they were able to turn a profit last year. we saw big rotation out of the covid and into the great reopening place.

that didn't help wayfair they were facing period where they were doing so well. lately, it's only gotten more difficult. we have seen a wholesale reation out of the turbo charged growth stocks like this one as it's become clear the federal reserve will be raising interest rates sooner than expected that tends to obliterate this kind of stock. the kpraechcompany revenue was n that's a big decline, covid or no covid while wayfair manage an intraday high on black friday, that's right before the hideous market black friday sell off. that's how fa ware ended up at

189 bucks. you're talk about just a couple of months ago. 1 189 bucks and change that's the context for this shoot out. we've had a number of people try to call the bottom on wayfair but they have all been too early. it was a bold move when anna initiated cover with buy rating. wayfair possession of an under appreciated asset. it's not a sum of the parts deal i didn't know this it's got a gigantic fulfillment

business it should mostly be behind them and this huge network gives the company a major competitive advantage. it means they can get products to you faster than the competition. the company can go back to delivering double digit growth they also expect the margins to start climbing again in 2023 put them together and needham believes the stock is a steal here remember, priced earnings, price to sale. that's a low price what about the bear case for the bank of america? the one that carried the day and crushed the stock by much less courageous call. many the investment business it rarely pays.

bank america points out is it not only against tough compares but also seeing ugly data right now. they don't feel confident about wayfair's business as we head into 2022. once consumers feel safe, bank of america will spend less on stuff like furniture you got to expect less demand for home office furniture. the analyst still believe in wayfair long term story. they are adamant this is the wrong time to own a digital furniture retail we're in a environment of high inflation and rising interest rates which is not great for the furniture business especially not great for a furniture business that trade ons s on the money it could make many years down the road. bank of america thinks they deserve to trade at their 23 sales estimates. not too much from where the stock is trading where do i come out? honestly, i think they're both

wrong. needham and bank of america is still judge wayfair like we're in a stock market where the fed is your friend i feel like the bulls at needham jumped the gun if they think the first quarter will be pbad, they should have waited that's not how this market works anymore. analysts have gotten used to judging it you got do judge stocks basedo earnings which wayfair now has the stock is far from cheap. if you used the 2023 earnings because it becomes in the next few weeks. how about this how about the best that's at 19 times 2023

estimates. that's like a beauty to be hold company. how about one we think the world of how about william sonoma those are earnings those are high quality companies with much more consistency than way fair they have much less growth at the moment i like them both i like them far more than i like wayfair. it's funny y you're talking about gary friedman they are both fantastic. this stock might be enticing between 112 and 135. huge from here and that makes sense. the bottom line, when the stock

gets hit with downgrade and drops 8.5%, you have to expect there's more pain ahead where the analyst don't seem nearly bearish enough give tennessee market has become a lot less friendly there's a lot of cheap stocks out there, including a bunch oend by my travel trust. i would check them out first before i ever pull the trigger stick with cramer. coming up, 2021 was the year of the spac attack c i see opportunities that lay ahead. early audiences give "sing 2" an a+. i counted nine smiles, two belly laughs and five chuckles. it's a heartwarming crowd-pleaser

that will have feet tapping. ♪ ♪ ♪ digital transformation has failed to take off. because it hasn't removed the endless mundane work we all hate. ♪ ♪ ♪ automation can solve that by taking on repetitive tasks for us. unleash your potential. uipath. reboot work.

it's been nearly ten months since the whole spac collapsed we have seen a surge in the new number of spacs.

how the heck are there still so many special purpose acquisition companies doing the same darn thing that hasn't worked in ages why are so many still being conned on these? deals have been horrible horrible the end result is a sickening decline in the stock just look. late last week, we saw another high profile spac lash when buzz feed merged with one of these stocks the stock spike to $14 before plunging to five and change last thursday now it's back to six that's awful the deals don't stop even as traditional ipo market is winding down, we just had 19 new spac offerings that raise $3.7 billion what's going on here you think these spacs are

terrible investments right? not so fast. spac investors make their money by screwing over both home gamers and the companies they merge with those are my words, not his. what do i miean by that? buzz feed stock collapsed in the mid single digits. the post spac deal got hit with redemptions. there's something you may not know about these special purpose acquisition vehicles when they do a merger, the spac vehicles get a choice.

