the market is going down

and but he knows why, don't inc. about what you need sell, change your perception and think what you need to buy. i know this is one tough market, the nasdaq punching 2.8%. that does not mean you should stop looking for opportunities. how do you push a day that is hideous with not much negative catalyst other than they were up and then they went down really fast. everyone is thinking something bad is lurking. first, ask if it is worth it to take a chance to buy something. i think it is. why? you have to expect that there will be mechanical selling. in the old days you would see people march up and down on the last day of the quarter. for most stocks managers come

in with guns blazing and take stocks up. it got so ludicrous, so evil, just mockery. the sec decided to crack down on that process and it does not happen. there is much more activity on the third to the last day of the quarter. that's what i saw today. a lot of goofy stuff. money managers losing stock. every little shenanigan, that is where the opportunity comes in. before you take advantage of the selling you need updated information. ask yourself what is going on that would move the stock up to the gravitational pull of the futures. it is too hard of a market to go in with old information. let's talk with morgan stanley. why bank stock?

you have a default risk then you have --. the one with the least default risk in new york is morgan stanley. last night, after being scrubbed by the federal regulators morgan stanley decided to increase by 11% and authorized a $20 billion multiyear program. this is only $136 million company. it is substantial and real. why am i think it's about morgan stanley? the same reason for why i --. it does not have the same business model. it is a doable earning screen. it does not have the same risky profiles like the major banks. and -- of 4%, one of the largest in the land. i think it is a gem you can pick up much less.

the stock was up a little today, but you know what, on any other day i think the stock could have traded to the low single digit 80s, it was that positive of a dividend boost. next, really controversial, here is a stock that has been cut in half from last year. at one point today this was up big. it gave up -- once the programs kick in. why disney? we learned that china will allow them to open up a shanghai disney. the ceo knows how to run theme parks. there is a greater chance that the estimate will be low and will need to be raised and not cut. -- just got a three year extension. maybe that will silence be back ventures and they will spend more time with their families. i think it is time for disney to change the narrative.

for the longest time all anyone focused on was the declining espn numbers. when they went down which they did with much consistency the stock was punished. disney paid too much for fox and generated extra content for the streaming service. now disney plus is like espn -- you find the wanting and the stock goes lower. if i were running the show, because of this commitment i have not. i would put a new disney theme park in the texas, colorado corridor. that is the fastest growing region in america. consider this, the most popular part with the be part business. it needs a new flagship. forget disneyland in california or disney world in florida. give me a disney universe in new mexico. it is the land of enchantment. johnson & johnson, this company is breaking up into a consumer

business. each of these divisions is on fire. this stock rarely comes in, it rarely goes down. i think it is a nice buying opportunity. they have all been buying opportunities. you can say it is a bad idea to buy the stock with this is not just any old drug stock. -- has been put in a great position in a move that will unlock a ton of value. you have to take advantage of it now, don't run from it. morgan stanley, disney and -- we talk about those names all the time in morning meetings. today at 10:20 --. there was one more i mentioned that will make a ton of sense in light of the fact that china is beginning to reopen. this is one i rarely talk about and i am going out on a limb right now, starbucks.

right now howard schultz is going around the world checking in with his associates. he is kind of doing a tour in response to --. -- that have kept starbucks from performing at his highest level including where they need to figure how to make cold drinks. more portly they have a huge chinese business. when china fully reopens that business will grow. i think it will be bigger than the u.s. presence. they are more headline risk. let me go to the long story short. when you hear china is reopening, i want you to think, starbucks. these may not pan out, that's why you do not buy stock all at once. you get into it gradually, step- by-step, inch by inch, by some now and buy some later and that's how you fill a position. with each of these names you

have goodness in your pocket. it is unlikely you will get --, that is what makes these stocks viable. this may be a bear market, the prices will come down and these stocks can be winners and that's why have to treat ugly moments like this one -- but for a select few stocks there is some good going on. how about we go to florida. >> what is up? >> hello. my boyfriend and i are true new to stock that we appreciate all that you do in helping us build our portfolio. >> i feel like i am in --. what's going on? >> my question is a two-part question but with regards to the stock, it started dropping

a few weeks ago before the major drop. the price now seems so great to buy another 130 a share. what are your thoughts and should i sell --? >> do not sell your best buy. i like best buy very much. the problem with 3m is the lawsuit involves a particular kind of injury that i happen to suffer from. i can tell you it is the type of thing that -- i'm fortunate enough that they did not come on the battlefield they are sympathetic in the court will courtroom. unless 3m wins all the cases you cannot own their stock. >> you have to treat ugly moments like this one as buying opportunities, not for everything not even for many but a select few stocks.

amazon -- is some of the biggest websites. i am talking to one of amazon's largest divisions to see what the future of the cloud can hold. nike posted a mixed quarter last night. what should you make of the stock? i will give you my take. i'm leaving my take on jetblue and spirit. if you are a spirit shareholder, lifted up. i'm going straight to the source. i may suggest that you stay with --.

