iwm. >> guy >> stephanie back in ec was playing chrissy teigen and something -- might be the worst song ever written. psx, mel >> thank you for watching "fast money. see you back here tomorrow at 5:00 "mad money" with jim cramer starts right now 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 cramerica other people want to make friends. i'm just trying to make you a little money my job is not just to entertain but educate, teach put in context. call me 1-800-743-cnbc tweet me @jimcramer. in bull markets people find reasons to buy everything. >> buy buy buy

>> even if they're for the wrong or at least ant thetical reasons. that's how you get the s&p and nasdaq up to 1.22% and 1.5% respect vly closing at 52-week highs and the dow surging 429 points not far behind them today's session illustrates we still have a normal run-of-the-mill garden variety bull market going despite tough talk from the fed. it's clearly not done raising rates. they just can't stop the thing the bullish setup. let me explain first we have an important event, in this case the fed's meeting yesterday. there are tons of investors who fear anything like this because there always could be a negative surprise, so they just wait and wait and wait. they don't do anything until they see what is said. yesterday there was also another camp that completely freaked out at what the fed says during the press conference and blew out of a huge amount of stocks, sending

the averages lower once the meeting was over, though, and we had a little more time to process what was really said, other sideline investors get anxious and they find reasons to put their money to work and that's what happened today they've got their reasons. but maybe they even make up their reasons. and today the purchases, well, let's just say they were done with reckless abandon. i say that because again, the animal spirits right now control the buyers and they can just as easily craft a story about buying any stock they want so let me give you some of the storylines i saw once i embraced today with the caveat being that even a bull like me is taken aback by the strength we got in the wake of what's already been a terrific run first camp of buyers i said yesterday the fed said it was going to have to talk tough. because inflation's still hot. we might have several more rate hikes to go. but the buyers in this first camp they think jay powell is

bluffing they think he's bluffing they think jay powell won't do what he says, he won't raise rates to the point he's crushing the economy in order to save it. they think the fed's simply talking a tough game, that its bark is worse than its bite and it's not merciless enough to truly bring on the pain. >> the house of pain >> these buyers went to work picking up industrial companies that would be in much better shape if the fed truly does stop tightening when the economy's unimpeded and allowed to run free you buy stocks in companies that make things and do stuff. you've got to remember the most important one, the most probably -- the one that typifies, exemplifies, the best way to say it is caterpillar, which is levered to growth of all kinds pf road construction we have about a trillion dollars of road-u credit thanks to the flood of infrastructure spending from the road construction more oil drilling. and if the fed is bluffing maybe we will need more oil and gas. at least it will certainly raise

the prooss for them. cat does well if china does well we know there's still one more china stimulus package replete with lower rates that could lead to projects that need caterpillar tractors you need their machines to mine for copper and other non-precious metals. and you need machines to build all those new data centers for artificial intelligence. not to mention the new domestic semiconductor factories that will make us less hostage to china and taiwan caterpillar not just because we own it for the charitable trust but normally the stock gets hammered when the fed cracks down on inflation. now there are enough people who no longer believe the fed's tough talk they're convinced the fed hikes are really done, it wasn't just a pause, wasn't just a skip and therefore you've got to buy cat for the long haul. that's how this stock can close at $247, up $4.37 just today of course there's also a considerable bet against cat because the bears think the numbers will prove to be too high given we're headed to a

recession. but they're being overrun. they may have no choice but to buy back their short bet against cat before they lose their year on this one. oh, there were many cats out there today, though, that were running free but we are seeing too many shorts and we're seeing mass capitulation then there's the second camp okay this is the camp that's the opposite the antithetical camp. these people actually take the fed at their word. they're not going to stop tightening until they crush inflation. so you've got to irk is'll the wagons around the companies that thrive in low inflation, low growth or even negative growth scenarios like eli lilly and johnson & johnson. big pharma's more or less re-session proof lilly has the potential for two blockbusters drugs first is monunjaro there will also be trials tore lowering blood pressure and cutting down on heavy drinking because it can cut down your

