tv Mad Money CNBC October 22, 2024 6:00pm-7:00pm EDT
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so, if it can hold in this sort of 150 or above area, i do think it's a compelling contrarian play >> dan >> yeah, kweb has retraced 50% of the move. a little lower, get in there >> guy >> gilead, sister. >> thank you 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.". i'm just trying to make you a little money. my job is not just to entertain but to explain what's going on so call me 1-800-743-cnbc or tweet me @jimcramer. how do you wind up with the day where the recent market
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leaders lose their mojo and money market managers go back to some of the big leader spoke -- like big tech. the dow was down and the and aztec gained. the big fires can't help themselves and leave huge footprints. they have to reach for microsoft. they have to have meta. ever since the fed cut rate the bond prices have plunged. money managers reach for the companies that are not impacted by the change in the 10 year, 20 year, 30 year u.s. treasuries. the rates don't matter that much. neither they nor their clients need to borrow large sums of money so it's relevant to them. apple and nvidia were up really big yesterday so they don't have what microsoft has today. they don't have the mojo. this is pretty much incorrupt
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but who cares. sometimes wall street is like chinatown. many don't bother trying to figure it out. it is what it is. you come to me to figure out how does this happen. how could people abandon recent winners so quickly dropping them like hot french fries in our lap. simple. we had a series of reports that did not add up. they were disappointing. they don't jive with the rather benign moment when we have the fed cutting rates and employment remaining strong. when we have these problematic quarters, several in one day they'd fall back to the tried and true stories we all know and love. yes, titans of tech. the managers can't help themselves. they feel they have to rotate out of what was hot at one point and into something else that is not that impacted by the big rate cut cycle. here's what i want to do. i want to start with the alleged in earnings disappointment. these are really good companies. number one is ge aerospace. there was some weakness in some
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orders and some lingering supply-chain issues. that would not be a big deal except it was already at 90%. people sold first and asked questions later. they don't think, ge has demand ahead and great growth. that takes wisdom. genuine wisdom. who has time for wisdom when you could ring the register. that's how a fantastic stock like ge aerospace closes down nine %. then we look at the pultegroup. they have to offer incentives for people to buy homes. they said we expect incentives to remain elevated for at least the remainder of the year. what incentives? aren't they reeling in the money? we don't need the incentives. but the real loan rates keep running higher. with mortgage
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rates expensive something has to give. it might be the price of the house and that's how they plunged more than 7% today. how about nucor? this should be a huge deal for the fed cutting rates but steel pricing is horrible. they gave a dismal forecast for the current quarter. it took me by surprise. when you do something that causes big estimate cuts they don't try to look past that. they don't know how nucor will have a big 2025 if the fed keeps cutting. that is how the stock goes down 6.5%. gm had a good number but what about auto-parts? shouldn't they be good? don't we like genuine parts? we should but not when it whiffs horribly. you think, we have so many old cars on the road you need to fix them but genuine parts
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seems like a can't miss story then you listen to the conference call. the ceo tells us they are getting slammed by conditions in europe and the industrial business. most people did not even know there is an industrial business in europe. so once again get me out of that one. that's how the stock gets pummeled for a 21% loss. how about safety? can't we huddle when things are uncertain. kimberly-clark says apparently not. they had some problems that hurt the quarter so the sellers body slammed it. if you owned it you wish you were wearing depends which are quintessential amazon products because who wants to buy adult diapers at cvs or walgreens. i think it will come back but not today. that's why it's down 4.5%. so what happens? the souls who treat these stocks have been winners. these people do not own, they rent stocks and they move the
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money to stocks they feel safe and comfortable. that's why microsoft started going up right at the opening bell. people who pay on time regardless of how the company is doing. then you go to meta which also has an extraordinary balance sheet. that a.i. ray bans are huge but they can make so much money from targeted advertising. how about amazon. even as the last quarter was hated suddenly the love. long-term consistency. they like google for the same reason they like amazon and meta with the targeted at . i know that i like apple and nvidia and tesla. we got negative news about iphone sales. it was enough to doing the stock . there was a number from verizon that did not jibe. nvidia did not get much love
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either but the ceo jenson long is headed for a fireside chat. maybe it's a giant sovereign state contract. i would own, not trade apple and nvidia. tesla is a car company so it's genuinely sensitive to the bond market. they have an interest rate concern. the money does flow back to tech titans when the trend goes down in price and up annealed. big money managers get scared of cyclicals and nervous about aerospace. what matters is we've seen this before. it's been happening for more than a decade. don't worry. the money can rotate right back to where it was but you have to wait a couple of days or maybe even just one day. big detect made a big comeback because the bond market. keep in mind the pauses temporary. you should still on some of >> seven but they used to be