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let's talk about the has the pain that is amazon. we have learned they over billed their fulfillment infrastructure and hired too many people. who can blame them? who knew when we were going to come out of it. that is part of stock. the one that is firing on all cylinders i am talking about amazon web services. it is the industry leader by far. amazon web services grew by 37% in the first quarter. roughly even where they put up the past 12 months. no margin problems in the cloud business. as the web search it becomes a

bigger piece of the pie. i think investors will put amazon off as a retail especially since this is a key business. the more i work on this the more i realize the business of aws standalone might be worth most of this company which is why i am retaining my position at --. earlier today we had a chance to speak with the ceo of amazon web services. he was on the sidelines of nasdaq technology future conference. this is interesting. >> here we are at nasdaq and i think you have some incredible things that you are doing that many of our investors might think is positive. >> we have a fantastic relationship with nasdaq. it dates to 2008, they were one of our first in a price case studies. if you fast forward, at our reinvent conference nasdaq was

going to move its market to the cloud starting with office market and -- in the far future over the next couple of years moving the rest of the market to the cloud. that is the workload that people said would never work. >> we have always viewed the crowd cloud as being something that financial companies would not trust. that is the biggest piece of business that you can get. this is the great -- that you need . >> the world is seeing the security at there, obviously for the market you have to have that legacy. most important, the agility and innovation. change forms of the organization and financial services are seeing the benefit. >> i think we should check in on your business. this is a business that i found that is not -- nothing is

recession proof. i would return to you if i felt we were going to a recession. i would say figure out how to save money. >> i think demand continues to be strong. a lot of new customers signing up. it is interesting. a different time and place. if you go back to the great recession in 2008, 2009, i think it was good for our business. so many companies do not have x available. there was no copy of capital. the cloud is about the flexibility to burst up and burst down and wax and wane your capacity. we have a lot of new customers using the cloud. in any uncertain economic environment with the pandemic, with supply changes, with that uncertainty people cut back on the capital expense and we have

become a natural place to run your it. >> ven for customers that have met you we have google, we have oracle. these are competitors and you were up 37%, once again. you are incredibly lucrative. then i found this figure of $88.9 billion backlog. obviously the other guys maybe taking something but not your share . >> it is very competitive, as it should be. basically most of it over time we have been able to move to the cloud and with that opportunity you will have strong competition. we continue to do well, we continue to build and add more customers faster than anyone else because we are the broadest and deepest service capabilities. i think with that growing backlog that you mentioned

shows customers are forming long-term relationships with us. they are signing agreements for multiple years. that is great, principally, because we are building trust together. we are in it together for the long-term and that changes how you do business together. on good days and bad days you are in it together. >> i know goldman sachs are taking a lot of risk. they need someone like you. they do not need technology to do it. >> we love our work with goldman as well. we were at our reinvent conference last summer and now goldman sachs financial -- it is one of the moves into the syntax space. they have great capabilities around data and athletics and putting that together with aws capabilities it sounds like it is a great idea.

>> it is a big ramp up for them. you have cut price over and over, 115 times since aws was founded. making it a better deal. you work with --. obviously wants to do what is right for shareholders. at some point does he say enough what the price cuts? or does he say yes, that's what we need to do . >> we have no intention of changing course. we have time after time cut price. the vast majority of time in the absence of competitive pressure to do so. you innovate differently if you insist on having a low cost structure. you think about the world differently. we will keep on innovating to drive our own cost lower and continue to pass the savings onto customers. by the way, we have seen over the past 16 years that you will

see more -- as you print the customers that you are here for them . >> how big can aws be as part of amazon? >> we have always said it is possible that aws could be the largest business at amazon. amazon has other large and great physicist. it could take a while to get there, the possibility is there. if you look at, especially it will move to the cloud. it will take a while. you have seen maybe 10% of it. it is still early despite the fact that we are $74 billion --. most of it is still to come. that just shows you how early we are . >> so many people say --.