it's a no brainer for the spac to redeem their shares roughly 94% in the pre-merger spac loaded the cash app and got their money back it's an embarrassing vote of no confidence from the investor base it made the deal pointless for buzz feed. from a stock market perspective, i think it's more important that 94% of the spac shareholder stage a walk out last week you can see why people keep investing in new spacs the risk for early investors is very low if the stock gets hit, they can get their money back when you zoom out, it's remarkable how badly some of these deals have done. if the market reacts poor to the news of a merger, the stocks early shareholder can back out

the investors who come in later reveal carnage and there's a lot of it. we have been tracking the performance of the largest post spac deal stocks in a custom index. it's down 40% year to date that's ridiculous. we examine the performance of group of larger groups of 193 of these stocks the numbers are horrible nearly 20% are below $5. it's not like they are winning very much. of the 58 names that aren't under water, 25 are below 12 only 23 of them are above 15 that's just 12% of the 193 that we looked at even these are down 43% from their highs. in short, buying these stocks in the open market is almost always a mug's game don't take it from me. listen to sec chairman gary

ginsler. >> suppose a group of strapgers came up to you and said, i have a company that doesn't do much of anything but some time many next two years, we'll merge with another company. yop what that company is yet would you invest in the stranger's company what if i told you that if the strange's complete merger, they get to pocket 20% of your investment that's essentially what a special purpose acquisition company. a spac does. >> that is the clearest, most rigorous explanation of what's going on here. then the spacs give sweat heart de -- sweetheart deals it's known as a private investment or pipe transaction throw in the fact once the merger gets announced, they

promote the heck out of the thing kit be illegal if the company was coming through the ipo way. that's why ginsler wants to track down on every stage of the spac process and he's right. while biegetting it makes since financially. as long as you come in early when the spac is a pile of money, you have a scenario more importantly when money managers participate in spac ipo, they don't just get a share. it includes one share and a fraction these fractions typically aren't worth much less than $1 in most cases when you throw in the ability to redeem your shares if ten bucks

each, you're looking at a win. you pay $10 for either because $10 is standard of these offerings. that's a 5% gain if the spac flames out they have been making the terms more enticing. you see it only a third of a quarter. now they are typically giving you half or more the old standard is spacs would get you two years and they would get two years to finally take up a target or they give you your money back now it's 18 months and rather than give you $10 back if you decide to redeem your shares, they give you $10.10 or $10.20 that's 1 or 2% interest. low bond rates is not bad. this is basically a very lucrative money lending operation. problem is most can't take advantage and the company decide to merge are getting raw deal too. the bottom line, the spac deals keep coming because they are great way to get a guaranteed

return but everybody else in the process gets the short end of the stick. sooner or later privately held companies will figure this out and stop agreeing to participate. until then, i recommends you give this group a wide birterth no berth at all. >> caller: thanks for taking my call >> of course. >> caller: i have a stock that i own that's been cut in half since reported earnings back in november i want to know if you think i should buy more or just keep holding. the stock is grass king. how the you think that miepgt affect the gambling stocks >> the stock has opibeen very difficult to own i said it would be i've bp watsi been wats waiting shake out to occur i think it's faced with some tax law selling. we'll look at it at beginning of

the year. >> lucid we were out and i've got tole you, i think the stock is one of the better ones. it's probably one that -- i think it's one that will make it a lot of people want these stocks it is a great ride remember, it is very speculative. the spac space, most home gamers can't take full advantage of it any way. i'm recommending extreme caution. don't miss my interview with the

ceo. i'm telling you why i'm praising powell stay with cramer earn about covi,

the more questions we have. the biggest question now, what's next? what will covid bring in six months, a year? if you're feeling anxious about the future,

you're not alone. calhope offers free covid-19 emotional support. call 833-317-4673, or live chat at calhope.org today. early this morning the premarket action looked like yesterday. it runs 8:00 a.m. the nasdaq rolled over. what changed adobe. this morning it was reported and while the actual results were in line with wall street expectations, i thought it was better there were people who felt that the forecast was weaker than anticipated. that's why the stock plunged 10%, sent shock waves. i've seen this move before

it's been wrong. welcome back >> it's great to be back on your show >> it's showing me what your targets were versus the actual there's a couple of them digital media, 19% growth. 19, 24%. 22, 27 for all the different verticals. do people understand you beat your targets >> it was a phenomenal year.