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high flyers. they have become levy blanket stocks. moneymakers cat live without those stocks when there are risks. again, nothing too serious. i would buy almost every one of the stocks that i mentioned today. let's go to amy in pennsylvania. >> booyah, jim. how are you doing? >> i'm doing well. how are you? >> i am awesome. thank you for putting some are jingle jingle in our pockets. >> the team is amazing. i was listening to them today which is a change for me. >> mcdonald's is one of the first stocks i've ever bought. it was a great stock to keep the considering right around close it dipped down like $24 a share. should i write it out or get rid of it while i am still ahead. >> this is a great teaching lesson. they did have an e. coli link
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with onions, not beef. they managed to pull everything. everything that is connected has been pulled. do i want to advocate buying a stock down 21 without my knowledge? i will tell you this. i think mcdonald's is a great company and they are about to report next week. i think they will have a terrific quarter. if somebody downgrades then i would pull the trigger. stephen in florida. >> a big florida hanneke you. >> i hope everybody is okay. these hurricanes are scary. >> the question is for my kids. i've always told them they need to buy what they know and the only nontext stock they have is a dud. >> i agree with you. we went over disney this morning at 10:20 for the investing club. we felt very inclined as you did.
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it is time to buy disney. don't forget the big ships coming online and it's so much better than a $96 stock. you have to keep in mind that the pause in the big tech rally is temporary. you can diversify with the big seven. logitech was falling after raising its guidance. i have to tell you i was puzzled about this. i speak with the ceo to hear more about its space in the computer hardware space. then how can rate cuts affect the material stock? as we mentioned, nucor pulled back deeply today. plus, prologis was big. i'm checking in to get a better read on the company have liked since 2009 so stay with cramer.
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the culprit? some nitpicking of the guidance even though they raced the outlook for the second straight quarter, it still implies zero sales growth with flat or declining. you think it sounds unfair? soda why. this could be a tremendous buying opportunity. when we are headed for a pc refresh cycle you want to on this. let's check in with hanneke faber , the ceo. welcome. >> thank you for having me. >> i spent some time trying to figure out what the analysts were talking about. they seem to be concerned you are spending and it's not give any return. i want to put the ball in your court because that does not seem to be right business is good but there was skepticism. maybe you can explain because i don't understand. >> thanks, jim. we completely agree with you.
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it was a great order. quarter for high-quality growth. net sales up 6% driven by demand that was broad-based across all regions, all categories across b to b and b to c. it was a quarter in which we group gross margins by 200 basis points. that give us a lot of confidence to raise guidance. >> i think it is important to point out that you are a company that has a lot of cash on the balance sheet. you have the ability you want to to be able to file the stock you want. when you see something like this it confuses you and confuses me can you say, i'm going to take advantage of it and buy stock? >> we have been buying back a lot of stock. certainly we will keep doing that. >> good. you have 18 new products in in gaming. those who think damon may have stalled out you would not be introducing 18 new products if you think it is stalling out. >> gaming is one of the key
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tales for business. it has been robust globally but we also son the last quarter the u.s. gaming market is up which is great. we are gaining share in the u.s. and in europe. we have come out with a fabulous portfolio of innovations for the holidays. 18 new products included a new pro lineup and a new series for wheels and accessory. the new headset and fantastic collaborations with a really popular gain around the world and the high-end steering wheels. >> i'm sure there was a time when you hear those games you think that's all made with china. if president trump wins than the numbers could take a hit but you've been pretty good in diversifying away from china since we've been following the company all these years. >> absolutely. it's a long-standing practice. we have a great team who roll
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with the punches of whatever happens in the supply chain. a large part of the business is not sourced from china and we are ready for whatever may come after the elections. >> let's talk about the pc refresh cycle. in the last few weeks we've been getting some pushback. it has been four years since the boom and that tends to be the time where people decide they need a new pc. is it playing out? is the new pc refresh cycle playing out? >> i would say there's a mild cycle which is a good thing. we never see a direct correlation, but clearly when people get a new pc we do a great job of placing our products very near both online and brick and mortar. we see some benefit from that and we believe the pc refresh cycle will continue into the new year. >> okay.