craving for alcohol. we don't know how it works but here's what it does. it makes heavy drinkers feel like it's 8:00 a.m., not 8:00 p.m., meaning it isn't time for a drink. lilly has a ton of money and it's putting up facties to produce this drug like there's no tomorrow. i think it will be the best-selling drug of all time thanks to the obesity epidemic then lilly has a alzheimer's treatment. j&j, the medical device business that's now thriving because there's a huge backlog of people going to the hospital for non-urgent surgery now that covid's been conquered how strong is the buying given that j&j's stock has been battered for a year by accusations they sold talc can asbestos in it i think the buying is a strong statement these female feel the fwed could do more damage to the economy so it's worth the risk of a lawsuit just to otherwise own this very safe company you could straddle both camps. we own caterpillar and lilly and j&j for the charitable trust i believe in diversification you want to know more about how

diversification really works please join the investing club he with just convened a huge online meeting about these topics the third camp this is the third cam. and this one was very exciting right here on the floor of the exchange this was it. the third camp says that today we just had one of the most successful ipos of all time with mediterranean restaurant chain cava coming public and doubling right out of the gate. don't you want to double we have a cava down the block on wall street and i told you the other day the office loves it. there aren't -- by the way, the people in the office the lines are out the door this mediterranean food is loved by many, not just regionally in the mid-atlantic but nationally. that's the best kind of long-lasting restaurant story stock. so it made sense to double out of the gate. although i told you you've got to be careful. i tell you when you catch a doubly always say ring the register but the buyers who are in this, the ones drawn to cava, they're

drawn by fomo. right? they know money's being made and they dent want to sit it out look for a slew of hot deals now that cava's come out the chute. this is an advertisement that says come back to the casino, come back to the casino. it's mesmerizing it's hallucinating it works final, the money managers who bet this market has to go down, we're supposed to go into recession. and they are short caterpillar like i mentioned and now they've realized those short positions are going to wreck their performance for the year they're running out of reasons to be short and their clients are running out of patience with them the one group that's not being bought aggressively right here is tech because those tech stocks have already had a huge run and some people feel they've peaked i think it makes sense but i still think tech can the at least tread water while other groups catch up. he with just had an amazing quarter from adobe which many people were short because it had

been going up for a long time. and we had a beautiful quarter from oracle where people are still smorting it. they're crazy. we'll speak to adobe later on. they make me very confident we're not done with the phenomenal tech quarters bottom line when you put these four often contradictory groups of buyers together you can get a magnificent run across the board like we had today. ultimately maybe only one camp can really be right but in the interim as the bets are being made almost every kind of stock is going higher. ♪ hallelujah ♪ eric in michigan eric >> caller: jim, how are you doing today? >> eric, i'm telling you, every tom going higher kind of makes me like the market what's going on? >> caller: i'm calling on uber it hit a new 52-week high today. i wanted to get your short-term outlook on the stock do you think we can continue going higher >> yes i think uber has -- i think uber has a number of things going for it and you know what, it really did kind of win.

and i like a winner in the space. uber triumphed why? great management everyone is buying into the market recently is looking like a genius sooner or later not everybody will be but right now ka-ching ka-ching on "mad money" tonight eu charged google with anti-competitive practices i'm checking in with a smaller ad tech player to get a better sense of what could be happening. then lennar painted a rosy picture of what's to come in their quarterly report but should investors take some profits after today's pop or maybe let it ride? and adobe reported after the bell i'm going to go through it and find out what it means for adobe and for the whole market with the ceo so stay with cramer! >> announcer: don't miss a second of "mad money." follow @jim cramer on twitter. have a question? tweet cramer #madtweets send jim an e-mail to

madmoney@cnbc.com. or give us a call at 1-800-743-cnbc miss setngomhi head to madmoney.cnbc.com. ♪♪ at cdw we get your teams work in different places, in different ways and across countless different networks. so how do you get everyone on the same page? microsoft surface devices, orchestrated by cdw. they adapt to each user and deliver multi-layered security, so your workforce gets seamless experiences wherever they roam. for devices that fit your unique workforce, trust microsoft surface and it orchestration by cdw. people who get it.