>> it is so obvious to me how early we are. that's why i am so thrilled at --. that is adam, amazon web services ceo, just an engine for growth. thank you so much. >> cramer runs down nike earnings, next. >> next, the january 6th committee the price hearing. the new insider bombshell testimony from a former white house aide. a recap tonight. >> cnbc

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you can instantly start saving on your travels. so you can go and see all those, lovely, lemony, lemons. ♪ and never wonder if you got a good deal. because you did. ♪ i told you to keep an eye on --. nike results are always important. they have the big read on the state of the consumer. they give you a early glimpse in the next earnings season. this time, there was a lot

going on. you get an inside on the supply chain crisis, a huge amount of business in china, what have we learned? >> this is a complex piece. you would think that nike reported a real stinker, holy cow, what a bad one. the truth is more complicated and a lot less negative which tells me you have to stay tuned. first you have to understand the context. after the darkest days of the pandemic, nike peaked in the second half of last year. in september we started hearing about manufacturing disruptions in vietnam were they make things in vietnam. that was courtesy of the delta variant. then the stock charged to a new high in november when the whole market topped out, especially the covid winners.

the days before the fed got tough. when nike -- they were good outside china. their stock got punished and that continued into the new year. >> the last time we got results the quarter was solid. -- coupled with much better numbers. unfortunately that came we for china started going back in luck down. you put nike's big chinese business it is gigantic. then we start to hear real bad news as wall street began to worry about the fed mandate. it is not so great for sneaker sales. this stock has been the dog all

year. going into the earnings report almost all of the comments were negative. of course most of the -- this is the phenomenon we have been talking about. the analyst who were stuck with the highest price targets need to get back in touch with reality and/the numbers. they usually do that right around earnings time. with that in mind, let's talk about what happened last night. you probably did not hear, i did. first we look at the headline numbers. nike sales came in higher than expected. -- off an 80 sent basis. the bulk of the earnings came down to a favorable --. that's not worth anything. nike's gross margin, this is what matters, what they make after the cost of goods sold

declined 45%. wall street was looking at 46.6%. so much for freight and logistics costs, the -- with nike has more pricing power and they want to see a higher margin to more than offset the cost. i was surprised, that did not happen. in terms of geography it was down, not good. europe, middle east and africa up 9%. -- down 19 with asia, pacific and latin america up 15. international numbers would have been much better on a constant basis. remember what i said from salesforce, the yen has tanked? all of those are down versus a very strong dollar. normally it is easy to -- but not this time. i think it is a mixed bag, it is not all bad.

china is terrible, that is because of the shutdown. everyone knew it going in. i was discouraged with north america. i need to know more about that. if you have -- categories you can see footwear is holding up while apparel account is down x percent. that surprised me. making things more complicated, -- was not great. nike was forecasting low growth in the 2020 fiscal year but only on constant currency. the -- basis implies actual revenue in the high single digits. a little weaker than they hoped. nike said they will be down 50 basis points which is substantially worse. the -- was not bad enough, nike's -- huge margin of depression and huge currency. i always tell you not to jump to conclusions based on the earnings release, you have to

listen to the conference call. it was a very convoluted conference call. very unusual for nike. very hard to get through. i had to read it twice. read it again this morning and i was not sure what the drama was. at the moment nike's biggest problem is china. the china commentary was more encouraging. nike has leadership in the people's republic and they saw better traffic where lack downs were lifted. -- said during the q&a that we are taking an immediate and long-term view and we are as confident today as we have ever been. coming out of the lockdown we are seeing increased energy from the chinese consumer. i like that. the second biggest problem is the gross margin. it is not a huge hit from the lockdown. nike said the gross margins would have been up 100 basis points thanks to the direct consumer business where they

used digital sales. they are taking a hammer from the ocean freight. the cost of moving a container on a ship is up fivefold. but it is going lower. here's the crescendo. unfortunately, while the cfo, a smart man, use these --. he does not see the situation going back to normal. here's the quote that ended all hope, for a few years. not great. that was the low point. if he had to do it over, i think he would have modified those comments. i welcome him to come on the show to do that. finally nike said to please with the overall level of demand for the products outside of china. the guidance is disappointing. this morning they --. i'm not going to tell you it was a great quarter, but, this is a big but, i do not think the results were as bad. when you include the fact that the stock has been going down,

the long-term story remains intact. put it another way, last week i told you -- which you like and it needs to come down. this is what that looks like. overnight wall street went from expecting nike to earn $4.95 to --. here's the bad line. nike has now reset expectations. i think the downside risk is --. it does not mean that nike is --. i see something with a much better risk reward that it is getting credit for and i would -- if it were to go down from here slowly, but yes it is time. tyler in vermont. >> hello. i love the show progressed him a thank you. i have been chilling with --. if i am hanger he i will go after couple people. what is up? >> i have a question about peloton. they recently changed the