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the new guidance implies that net sales in the second half of 2025 could be flat or down slightly. operating margins could come in a little bit light. is that a correct interpretation or two negative husband? >> i would say that is two negative. we've been saying for the last two quarters that's what happening is the net sales in the first half of the fiscal which just ended will be higher than sales out. that's because we ended last year with inventory simply too low. we did not have enough product on shelf. we needed to sell in a little bit more to get those inventories to get the shelves stocked. we said that all along. in the first half cell in and in the second half cell al. we see demand really robust and we expect it to be robust through the second half of the
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fiscal year. gross margins for the year we expect between 42 and 43% which is a very high level in the industry. we are really pleased with that. >> i have to admit i am confused . after making a lot of calls i was shadowboxing against the bears today because you have a return from work that is still working. people are still working from home, a certain percentage. >> absolutely. that continues to be a tailwind for us. around the world about 50% of people are working hybrid. that is great for videoconferencing. that was up 5% in the quarter. it's also great because people need peripherals in the office and at home. we saw especially mice, keyboards doing very well. >> i want to thank you because that puts to rest a lot of my
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concerns. you get these analysts with the negative questions that when you read over, i have to do a broader thesis. i think this was a terrific quarter. i am sticking with your view, hanneke faber . thank you for coming on mad money. >> thank you. >> we have always been very positive this post to this stock and i'm not changing my mind. mad money is back after this. coming up, calling all metalheads. cramer is getting real on steel , next.
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there are all sorts of groups that can suddenly work when the fed starts cutting interest rates. some of them require more time to turn around. most tech industrial and materials stocks take a little bit longer to make a comeback. take nucor, last time they reported >> it was not impressed. the market plunged 6.5% today. this is a great bellwether for the whole material sector. it is clearly going to take some time before the stocks rebound from one rate cut. nucor's results were not a surprise.
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they issue earnings guidance about two weeks before the end of the quarter. this time they announced disappointing earnings per share figures. wall street was looking for $1.73 and management said maybe $1.30, $1.40 thanks to low pricing and weak demand from autos, farm equipment, and household appliances. it did not seem to matter. even before we got the numbers it had a ready fallen 34% to lowe's in mid september. they started upgrading the steel sector and the whole economy gets abused and that is what has happened. long story short. investors were already circling on this one betting that it was ready to bottom. it's not a coincidence that it bottomed on september 11. once we heard that it caught fire because who cares about the current quarter when the fed is about to become her best friend. they were willing to look past the weakness in the third
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quarter, but apparently they are not willing to look past weakness in the fourth quarter which is what we heard about last night. that is what torpedoed the stock today. it was a rude awakening. the numbers were slightly better than expected after the hideous announcement. even though business is down substantially they still deliver clean revenue. it is about $1.49 per share even as it was lower than analysts expected. third-quarter numbers were awful, but everybody knew they would be bad and nobody let that bother them for the past month. so what changed? the outlook. unfortunately the guidance was quite disappointing. they made some grim comments on the conference call for the fourth quarter especially. nucor said unadjusted earnings- per-share will be down from the third quarter they just reported. the steel mills and finished product business are being hit
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weaker volumes and lower average selling prices. the only bright spot is the raw materials where pricing is stable and costs are coming down. so what is going wrong? aside from weakness in key industries like construction, manufacturing, they called out election uncertainty, geopolitical concerns, tight requirements and imports. to be fair they did call out some potential catalysts that could turn things around like more rate cuts, the pent-up demand for construction and an extremely soft landing for the economy but there are a reason that they are potential and not actual catalysts. because they have not happened yet. they confirmed they for navigating economic cycles for five decades and emerge stronger every time. that is true but it's also comfort if it will be worse than the third quarter. the conference call this morning was a mixed bag.