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now it's clear the federal reserve's definitely not finished raising interest rates you know what we should do we should be circling back to the great secular growth themes that can work even in a slower economy. themes like the rise of ad tech as digital advertisers go to great lengths to make sure they're spending their money as efficiently as possible. which brings me to a french company with a platform that connects advertisers with media owners this is a stock that surged nearly 30% year to date. could be 10% gains as the company reported a really solid quarter in early may so what is the value proposition here let's take a closer look with megan clarkson she's the ceo of criteo s.a.

>> good to seeyou, jim >> i think your company is fascinating as someone who started a website 25 years ago i wish i'd been involved with you. perhaps you can describe why you call yourself the commerce media company. >> because we have a commerce media company. we've an ad tech company so advertising technology, as you know we focus on connecting the buyers and the sellers and we're particularly focused in on commerce media that's ads that are appearing on commerce sites, retailer sites, service provider sites and so we connect them with the buying community and that's why we call ourselves the commerce media company, right in the center of that world. >> at the same time today's a very important day because you launched a site that i think will be terrific, this commerce grid which is the first -- you call it the first supply side platform that provides unique access to your unrivaled commerce shopping system

but i like to say why should i use it and why should i use it, say, instead of the all-powerful google >> well, the commerce grid is about bringing to life or shining a light on all of the ad inventory that sits on the commerce site, retailer sites, so buyers can see it because one of the biggest problems right now for buyers is that they can only really see the big players. so they get through amazon, they get through google, they get through meta and then they have to really search for the other commerce properties, the retailer sites commerce grid really brings that to one place it solves for that fragmentation problem. it lights it up and makes it easier for the buyers to find commerce audiences and inventory on retailer sites. >> okay. one of my absolute favorite companies by far is costco okay rich galantee's the amazing cfo. and they're always saying they've got to do much more to make their website better. would they be someone who could call criteo and say help us?

>> the good news is that costco is already a client of criteo. really important client for us and so forthem it's about lighting up their commerce opportunity on their site. so we work really hard to help facilitate that for them and take them on that journey. but costco along with best buy along with uber we recently signed are all really good examples of those players who are in the retail sector or commerce sector who are now looking at media, selling advertising on those sites as a really significant form of revenue for them >> so today i saw walgreen's is one offer customers and at the top of the walgreen's site was an ad to buy coca-cola it wasn't an ad to buy walgreen's it was an ad to buy coca-cola. is that possible it could be a crit o ad >> it's possible on those sites we serve both ads that are relevant to the site or clients to the site, brands that

actually have products in the store, or we sell non-endemic ads. ads that are relevant to the consumers who might be in the market to buy, for instance, they may be buying luggage but it might be a great place for a travel advertisement something like that where it's quite relevant to the commerce audience, to the person who's on that buyer journey and that's part of the magic of commerce media >> a lot of the retailers i deal with are trying to get you anywhere you can they're not just happy to get you on the website, they want to get you in brick and mortar too. so if i'm an omnichannel retailer does criteo offer me a good bargain proposition >> well, we recently acquired a company called brand crush, a small company out of australia, to start to connect ourselves from the digital experience to the in-store experience. and the reason is that our clients told us that one of their biggest challenges is how do they connect their data from the in-store world, the on-prem

world, to the digital world? how do they make they can follow the consumer's journey all the way through that omni-channel experience so we're leaning into that area to make sure we can service those clients as well and bring an experience for their consumers all the way from in the store, in the home and on the digital side as well >> i want to understand, you represent these retailers. but if i want to place an ad on the retailers i can use you too. is it fair you represent both sides? i know the attorney general, the attorney general of our country thinks it may not be fair that google represents both sides >> we service our clients, and what our clients are looking for is a platform that enables them to easily buy inventory from the publishers and our publishers want us to bring demand. not just a little bit of demand but all the demand we can find, meaning brands and agencies to buy across their sites we are producing an agnostic

marketplace in which they can easily trade in the case of google, i mean, google is dominant they are so dominant that when they do things like that they can shut out others. and i think the issue that we're seeing is where they're shutting out others for us we're a small player. we're focused in commerce media. we're servicing the marketplace to bring more dollars into the marketplace. and to do that effectively means we service both sides. >> well, you have an unbelievable client list, a brand new product and i'm glad you're there because we need as much competition as possible i want to thank megan clarken. he's the ceo of criteo it's really great to meet you. thank you for coming on the slow >> thanks so much for having me. >> "mad money" will be back after the break. >> announcer: coming up, home is where the heart is how about the cash cramer lays the foundation for an investment with a builder next