we had our first billion dollars experience. the one thing that people didn't understand is how foreign exchange is moving against us but the underlying business is still extremely strong >> we had this exact thing with sales force and oracle both said it, neither were believed three days later they were believed to me this was your best quarter, great year. there were things that happened this year that you didn't have before and it wasn't really

until the end of the q and a i think that you can own the actual day-to-day meta verse when it comes to what a customer wants. i don't want to get ahead of myself but i've seen the meta verse as presented to me and all i wanted to do is say i can advertise here i want to advertise there. i can do this. i realize i can't do without adobe. there's no one else who is do it am i correct >> first, you know that jansen is a great friend and what he's done at nvidia is amazing. when we think about the meta verse, it's all about being able to engage with a computer in the vir kmul world what you can do in the physical. how do you create this content for the virtual world. it's all about customer

engagement and digital creation. i think the other aspect that is relevant that we'll have a huge role in is allow these virtual goods have value you think about the value with the vir ktual goods, adobe is playing a role >> i now think that if there were a digital mall and it was in meta verse and i wanted to have my daughter open the dress shop that he's always wanted, the only way she could do it would be with adobe tools. the only way to have people cash

out with digital currency of her choice would be with adobe i think when people sell the stock, they seem to think that somebody else has come in and taken the place of adobe if anything you have gotten stronger versus your opponents >> one of the cool products we anno announced earlier this week was a product called creative cloud basic press. we have fspoken about our visio for anybody who has the story to tell how do you enable them to tell that tstory. it's really a quantum leap ahead in term of ease of use and accessibility and making the web a real medium in order to do that our artificial intelligence and machine learning frame work allows us to capture intent and understand how a content first offering paradigm, namely because we're all terrified of the blank careen and if adobe

with help us where you say i would like this store and make sure i can do commerce associated with it, i think making that happen in a few clicks, that's really adobe's domain and we'll do some magical work in this area. >> if you felt something it was weak you have never hesitated to say this part i'm not happy with that's been your way i said i know if he felt it, he would say it he's never hidden anything >> the experience cloud growth was one of the highlights of the quarter. we delivered this appearance we have talked about how we are absolutely the leader in creating this realtime customer data platform that allows you to

do personalization at scale. i think part of what and maybe we didn't do as good as job and that is when you look at it year over year, there's a couple of things that will going into the equation the first is we had a 53 week year as i mentioned earlier, there's a bit of foreign exchange and maybe we could explain that as well as last but not least when you look at tuhe underlyin trends of the business, digital, it's going to change everything about how we live today. all three of our businesses are actually at the sweet spot of what's going to happen in this particular space.

>> until you tell me that content no allower powers the creative economy and it doesn't fuel the global economy then aisle going to to believe it because those are fundamental preaccepts that you and i have talked about forever you're just arm and arm with what's happening in the world. >> i appreciate you saying that. i think we have the most engaged motivated 25,000 employees they love the vision of the company. they love the purpose of what we stand for. our job is to just continue to innovate that's what we're going to focus on >> you do a great job. if you want to take your cue from the stock, you be wrong because we started recommending this stock at 58 and we're not leaving it yet it's still inexpensive versus

what you're doing. always great for you to come on. it renews my faith in what all of us are trying to be, which is creative thank you. >> thanks for having me and happy holidays >> same to you mad money is back after the break. coming up, a storm is coming give us a call cramer has the answers to all your burning questions the lightning round is next.