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the ceos prepared remarks, he explained that the federal reserve reason actions are good start but it will likely take more time, more rate relief and looser lending before we start to see the full effect in the market that is so impactful. on the other hand, he called out several markets that do remain white healthy including construction, semiconductors, data centers, and institutional buildings. basically the fed is nucor's friend but this takes a few more rate cuts for the friendship to bond. we will look into next year and beyond for all sorts of things that could turn things around. i think it will turn. that does not mean it is worth buying right now. there's a reason the stock plunged today. i don't think they are doing anything wrong. i was just hoping we would see more signs of turning especially after what we have heard of. the trend clearly is
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not here yet. we probably need more rate cuts before i feel comfortable pounding the table. i talked to jeff marks today. i was thinking maybe this is the right time to buy nucor , and more circumspect after listening to the call. i do think it is worth buying on weakness. i'm starting to get concerned about the relentless rise in interest rates. yesterday we had conflicting message. she said she does not see a reason to stop cutting rates, but then the minneapolis fed president said he favored a slower race of rate cuts. i believe the fed has tamed inflation but we might not get true clarity on the rate hike front -- cut front until after the election. of candidates have inflationary policies in different ways and different extents. two days after the election we
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will learn the outcome. it might be worth putting nucor on hold . that's how i'm approaching it. as much as i would like to tell you to dive in because i've loved it so long, even in the 80s when i was at goldman sachs. after the guidance i'm a little bit sanguine. let me give you the bottom line. if i decide today i would still guess that the fed would keep cutting, rates would come down and those stocks can be big winners. we don't have to decide that today. given that the situation is uncertain we can keep watching and gathering information. it won't be too late to make a decision when we know more about where we are headed. i am again concerned. i was premature thinking it would bottom today. >> my question is about rio
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tinto. is this something i want to buy more of, hold onto or sell it? i could still walk away with a profit. >> i was reading about it today. you need to see china be stronger. if you are going to own that stock. i don't see it happening. it is a week old for me. let's go to adam in georgia. >> i have snap-on tools. should i sell or let it ride? >> i thought that quarter was average. i don't think it's emblematic of what they can do. i think you should hold. i have always been a big believer in the company. i like small business. last quarter they went big and started coming back down.
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as far as i'm concerned the right approach was a good enough quarter. hold onto it. anyway, when it comes down to the material stocks like nucor, we can wait a couple weeks when we see where the fed is headed. after the week slide it was a downgrade. now the arrival of the apple air pots i'm giving you my take on how it could be for health and technology and apple itself. and then we have the lightning round so stay with cramer.
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what do we make of the stock of prologis at these levels? they own warehouses and logistic facilities. they raised their full your forecast and the stock jumped 4.6%. it might become a lot more attractive if the fed is finally a friend with the growth read not going down. so the cofounder and ceo joined me to tell me more. welcome. >> i hope you are doing well. >> your voice sounds better. i did not hear you on the conference call i got worried. >> i had a case of mild covid. >> i'm glad you are feeling better. i felt the conference call
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demonstrated bottoming out. maybe i am too bullish. i think it is on the upswing. disabuse me of that notion. i think the combination of what you are doing with generation capacity for data centers and the fact that the rest of the world is coming back and amazon is doing incredibly well, it seems that other than southern california things are pretty great. >> i would say things are very good. i would not say great. they are not as good as they were and 22 and 23, but southern california is week. we think it is going to take until the middle of next year before it firms up. obviously it's an important market so it does way on those results. i would run this business for the long-term. we have a tremendous mark >> it embedded on our portfolio. the growth of this company, particularly with the new things we are doing, data centers you mentioned but also
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energy and mobility. i think the future is very bright so i don't worry about the quarters. >> if you would like to go over the different corridors. i look at 78 in the east, 95 in the east. this is a little too anecdotal, but i see a lot of land has 70 been taken. it's not like you can add much warehouse space in the city and even along the interstate. where can you possibly build if you wanted to build out new? >> i think that is exactly the point a lot of people miss. speaking about the west coast, california just passed legislation called ab 98 that severely limits the development of new warehouses. in the long-term that is really good for our business because we have a big footprint in california. i think it is going to be increasingly difficult to bring on new supply in these major metro areas. that is where the consumers are