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if you want to know why the fed can't stop worrying about inflation, look no further than the terrific home builder lennar it's one of the biggest and the best in america. and it reported a fantastic quarter last night we know the cost of shelter stubbornly keeps rising rapidly. as we saw in yesterday's cpi, which is one of the reasons the home builders have been such terrific performers. when you look at the sb home builders etf and that's called the xhb, it bottomed roughly a year ago lennar up more than 90% over the same period. as i told you before, this is an absolutely unprecedented move. when the fed's raising interest rates as it is the home builders are supposed to get steam rolled mortgage prices go up, people stop buying houses but not this time. this time'll the home builders have rallied almost 50% during a

period when the fed has raised interest rates by 425 basis points for heaven's sake the mini banking crisis didn't put a dent in this industry either it is certainly resilient. that's certainly what lennar confirmed when they reported last night in a very important quarter. this company continues to do very, very well. in the three months ending in may lennar's revenue came in 11% higher than expected while they earned $3.01 per share wall street was only looking for $2.33. and that is what i call a colossal beat. it's why the stock soared five bukds today. five bucks when you drill down on the operating metrics they're tremendous deliveries of more than 17,000 homes when lennar was guiding just 15 to 16,000. it's a lot more homes. average sales price came in nearly six grand higher than anticipated. the company's home building gross margins clocked in at 22.5%. that is a full percentage point above the high end of management guidance despite all the things people are supposed to be worried about, they're supposed to be worried about supply chain management, worried about raw

costs. but no >> the house of pleasure >> looking to the future lennar's new orders came in at 17,885 that's more than 1,200 above what the analysts were looking for. new order value, orders were va valued, this he were only supposed to be 7.71 billion. the real number turned out to be 8.17 billion these are gigantic beats i found them breathtaking when i read them. only the backlog came in a bit light and i think that's fine. best of all, though, lennar's not terrified of an impending recession. they're not worried that the housing bull market is on its last legs as some of the others are. when you look at the guidance, management's clearly feeling very confident about the future. for the current quarter they're talking about new orders of 18,000 to 19,000 homes do you know the street was only looking for 15,300 for deliveries new home sales they sealed the deal on management talking about 17,750 to 18,250. again, the street was only looking for 16,500

these are monstrous numbers. for the full year lennar raised its delivery forecast substantially. 5,000 units higher at the mid-point. well above what analysts were looking for. they say average sale price for the current quarter will be consistent with the period they just reported, which is terrific news for the home building industry but obviously awful for a federal reserve that's trying to get knees home prices down. the fed wants prices cheaper, not staying elevated management also talked about a major uptick in gross margins for the full year, 100 to 150 basis points higher than what they just reported they're making a lot of money for homes. in short, lennar's business is on fire and these guys clearly believe it will stay on fire at least through the end of the year in the conference call executive chairman stewart miller, his father founded the company, he's one of the best in the business, painted an incredibly encouraging picture, again, for a home builder with fed tightening listen to this. "during the quarter we continued to see the housing market normalize and recover from the fed's 2022 aggressive interest rate hikes in response to elevated inflation." miller went on to say, "as consumers have come to accept a

new normal range for interest rates, demand has accelerated, leaving the market to reconcile the chronic supply shortage derived from over a decade of production deficits. in other words, not making enough houses. we have just not been building enough we have not been able to come anywhere near demand, anywhere between 2 million and 7 million homes people think we don't have enough of. and without a recession let's just say we're not going to solve the problem. putting it all together miller makes the situation crystal clear. simply put he says, "america needs more housing particularly affordable workforce housing. and demand is strong when price and interest rates are affordable." as i've told you before, lennar's zrajt is to meet prospective buyers where they are in terms of price. they want to be consistently moving houses. they work very hard to avoid having too much inventory at any given time that's what really depresses the price of homes, by the way so if demand softens a bit they're happy to compromise on price. they just don't want a lot of inventory. the strategy's clearly working lennar's selling many more homes