business model and they're going to add in -- and increasing the price of a subscription while losing many customers. my question is, can they turn the company around after it has dropped 125 down to below 10? >> there is good news and bad news. good news is, they have a real heavyweight guy who is running the company. the bad news is, everyone is gunning for him. i think the mayor is fabulous. i think people want to go back to the classes like my wife does. you know what is back on the peloton? the bras. the bras and the shirt are hanging there. what can you do? if you looked at nike's stock price you would think that they

had a stinker of a quarter. it is much more complicated. i think after being down they have a much better risk reward. they are not buying it here, they are buying it here. -- they are caught in the middle of this bidding war. i want to give you the latest on how i see it. it's okay if you don't understand why we obsessive the federal reserve. i am sharing some things for my pathetic past that will hopefully make sense. of course, all of your cars calls in rapidfire in the lightning round.

chefman for the past few months -- has been in a dramatic bidding war for spirit airlines. it is an ultra low cost carrier. that war is coming to an head this week. frontier and spirit announced they planned to merge with every time they came to terms -- got a higher unsolicited bid. he did it again just yesterday. it is hard to keep up with this. spirit shot them down and said they are sticking with their friendship. i do not know if the biden justice department will --. it is a lot more likely to permit a spirit frontier merger then spirit jetblue. the biden administration is --. one of the biggest regrets is that they permitted to midi airlines in the wake of this crisis. i am interested to learn more about this story.

i am happy to have ted christie from airlines here tonight just a couple of days before the special shareholder meeting. we are honored to have you. >> in your words, tell us why someone who has spirit should vote for a dollar lower bid than jetblue? >> it is an equity transaction which will make the appearance look different. we are very excited about the frontier transaction because it allows our shareholders to participate in the industry recovery, the post-pandemic lows where we sit today and considerable synergy between the two this is. they also included enough protection on the backend. it covers all of the aspects. we think this could deliver

north of $15 which is well above where we are today and where jetblue was thinking. our board focused on this . >> how much of your decision is because it would seem to be almost impossible for a jetblue deal to get past the justice department? >> when we heard from jetblue three months ago that was the first thing that came out of our mouse, this is going to be a very high regulatory hurdle. first of all, their strategy would be to remove seats from the planes which is a capacity constraint and that is a no no. they justify the synergy by raising fair and overlapping markets and that's another no- no. those two things make it a difficult transaction to get done. the new layer on top of that they are currently in litigation with the department of justice and northeast alliance american. we view that as being a

nonstarter. we asked them, we need you to explain to us how you are going to get this done in order for us to justify this to our shareholders. they kept throwing up alls and roadblocks every time we wanted to talk about it and refused to do anything to our satisfaction. we already had a bird in hand. we had a creative frontier transaction in front of us that we know delivers a lot of value. it is a very positive regulatory attached to it and it will be great for our team members. our board did a careful review. we had a completely open process to make sure we had a level playing field, we listened to all the proposals and we landed on this for all of those reasons . >> now i want to quote --. the board is now claiming that they have shareholders by approving an amended transaction. they have never negotiated with

us and they favor a transaction that better serves frontier then spirit. is it true you never negotiated? >> all of the name-calling is silly. this is a big public company with a very sophisticated board. i know jetblue has the same and so does frontier. we are in this for the best value that we can get for our shareholders. making sure we have a transaction to get done. going around and name-calling is just fanning big ears. >> you did negotiate. >> absolutely. we listened to all of their proposals. we spent a lot of time with jetblue talking about the regulatory narrative. one thing they were willing to do to convince us that they could get the deal approved, and despite the numerous request for information on the northeast alliance, helping us understand how they made cells, the transaction is a high cost

airline or low-cost airline, we got nothing out of that that would convince us that we got nothing from the end of the day. >> did anyone read the speech to the antitrust commission and the state bar association on the 24th of january? >> we did . >> it basically says that jetblue will not be able to buy spirit. that is what that is about. it says you can't remediate. i don't understand. i was good at antitrust a long time ago, when i read this speech it is clear, they may decide they do not want any mergers. this speech, which is his opening speech, what jetblue wants to do, he will kill. that means both the lawyers and the advisors are simply oblivious to what this man

wants. >> i have to agree. it seems a bit naove to march into it saying we have a similar backdrop between the two transactions. i think it is quite telling upfront that jetblue and their counsel were telling us right away that they intended to --. right there you know they already know this deal will be difficult to get done. >> it is a -- deal. it is three years of litigation and then i'm tried to figure out what your airline is worth. i am not a lawyer, i did not speak to them about this, i know enough, i was not born yesterday, the deal doesn't go through and people who have your stock get crushed. that's the way it works. >> you are making all my points. >> you bet i am. that's why wanted you on.