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and that's where the demand is. nobody wants a warehouse in the middle of nowhere. i think the supply picture in the next cycle will be very difficult. demand will normalize once the election is over and interest rates come down. i think everybody has the handbrake on in terms of commitment to new space. they have basically taken too much space in 22 and 23 and they are growing into that. when that is done the amount of new construction that is coming on the market is really going down to a trickle and it will be a very tight market in about a year. >> between now and next year, about a year from now the amazon people i talked with will tell you they intend to have same day for a dramatically larger number of products. what does that mean for prologis? >> the quicker the cycle
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becomes further inventories. the more inventory you need to carry on the closer to the customer the inventory has to be. there's no other way to do it. you can't deem the stuff into somebody's house. that just means more demand in major centers, and as you get to the center, the core if you will, the amount of land available gets even less. that is why, it's not just amazon. it's everybody wants to be close to the customers. that's why owning land and distribution buildings in these major markets is a really good thing for the long-term. >> that is very important. i think that's why it jumped. some people were getting ahead of it and realizing there's just not enough room left. another thing i think is important is larry ellison says maybe we need 2000 data centers. he can't do it alone. he's not in the business.
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that can be you. you see in that kind of demand? people coming to you and saying, we don't know how to do it but we have to have it. >> we see an insatiable demand for data centers. on supply is the availability of power. on facilities alone they will not be able to keep up with the demand. you have to go to off the grid solutions, point solutions, fuel cells, other kinds of generation that is close to these data centers. people are trying all kinds of things including getting close to nuclear power plants and investing in smr small reactor technology and many other things. i think the power needs are insatiable. the demand appears to be insatiable. technology change over time will probably reduce the amount of space you need for these gpu's and they will probably run a little bit cooler.
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it will probably play some kind of a role in these chips, but ultimately there is orders of magnitude more emand than what we are seeing here. there is a really big rush to create supply of data centers to be able to process all of this a.i. that is happening all around the world. >> can you convert empty spaces into something like that? you can say i don't want to build i can buy if i want . is that something you would look at and say, these spaces would be great because we have enough space or the power is so insatiable the grid won't handle it right now? >> all of the above. not only -- we have almost 6000 buildings in our portfolio. 150 of them have data center potential. that means they are near major power generation. they have access to fiber and they are markets where the users want to be. in addition to that we control
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9000 acres of land which can develop another hundred and 50 million square feet of real estate. all of those will not be data centers, but we are in the best position. we also have these customer relationships because interestingly many of these hyper scalars are the people we are doing business with anyway. we think we are in an excellent position to take advantage of that. this is not a new business for us. we built our first data center in 1999 in new england. we have 20 of them in the northern virginia area. this is a business we have been in. it's just scaling up at a very different level with this demand. >> it is important to note, amazon is a top 10 customer, home depot is a top 10 customer. both are committed to cleaners guys. amazon may be the world leader. they have to rely on people like you to make this happen. >> absolutely. i am very optimistic.
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you cannot run a real estate is just like you can run a tech business where quarter by quarter product cycles and what you do don't matter. 96% of our lease is basically control the income for the next year. there is very little you can do with that space. our leases are 40% below market rent. no matter what happens to market rent we will capture that growth, plus all of these other things we've been talking about. >> that is why i want to leave it. i liked your stock since 2009 when you were the first of all of the companies i follow, the legendary bottom. thank you so much. you look good, my friend. >> thank you. good to see you. mad money is back after the break. lightning doesn't strike twice in "cramerica."
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what you hope for when life tosses lemons your way. cirkul, available at walmart and drinkcirkul.com. lightning round is sponsored by charles schwab. trade brilliantly. it's time, it's time for the lightning round. buy, buy, buy, sell, sell, sell, you hear the sound and the lightning round is over. let's start with nick in connecticut. >> how are you, jim? >> good.