than expected and pricing solidly. just the average price is down roughly 10% from its peak last year here's some good news for the fed. 10% is not enough for jay powell he wants housing prices rolled back much more, given that home building -- let's say that home builders have not committed to overbuilding speaking of encouraging signs on the inflation side lennar's home building gross margins were incredibly strong. management attributed that to cost reductions, a welcome addition to the story. i expected this quarter to be good but i didn't think they could get the costs under control like this. i thought management would still be griping about the costs of labor, raw materials but they were just bragging about getting their selling, general administrative expense down to 6.7% of revenue. previously they guided for 7.2 to 7.4%. it's breathtaking how good it was. frankly it was just a simply flat out great quarter and i think lennar can keep working its way higher even if this is the last thing the fed may want to see. the most important part, though, they talk about the new normal, a situation where long gotten

over covid, we're less fixated on the federal reserve because they'll probably only hit us with a couple rate hikes anyway and the fed's latest rate hikes haven't had an impact on long-term rates, which is what matters to the housing industry because that's what mortgage rates are priced off of. long rates peaked last october and they're still down from their highs. in this new normal where covid nor the fed can dominate the conversation what matters is we sfl i why don't have enough homes for sale no wonder lennar can keep putting up terrific numbers in the end we have too many home buyers and not enough housing stock to meet demand thanks to zoning restrictions and other anti-construction attitudes that tend to proliferate among local governments because existing home owners taken as a group don't like anything that might make their homes less valuable more on that later in the show so the bottom line, i have been recommending the home builders for ages, right through all these rate hikes and until we heard from lennar last night i think this value's got legs you've got my blessing to buy this one although you might want

to wait for market pulldown given the stock is up five points it doesn't have the firepower to make that happen right now only more homes lower rents and higher unemployment can make that happen and the fed can only influence the latter which is just one part of the equation no wonder houses are up 40% in value from 2019. there's just not enough of them to go around dave in illinois dave >> caller: dr. cramer. good day in the market for a change how are you? >> i like this market very much, dave particularly because you're on the phone talking to me. what's going on? >> caller: jim, home builders have been previously under pressure with 15 consecutive rate hikes now they are rebounding a bit from the fed's last pause. 30-year fixed rates have come down to around 6 1/2%. at $39 billion market cap this stock is also a good value just under five times forward

earnings of course i'm talking about dr horton so jim, now up 5% in just one month. how do you see dhi going higher from here? >> dave, i think the home -- i never thought i would ever say this to you or anyone else but the home business is no longer cyclical the home business is dependent on the fact that there's far fewer sellers than there are buyers because of a series of things that happened during covid. and dr horton, as you know, can go much higher all right. look, lennar is up five points today. i like this stock. i don't like to come in up five. maybe you wait for marketwide pullback but you've got my blessing because you know why because i think we don't have enough homes and the rally's still got legs to it much more "mad money" including my post-earnings exclusive with the soaring stock adobe. let's speak with the ceo by the way, in this quarter all eyes are on ai

a mover for the company with the company's top brass. and i've got answers plus all your calls rapid fire in tonight's edition of the "lightning round." so stay with cramer. (swords clashing) -had enough? -no... arthritis. here. aspercreme arthritis. full prescription-strength? reduces inflammation? thank the gods. don't thank them too soon. kick pain in the aspercreme.

