In a recent appearance on CNBC’s Squawk on the Street, Jim Cramer commented on the potential impact on Wall Street from President Trump’s potential actions against Denmark, Panama, and South Africa. Amongst other actions, the President has vowed to make Denmark’s Greenland territory a part of the US and threatened to cut funding to South Africa over allegations of land confiscations.
Cramer believes that the “street sells” in response to these actions. He stated “That’s what happens. I’m not in any hurry to buy anything. We just were at a high. We had some big turmoil in tech as it was. We got a lot of quarters this week.” However, while the absolute near-term outlook might be uncertain, all sectors aren’t bad. According to Cramer “The only stuff I would think about buying are the drugs, medical device. Because their business, for the most part, not made in China, not made in Mexico. So those are the ones.”
One outcome that was clear from the November election campaigns was that President Trump differs significantly from President Biden when it comes to policy. However, he might continue one aspect of the previous administration. Cramer shared that when it comes to drug prices “Remember, the IRA [Inflation Reduction Act], under Biden, they did lower the prices. I think that’s something that President Trump would continue to do.” He also believes that “It’s a bit of a canard, the drug companies charge a lot here.”
One interesting discussion during the show surrounded hedge fund billionaire Paul Tudor Jones‘ comments about the general economic climate being “precarious.” Cramer took issue with Jones’ word choice. He started by outlining “I want to point out that once again, we have billionaires on. And billionaires always say it’s incredibly precarious.” As a result, Cramer pointed out that “People at home therefore sell and they miss great opportunities to buy because they hear that it’s really precarious from someone who’s a billionaire so therefore it is.”
However, the CNBC TV host urged people to keep investing as “you can’t make money listening to a billionaire because they already have made money.” When asked whether his advice meant that he was encouraging stock buying at a time when markets were dipping he replied “No, look I’m not saying to buy. I’m just saying that’s a very tough word, precarious makes it sound like that we are in a systemic moment. I save that for 2007, 2008 when we were precarious.”
Comparing the President’s current administration to the previous one he commented:
“I think that the president gave us last time some tax cuts ahead so you kind of felt that there was some good things happening. Here he comes up with this first which makes it feel like that you justify what he said on Friday when he said he didn’t care about the markets. Ultimately, David, he does care about the markets. And I don’t think he wants them down badly.”
Cramer also speculated that if tariffs make Canadian oil more expensive then US producers could be incentivized to produce more. He doesn’t “Think they’re going to produce much more because that’s their whole . . .they’ve all tried to keep their production down because they want prices up. That’s what they do.”
Our Methodology
To make our list of the stocks that Jim Cramer talked about, we listed down the stocks he mentioned during CNBC’s Squawk on the Street aired on February 3rd.
For these stocks, we also mentioned the number of hedge fund investors. Why are we interested in the stocks that hedge funds invest in? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here).
Jim Cramer on Union Pacific (UNP): "Railroads? I Just Think We’re Not Being Thoughtful"
An intermodal container train winding through a rural landscape.
Union Pacific Corporation (NYSE:UNP) is a sizable railroad operator whose shares are flat over the past year. The firm has struggled because of a sluggish industrial economy which has reduced the demand for its services. Union Pacific Corporation (NYSE:UNP)’s shares did rise by 5% in January after the firm’s fourth-quarter results led to a $2.96 profit per share which beat analyst estimates of $2.78. In his previous appearances, Cramer has speculated that Union Pacific Corporation (NYSE:UNP) can benefit from a resurgence in the coal market under President Trump. Here are his latest remarks:
“You know Carl not a lot of downgrades today. And I think that there should have been. I think that Loop Capital downgrading a lot of the transports, particularly the railroads, Norfolk Southern, Union Pacific, that made a ton of sense. TSX. Union Pacific brings a huge amount back and forth and back and forth. . . . So I don’t think those are what you buy. And I just think that we are not being thoughtful. A lot of stocks are being downgraded today. Now I’m as negative as say David Kostin from Goldman who’s talking about a five percent decline. But I do think that there should have been more downgrades and because transport, commerce’s going to slow. And the rails in particular because that’s how we get a lot of stuff. Union Pacific’s huge down there. KSU’s huge. Those made sense.”
Overall, UNP ranks 7th on our list of stocks Jim Cramer discusses. While we acknowledge the potential of UNP as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than UNP but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