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thank you. >> i would like to get you on a company that is profitable on a subscription base which i know we love. clear secure? >> i wanted to have them on the show. i remember different iterations. i did not know they were making money until recently. they should come on the show. let's go to brad in illinois. >> i have a quick question about palantir. >> this is a phenomenal stock. i would let them walk it up. i think the buyers want this to be the best performing stock in the s&p 500.
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let's go to well in connecticut. >> how are you doing? >> i'm doing good. how about you? >> i'm doing well. i have to tell you my mother's name is luis as well. >> that is sweet. also my niece. what's going on? >> the fed is cutting these rates and mortgage rates declining, how quickly do you think it will start to show up in construction stocks, specifically as to be okay. >> on my travel trust should be on this, i thought everybody knew business was going to be bad but then they gave a discouraging forecast. i don't think stanley black & decker will give you a discouraging forecast so i think it is fine. don't sell it. let's go to randy and new york. >> club member from the beginning from the isle of statin. i am talking about tv
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bx. they are doing a lot for renal. >> they are losing a lot of money. i have to do more work because it's losing so much money and the stock is up so much i'm afraid that i would hurt you. that is the conclusion of the lightning round. the lightning round is sponsored by charles schwab. coming up, will people be swapping earplugs for apple airpods at taylor swift's next concert? lend an ear, cramer is giving his take next.
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i have a hearing loss problem. for some reason it is taboo to talk about that you would not believe how many people have the same issue. i did it myself because i blast noyce into my years to block out tinnitus which is an imaginary noise that drives me nuts. it's taboo to talk about that also. my hearing loss problem is fairly recent. i have to get my hearing check semi-regularly. i hope it will come back but it probably won't. there are about 1 billion of us and the planet that need hearing aids. my late father hated wearing his turkey could not get his fingers to put them in well. it made him tough to talk to. i also thought it but insult to injury, according to the journal of american medical association hearing loss accounts for 80% of global dementia cases. is the largest modifiable risk
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factor. if you have hearing loss that could lead to dementia. although i could dramatically lower it by wearing a hearing aid. i got the ones they recommended. i did not know it when i got them but they cost 70s and they don't even work that well and are not covered by insurance. it's a huge and depressing. my second-generation apple airpods can serve as a hearing aid if i update my phone. i could have something comparable to these $7000 hearing aids. it would be very easy to test your hearing on your iphone. if you have mild to moderate hearing loss you can turn your airpods into hearing aids because people wear them all over the place. instead of going to the audiologist for test to find out how much hearing of lost and searching for man -- matching hearing aids i tested them on my iphone and they
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automatically matched. the hearing aids already built into this. i tested them all over the place and they were superior to these $7000 pair. i can cancel the noise i don't want instead of hearing people at the next table as well as i can hear mine. it helps us get choked up about the whole process. i am somebody who is sick of saying pardon me, excuse me, could you repeat that. i do not want to increase my chances of dementia either. years ago i spoke with the apple ceo. he told us he wants his legacy to be about health. >> if you zoom out into the future and you look back and ask the question, what was
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apple's greatest contribution to man time -- mankind it will be about health. our business has always been about enriching people's lives. as we have gotten into healthcare through the watch and other things we have created with research and carry and putting your medical records on the iphone, this is a huge deal. it is something that is very important for people. we are democratizing it. we are taking what has been with the institutions. we are at the front end of this. i do think looking back in the future you will answer that question, apple's most important contribution to mankind has been in health. >> i just want to thank you and your team for doing this with
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the airpods. i'm not going to worry about the hearing aids anymore. i will not demand we watch everything with subtitles. i will just wear the apple headphones. by the way, it's nice to hear well again. thank you, tim. thank you, apple. i always say there's always a bull market somewhere and i promise to help you find it. i'm jim cramer, see you tomorrow. this is good stuff. there's nothing else like it. -♪ it's pure genius ♪ -[ laughs ] my two cents on this thing? we don't want your advice. i hate when you play big shot. [ laughs ] when you say you have a shark and it's mr. wonderful, there's sharks, and then there's [vocalizes] ♪♪ narrator: first into the tank is a genius idea in the beverage space. ♪♪
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