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in this market any company with a legitimate argument its business has been improved by ai can be rewarded with a much higher stock price that's what i'm thinking about as i see adobe which closed at a new 52-week high continued to roar in after hours trading after an amazing quarter the digital media marketing software kingpin just reported some magnificent numbers after the close. solid top and bottom line beat, strong guidance for the current

quarter and raised full-year outlook to boot. at the same time management had some terrific things to say about its new generative ai platform firefly you about don't take it from me. let's check in with shantanu narayen. mr. narayen, welcome back to "mad money." >> it's great to be back on your show, jim. in this world of generative ai i'm actually really on your show >> one thing that's amazing, so many people are saying jim, this ai, you're overdoing it, it's not going to make a lot of money. i think since march 31 i have never seen more activity, more profitable activity done at adobe in such a short time because of ai. >> the innovative roadmap, jim, to your point has been truly awe inspiring. we have not only introduced firefly, where we've had over half a billion generations that have been created so far, but in

addition to that what we've done with the interfaces that people using whether it's generative fill in photoshop or it's generative recolor in illustrator, that's where the excitement is. and we introduced a brand new adobe express as well that's also integrated firefly so that everybody, whether you're a small or medium business owner, whether you're the largest enterprise in the world or whether you're a kindergarten student can now take what you have in your mind and quickly create what you want to create >> there are some great words that you say and the line i like best about that is that this is both great for productivity, and i think people are starting to get that, but also magic give me some magic, shantanu >> well, what we now do, jim, both in photoshop as well as in firefly is you can describe what you want to do and the computer, as you know, the term used in generative ai is it hallucinates and it's almost like you can focus on exactly what you want the output to be and the

computer does this magic and so often, as i've been playing with it, i tell myself, how did it do that it really is this sort of incredible co-pilot or agent on your behalf that's able to understand what you're trying to accomplish and before you even have the desire to do it does it for you. >> i am told of small and medium-sized businesses, people i know, i know in my own life, who would have something it might take two weeks to do with a dress, two weeks to do with a swimsuit, they can do in hours with firefly the productivity gains must be outstanding here. >> it absolutely is, jim and part of the conversation that everybody has associated with this, is this going to replace human ingenuity or is it going to augment human ingenuity? i think it's actually going to make people so much more productive it's going to bring so many more marketing folks or small or medium business into the fold in

terms of saying we have this creative idea and now we can use the tools even more easily to create it. and so it really is about this accelerant it's about more affordability. and it's about more accessibility. and adobe has always won when we solve problems and we allow more people into the -- >> you said this was going to keep down costs. a lot of people like larry fink who's terrific at saying listen, we might be able to save a little money because of ai, you think this can be done superior product and in many cases cost less >> that's absolutely the case. we have demonstrated over the decades we have been in business that we can actually not only increase our top line growth but the bottom line. and that is exactly the way all enterprises have to think about it, which is how am i making all of the content that i'm creating and most companies are probably creating five times the amount of content that they created in the past

how can i make that more efficient? if you're a company like cnbc, we can take all of the assets that you have, we can tweak the firefly model so that it's exclusively for cnbc,and then you can use that now to create any variations or personalizations that you want to create for that so without a doubt it actually helps both the creativity but it also helps the automation and productivity >> did you know six months ago that you could issue a product at the end of march that would have half a billion generations, here we are june 15th? >> it really has overwhelmed us, you know, jim, in terms of how quickly the adoption has been. i think we were excited about it when we first saw it within the company. but the company response, the customer sentiment, the which the community has actually rallied around it. i mean, you can go on any of these social media sites and people are spending all day looking at what people are doing

with generative fill in photoshop. we are so honored where the community has embraced the technology, they've embraced how we've gone about it with respect to making sure it's commercially safe and thinking about the intellectual property. and you know, today's another great day for adobe because not just because of that but it's the 30th anniversary today of the day on which we released pdf. exactly. >> shantanu, how come it lasted 30 years how come it's as fresh as when it was first invented? >> well, today is the anniversary of acrobat, jim, and john warnock is actually in the building today and he's going to speak to the vision that he had about how he wanted to change how the world was able to communicate and share information. he saw the internet coming before the internet had really exploded he understood this intrinsic desire that people have about sharing information. and we could not be more proud of the impact that we've had

we have trillions of pdfs that actually represent the wisdom of the world. and the fact that adobe has played a role in this is just so inspiring. >> well, 30 years went by very fast i remember when it came out a lot of people thought that it would not be as big a game changer. it turned out to be as big as almost anything that's ever come out of software, hasn't it >> it really has it really has. and it started with humble beginnings and i think the creativity and the monetization as well to make the reader ubiquitous and make the reader accessible for everybody and on every single device was to fundamental to the success that we've had with acrobat and pdf. >> one last question i didn't read anything about the macro. is the product -- are your products just overtaking the macro because they're so exciting and important right now? >> well, digital is a tailwind, jim. and you know, irrespective of what happens in the macro,