i see what's happening. i think it is stupid . >> i appreciate your enthusiasm and passion. we are worried about the spirit shareholder and the risk they would be put through over retracted regulatory process with an eventual lawsuit and the prize at the end is reverse termination fee. by the way it is largely sent directly to the shareholders and we have the obligation to pay taxes on the loan forgiveness. it is actually worse. i am concerned on behalf of the business and shareholders and our board was focused on that. they spent a lot of time making sure they have the right deal . >> we do know that we are done approving deals. i think the idea that he has given this speech saying he will not authorize any feel and think go ahead with it is either naove or --, i don't

like either. ted christie, thank you for coming on, on the eve of a very important vote to tell your shareholders the truth. coming up next, kramer is bringing the thunder and answering your questions.

let's go to joe in new jersey. >> thank you for having me on . >> what is happening? >> i have owned dow chemical stock for about six months, should i still hold onto it? >> it is --. i think the yield is fine. i would buy 100 here and there. vince in illinois. >> hello. vince from illinois. i have been watching your show for a long time. i am a -- member and first-time caller. we love you and we love your show. -- it used to be around $80

last year now it's a 15. >> they actually make money so i am not going to tell you to sell it. it is much too rich for my taste. i cannot recommend it. richard. >> yes, sir. it is a pleasure to hear you on the phone. >> what is up? >> -- >> what a stinker that has been. that has been one of the worst stocks and yet tom siebel who started it is one of the best. let's get tom on the show. tom, i know you are a straight shooter i have known you for two decades. come on and explain why this should be bought. christopher from colorado. >> -- with a little respect.

>> you are supposed to sell in a recession. i want to take the other side and by --. that is the conclusion of the lightning round. >> coming up, a lesson for this market that was learned in 1987. make sure you take notes, next. trading isn't just a hobby. it's your future. so you don't lose sight of the big picture, even when you're focused on what's happening right now. and thinkorswim® is right there with you. to help you become a smarter investor.

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coming up, the january 6 the prize hearing. a full recap on the news and at the way. i do not blame anyone for being bored to tears the way we obsess over the federal reserve. for the longest time i did not get it. when i first got to goldman sachs 40 years ago, i have wanted to talk about stock since --. i merely purchase those old stocks. the economy has gotten hot. the next thing you know my favorite stock is hammered the

on recognition and i could not figure out what was going on. people stopped drinking soda, stop shaving. maybe they came up with a better catch up. i knew mike goose was cooked and i could not figure it out. i was able to pull out of the stocks. we sold everything right before the crash of 87 when the market lost order of its value. fed chief alan greenspan said --. thank heaven. i studied that period and listen , try to figure out how i could be so oblivious. why should these consistent stocks with no exposure go down when the economy was going great guns? that was the problem. the economy was hot. that is a boom and bust stock. coca-cola became sources of funds for those stocks. it does not mean it is a stock for all season.

ever since and i tried to run a balance portfolio. the difficulty comes when you try to figure out how far along we are in a rate hike cycle. can you jump the gun and by cyclical stocks because they are in the crosshairs? and analyst had to recommend -- even though we are near the beginning. the only thing -- in a red-hot economy is buying -- make no mistake --. you are fighting the fed and that is a recipe for a disaster. as we get further in your say that will change we are not there yet. we are not only tried to figure out how much a company can earn we need to figure out what wall street will pay for those. what is the multiple. when it comes to home builders i think -- is a lot higher because the urn adjustments are

too high. -- will come down as the fed keeps tightening. you need to know where you are in the business cycle and what that means for your favorite stock -- if you are oblivious like i was in 1987, your portfolio is going to turn into live testimony that could change the course of history a former trump white house insider tells all. i'm shepard smith. this is the news on cnbc >> i was disgusted >> cassidy hutchinson. >> it wasunpatriotic. >> a top aide to trump's chief of staff. >> it was unamerican >> testifying president trump knew the mob had weapons. >> assault rifles, bear spray, body armor. >> yet he wanted the metal detectors removed. >> take th