The stock market should’ve been down Tuesday, Jim Cramer told his Mad Money viewers, but instead, we had a great run. How’d that happen? It wasn’t bonds, earnings, or housing starts that drove stock prices higher, nor was it any good news on the inflation front.
The real reason for today’s rally was sentiment — positive sentiment to be exact.
When interest rates are on the rise, that’s actually a great time to invest. That’s because if the Federal Reserve does it right, the economy has a so-called soft landing, which creates the perfect environment for companies to profit and stocks to soar.
If you look across the globe right now, you’ll see that America has a number of advantages that short-sighted investors cannot see. Energy prices are rising around the world, but here in the U.S., we have abundant supplies of oil and natural gas to last us another 100 years. It will take some time to ramp up production to meet demand, but that’s something most other countries simply cannot do.
Then there’s Covid. America has the best vaccines in the world and our time with Covid is quickly fading. That’s not the case in China, where Covid lockdowns and authoritarian policies are crippling the Chinese economy.
Add it all up, and America has the edge on the rest of the world. That’s why our stock market will once again lead the world higher, Cramer said.
Executive Decision: Plug Power
In his first “Executive Decision” segment, Cramer spoke with Andy Marsh, president and CEO of Plug Power (PLUG) – Get Plug Power Inc. Report, providers of green hydrogen. Shares of Plug Power were up 9.7% Tuesday on the announcement of an expanded partnership with Walmart (WMT) – Get Walmart Inc. Report.
Marsh explained that Plug Power currently provides Walmart with 9,500 hydrogen powered forklifts, but now will expand their green hydrogen infrastructure to include stationary power and mobility solutions as well. Walmart wants to reduce its carbon footprint, Marsh said, and hydrogen is the way to get there.
Plug Power is also expanding into Europe, helping the oil and gas strapped continent expand their infrastructure with more hydrogen power.
Hydrogen made with renewable energy is rapidly becoming competitive with other fuel sources, Marsh added, which makes replacing dirty diesel fuels very attractive for many companies.
Executive Decision: Bank of America
For his second “Executive Decision” segment, Cramer also spoke with Brian Moynihan, chairman and CEO of Bank of America (BAC) – Get Bank of America Corp Report, which still trades at just 12 times earnings, despite a 3.4% run Monday and another 1.8% gain in Tuesday’s session.
Moynihan said the organic growth engine at Bank of America is alive and well. Revenues are up, expenses are down and operating leverage is increasing, he said, thanks to increased loan growth and wealth management fees.
Overall, Moynihan painted a bullish picture, saying simply, “don’t fight the American consumer.” Consumers are earning more, saving more and spending more, he said, and Bank of America is there to capitalize on those trends with digital offerings, physical branches, and new wealth management services.
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Bank of America has undergone a multiyear investment in everything digital, Moynihan added, and customers love it.
Executive Decision: Prologis
For his final “Executive Decision” segment, Cramer checked in Hamid Moghadam, chairman and CEO of Prologis (PLD) – Get Prologis, Inc. Report, the logistics REIT that just posted an 8.7% increase in operating income during its most recent quarter as the demand for efficient logistics intensifies. Shares of Prologis closed the day up 4%.
Prologis is in the business of moving boxes from Point A to Point B, Moghadam said, and increasingly, those points are in different countries, which makes Prologis more and more a global company. There is still plenty of growth overseas and plenty of transformation here at home to keep Prologis growing for years to come, he said.
The hardest part of the business isn’t finding customers, Moghadam said, it’s finding real estate to expand. That’s why his company is increasingly building up with multistory facilities, and redeveloping properties of all kinds to meet new demands.
Prologis is also actively recruiting workers with a new community workforce program that aims to train up to 25,000 people to work inside their facilities.
Moghadam added that Prologis is also investing in rooftop solar to help meet the growing demand for renewable power at facilities.
In the Lightning Round, Cramer was bullish on Vale (VALE) – Get Vale SA Report, CNA Financial (CNA) – Get CNA Financial Corporation Report and Gladstone Land (LAND) – Get Gladstone Land Corp. Report.
Cramer was bearish on Veru (VERU) – Get Veru Inc Report and Allego ALLG.
Unpacking Musk’s Twitter Offer
In his “No Huddle Offense” segment, Cramer pondered why Twitter’s (TWTR) – Get Twitter, Inc. Report board of directors is so opposed to accepting Elon Musk’s buyout offer. He said the issue is Musk’s “best and final” language.
Boards of directors are obligated to do what’s best for shareholders. Accepting the first and only bid could open them up to liability.
That said, what’s the alternative? Twitter’s past, and current, management has done little to create value or reward shareholders. According to Cramer, Musk is the company’s only hope, as he knows what Twitter users really want and need from the service.
Without Musk, shares of Twitter could fall into the low $30s, Cramer said, making the board of directors “look like morons.”
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