people are going to invest in digital because it is transforming life as we know it, work, play and entertainment you know, a company like adobe, we just have to focus on continuously driving innovation, and we're building the company for the long run and so even if there are macro blips it's not going to change the fundamental trajectory of adobe. >> no, it sure isn't this was a great quarter it's going to be an unbelievable year you're the first person i have seen, i'm not kidding, that has taken this product and run with it in a in a that people are going to be looking back and say and that guy understood what could be done with ai. shantanu narayen, chairman and ceo of adobe, thank you so much for coming on the show >> thanks for having me, jim always a pleasure. >> thank you congratulations on an amazing quarter. "mad money's" back after the break. >> announcer: coming up -- what's on your mind, cramerica give us a call the "lightning round" is storming the nyse. next

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it is time it's time for the "lightning round" on cramer's "mad money. play until you hear this sound and then the "lightning round" is over. are you ready skee-daddy time for the "lightning round" on cramer's "mad money. time for brendan in new jersey what's going on, partner what's happening >> caller: yeah, well, i made a website which uses chatgpt to rank stocks, and the number two stock right now is earthstone energy and i was curious about it >> while i appreciate chat, there are so many better oil companies than that one. let me start with, say, why not pioneer. why not diamondback? why not coatera?

i appreciate chat but chat ain't that good. let's go to chad in virginia chad >> caller: hey, how are you doing, cramer? >> i'm doing well. how about you? >> caller: doing great recently congestion tolls were to be used at the end of this year in new york city and this might be something to follow what's your thought on barrow mobility >> i'm intrigued by this company because they offer all sorts of packages like that it reminds me of when i first saw that thing when you go through -- going over a bridge and you saw the thing that looked at your license plate and you didn't have to pay the toll. i like what these guys have to say. i want them on the show. verra mobility must be on the show. let's go to bob in new york. bob. >> caller: hey, jim, first of all, watching you three guys in the morning is a great way to start the day. >> yes >> caller: i want to let you know that. jim, two things about microsoft. number one, what do you think ai brings to the revenue line for microsoft? and second, i spoke to you about a year and a half ago and i

asked you if you put microsoft in the same category as apple, own it don't trade it. and your answer was yes. when you look at the cramer pantheon of stocks, what happened to microsoft? >> well, microsoft is doing incredibly well. it's just very big here's what i'll say about microsoft, by the way. they are the number one place that people feel most comfortable working with chat. why? they put the big investment in but mostly because they put it through almost all of their different brands and that works very well some people only put it through some brands. microsoft has been very smart and co-pilot is apparently an amazing, amazing pilot i've got to learn. i'm going to be a co-pilot let's go to nathan in texas. nathan >> caller: hello mr. cramer >> yeah. nathan >> caller: what do you think of carvana? >> okay. there's two carvanas there's carvana the company which i think is incredibly overvalued and there's carvana the stock which keeps going higher those are two different

things you pick which one you believe in let's go to vince in ohio. vince. >> caller: what's up, jim? first-time caller from cleveland. big boo-yah. >> cleveland is the fourth fastest growing city in america. how do you like that >> caller: not bad and we got good weather. the stock i'm calling about today is pbr i know you like energy companies and a little dividend catch to it >> i like pbr. a nice cold pbr. here's the problem the fact it's located in brazil. it's an imbalanced country i would be a seller of pbr and that ladies and gentlemen is the conclusion of the "lightning round" >> announcer: the "lightning round" is sponsored by td ameritrade coming up, cramer goes around the horn flio t e bottom look at inatn,heconomy and your money. next you ok, man? the internet is telling me a million different ways i should be trading. look! what's up my trade dogs? you should be listening to me.