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♪ ♪ ♪ automation can solve that by taking on repetitive tasks for us. unleash your potential. uipath. reboot work. ♪ ♪ ♪ (sha bop sha bop) ♪ ♪ are the stars out tonight? (sha bop sha bop) ♪ ♪ ♪ alexa, play our favorite song again. ok. ♪ i only have eyes for you ♪

it is time time for the lightning round the lightning round is over. are you ready. michael. >> caller: i broke out the shopping list in the past two days i've been looking at vsrr >> no. remember the criteria. we need to have companies that are profitable that sell at a price to earning ratio. not a price to sales ratio they have to be profitable maurice. >> caller: how you doing >> i'm doing well. how about you? >> caller: i'm doing well. acquisition complete at the end of the year. bob halted until the second quarter of 2022.

auc up 18% and aum up 23%. what is your '22 outlook for state street >> i like it very much let me do you even better. i think morgan stanley travel trust has been tbuying i. i think it's cheaper, better with better growth mike in texas. >> caller: how's it going? >> going well. how about you? >> caller: good. thank you. i want to see what is going on and what your thought on virgin galactic holdings? >> it's classic example of the stock that you want to buy when the fed is easing or got rates low. when the fed is tightening, there's no value that you'll get. tom in alabama >> caller: my question about at&t >> you know what, today it got

upgraded i said today at 22 buck, the hate is over i'm not longer bputting it on there. it's got low enough. i'm going to stick by that position even though the stock was up very big today. enough is enough no matter how much i don't like those guys and i don't at these prices, enough. let's go to mike in new york mike >> caller: booyay. thank you for doing something that matters to be public. >> thank you. >> caller: i know they are launching companies into space that you like. i looking for small cap niche companies. i found one and i think it's great. t company growing over 60% p/e is only around 30. peg ratio less than one.

what do you think of camtek? >> i like it i think you got a good one that is the conclusion of the lightning round. coming up, lead the saber rattling to rasputin cramer has fed sense and he shares it with you, next i'm searching for info on options trading,

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kept hearing that jay powell should have been much tougher. i'm surprised they didn't break out the analogianalogies. anyone who trots out hyper inflation is being ridiculous. you have to rigor here

we got covid 800,000 people died and millions lost their jobs. we didn't know where they are. at the same time covid innewsed shut downs have created bottlenecks all over the place powell does not want to extrapolate from that. omicron will be the next covid variant to sweep the country we'll have more supply chains. it's already looking like omicron is less deadly than the delta variant and could crowd out the more lethal strain powell is very historical in his approach i don't talk to him but i'm sure he knows from an economic perspective this pandemic has a lot in common with the spanish flu that swept the world right after world war i. from a human per spespective it

worse. we know it ran its course without a videocaccine at the same time powell has to be where the omicron will cost disruption in the workplace and higher prices. he's got to walk this tight rope he can't afford to be too harsh. he also can't afford to be too gentle what happens if the pandemic runs its course. that's why i think powell chose to start tapping the breaks on the economy rather than slamming the breaks like so many of his critics want the people trashing him for willing late and raising interest rates assume he should have no responsibility the jobs ensure price stability and employment for decades the fed only taking one of those mandates serious. powell is not like that. he's a bigger thinker. he wanted to help people especially disadvantaged minorities he wants them to get jobs and he has done that. he's succeeded so now it's time to tighten but not too much. omicron could still do real

damage to the economy. many people ask me why i praise jay powell so much as if it's some sort of sin some say it's because i want a higher stock market and he's given us that one. god forbid anyone makes money on the stocks others say i praise powell because i know him personally which is untrue. we've never socialized i like homosim because he's measured he's not an idealog. i was a government or political science major in college we talked about how our country was gifted that's been one of the great sources of strength of our nation even richard nixon was not an idealog. he became first president to visit the people republic of china. that was a very different time when we didn't have coherent political parties. now everything is ideological. people come on and talk extremes powell is not taking the bait. he's not doing that.

he doesn't want to throw people out of work with his actions but he doesn't want to let i fnflatn spread he's measured. he's exactly what we need and what we want i'd like to say there's always a bull market somewhere. i promise i'll find it for you see you tomorrow the news starts now. historic storms pummelle midwest, thousands left without power. >> it sounded like a train going through. we're on the ground with a firsthand look closing argument in the trial of the theranos founder elizabeth holmes what to expect in the days ahead. a potential game changer in the fight