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you can't blame any of the hawks on the fed for feeling just incredibly frustrated yes, lots of goods and services are actually getting cheaper according to the cpi data we got earlier this week may was the coolest month for inflation since march of 2021. but there's a problem underneath excluding food, which is higher, and energy, which is much lower, the cpi's up 5.3% year over year which is still pretty darn hot certainly much more alarming than the 4% headline number and

well above the 2% number they'd like to see. the culprit, it's actually one particular area, and it's the shelter index, which is up 8% year over year the cost of shelter now accounts for roughly 70% of the real inflation in this country. while the cpi doesn't include the cost of buying a house it does measure rent and rent is staying stubbornly higher. vacant apartments are now filled in 38 days, up from 32 there are eight prospective renters for each unit down from 11 ooh. okay but not enough the pandemic and the elimination of the state and local tax deductions created an imbalance pretty much everywhere when it comes to shelter but the main thing pushing rents higher is the lack of affordable new homes for renters to naturally gravitate to so prospective renters keep bidding up the same brands this is why the fed has a reason to be fearful. it's also why so many on wall street are dead wrong when they expect the fed will be able to ku9 rates by the end of the year no jay powell says they're not going to do that, and they're not. they need to be afraid of this kind of inflation.

because while we hear lots of anecdotes about how the consumer's feeling pinched that's certainly not what their bank accounts are saying bank of america's very granular with this data they have 68 million customers who are still doing way better than they were before covid in the aggregate at least and they have 40% more in their savings accounts than they did pre-pandemic that's an awful lot of money and therefore it takes a lot of time for them to burn through that money, especially when credit quality remains as high and interest rates as low as they are that means fewer evictions, fewer bankruptcies, a few things that normally create more vacancies at this point in the business cycle, albeit in a brutal way but it's not happening second thing is an astounding figure that looms larger than everything pems as the great home depot told us in its terrific analyst day, home prices are up 40% since 2019 that has created $1313 trillionn value and we should cheer that and home depot is terrific to talk about it. but home depot also admits it's extremely inflationary

so the fed has plenty to worry about if it ever wants to get the cost of shelter under control and it must do so if anyone wants a reasonably priced roof over their heads. you want one i want one. i think it's imperative for the country. as lennar told us last night we're not building enough homes. it's actually down 300,000 units from last year why? because the home builders fear a recession just like everybody else they fear all these rate hikes would crush demand but that it only happened for a couple months before demand snapped right back second, we have so little inventory away from new homes because 40% of owner-occupied homes have no mortgage at all. and of those with mortgages 80% have rates locked in at 5% or below. those folks aren't likely to sell because they'll end up trading their cheap mortgage for an expensive one what could roll back the ridiculously high cost of shelter? ideally we'd get more supply but we're not seeing a major wave and that's what we need given we've got a massive housing shortage could be anywhere from 2 million to 7 million units

the fed can't solve the supply problem every time they say something hawkish the home builders just hunker down and build fewer homes. at least lennar was willing to say they might not do that they're getting a little more courageous what about demand? in theory the fed can tamp down demand by creating huge job losses only with massive firings will renters move back in with their parents, taking them out of the market if we get higher unemployment on top of student loan payments coming due again that might make a major debt in emd did, which is the only thing that realistically is going to push down the cost of rent. if renters move back in with their parents and rents become more reasonable, that will create excess inventory and end the inflationary spiral. that's how they can do it. but gore thatfor that to happend needs to engineer millions of firings. and so far the rate hikes haven't done much on the job front. and that would cause the recession that we do not want to see. look, we have a free market economy. the fed can't just ask the home builders to crush their own profits nor can they ask the

landlords to cut tenants some slack. all they can do is continue to make people poorer by hiking interest rates that's exactly what they're going to do if they want to slay the real inflation train the shelter we all deserve but increasingly we can't afford i like to say there's always a bull market somewhere and i promise to try to find it for you right here on i am brian sullivan. tonight, the ipo floodgates just open. cava blows the roof off of it public debut. goldman sachs, its role around the silicon valley bank collapse now being trolled by the fed. one carmaker topped on the absolute tear, and it is not tesla. it may just change the entire ev game. want to buy a house, good luck finding month. the housing shortage. one of