>> or dogs. no animals. >> allegan, great ceo, get it done. >> i'm melissa lee. tomorrow at 5:00 more f-fun. don't go 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. 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 save you some money. my job isn't just to entertain but to teach and coach you. call me at 1-800-743-cnbc. or tweet me @jimcramer. remember when this year was written off as a loser? remember ten days ago when the world was falling apart and the pressure was on to sell everything? we have been unwinding that panic for days including today's
rally. s&p climbing 1.54%. nasdaq gaining. what happened to make everyone go from negative to positive practically overnight? primary catalyst is the strength in oil. as long as oil hangs in there, roars higher there won't be big defaults in the oil patch, just small ones. we saw it today. the run on crude is incredible. crude, crude everywhere and not a drop to be able to -- you can't find storage. you can always tell this kind of thing that oil is in control by looking at how the s&p 500 futures trade before the stock market opens. the so-called overnights. last night with oil up 75 cents the futures looked like they would take stocks up a half percent. as the oil futures traded up to double that, the s&p futures suggested that the market would rally up a full percent. it is lock step. in the second positive factor, second factors crept into the
market and we'll talk about it though it's political. it is being over looked. bernie sanders, looking like a paper tiger. with a small loss he's now buried alive. now we are hearing about how hillary clinton has locked audiotape huge number of super delegates and it could be impossible for sanders to win. where did that come from? i have been saying when we get clarity in the presidential race it's good for the stock market. since the media likes a horse race, be careful. when the map turns to sanders in a month. maybe the press will declare he's come back from the dead. knocking out sanders, if he's knocked out, as every piece of journalism i saw this weekend post nevada suggested allows hillary to go back to a moderate which is friendly to wall street and happy to take wall street's money. on the republican side the immediate is trying to keep
marco rubio alive. i expect trump to go after marco rubio in a way he are yous the day he announced for president. now you have a pro business republican versus a pro business democrat. maybe that's why the market is strong now. trump doesn't have much good to say about the banks. he's reserved a special lash against hedge funds but as long as sanders is a threat expect invective against the banks and drug companies from hillary's camp. they are huge targets for the left. clinton has taken millions in donations over the years from the drug companies. we know johnson & johnson, bristol-myers, etna are among her biggest givers. you have to believe she can ease up on the anti-business rhetoric. there is a dialogue. it will be a lot less heated if sanders is sidelined. call me skeptical since we are three states in. it seems like what the market has been saying. hillery spent time with wall streeters of the hedge fund and
investment banking variety. this doesn't mean they own her candidacy but there is a dialogue which is more than sanders or president obama offered. the market knows hillary's moderate stance. it's why you see drug and bank stocks flying and why biotech is quite a bit. the rhetoric could really die down. the tweets could become fewer and far between. why not? if hillary runs against donald she needs every penny she can get. we have trump who seems like the favorite. he's pure gold when it comes to the stock market and business. perhaps the most pro business candidate in history. after the media pronounced sanders is a goner and trump is unstoppable we could return to the days when there are business people around the next president who matter who and things could get done. don't forget hillary sat on the board of walmart once surrounded by captains of industry, six years. you don't sit there and rail against capitalism. that's not all that drove the market today.
we got wind of a potential deal. thank you david faber. united technologies was up big. when faber broke the story it was brilliant. i have no idea if the deal could be consummated because of anti-trust concerns but this is one of my worries about 2016, the lack of merger activity being assuaged before our eyes. the ceo of honeywell trying to get it before earnings turn around. we wait for the other shoe to drop in china. it hasn't. highly visible chinese plays. it's remarkable how positive the moves are. china has been off the radar so the shorts can't press bets and many big companies, the stocks just got too cheap. they are rallying back to reasonable levels aided by honeywell. in one of the most bizarre twists yet just last week stocks roared higher today.
you should go listen to the call. down beat about the farmers and prospects of 2016. so what? more on that later. the stock is running. these were calls that colored trading in a negative way. last friday, now they are winners. that's fast. not like anything happening. nordstrom up 4.47%. no news. they had a negative quarter. oil going higher. two pro business candidates. neither is a friend of wall street. a chinese story that refuses to get negative. earnings forgiveness have created a benign moment of good feelings for stocks ten days after everyone gave up on them. the stunning turn cannot be dismissed. it may not reflect anything but short-term considerations. we have now once again gotten over bought and are due for a downtu downturn. troy in florida, please. troy. >> yes, boo-yah, jim. >> boo-yah, troy. >> caller: i was watching this morning and you --
>> my charitable trust owns both. disappointed in bank of america. nice pay raise for the ceo. the stock is doing better. in the old days i would turn myself upside down for comic relief. now i can't do it. the ceo came on "mad money" and brian moynahan, please come on "mad money" to explain the way john stump did. john said, listen, we have bad oil and gas loans but we are criticizing them, checking them out and i have faith stump will get out without big charges. they have a giant mortgage book of business. now bank of america as -- cheap. wells fargo is great . dennis in michigan. dennis. >> caller: hi, jim. what are your thoughts on the airline stocks, in particular delta and jetblue? >> i came out last week, did a piece and the week before another piece saying the stocks
are too cheap. when i see five, six, seven times earnings that's ridiculous. i like delta and i like american. i think they should be bought. i like southwest very much. i'm el in the bullpen for action owners my charitable trust. nick in illinois. nick. >> caller: boo-yah, jim. >> boo-yah, nick. >> caller: been watching your show since i was a little kid with my mom after school. >> how do you like that? my producer has been here longer than i am. she's a grandma now. just kidding. what's up? >> caller: my question regarding tesla is given the rebound in price do you think it is a good guy boou? >> same thing on tesla. people get tired of it. but it is a cold stock. there are people who like tesla so much they will buy the stock. it doesn't matter about valuation. doesn't matter about earnings per share. doesn't matter if they are making money for a car. you can't deny them el the right to buy tesla.
it's like a first amendment issue. all right. this turn can't be that easily dismissed even if it reflects temporary news, enough good news to cause the market to rally big. tonight, is gap taking the fall into the gap campaign too literal? they have struggled. you will want to hear it. then a tale of two retail stocks. columbia and vf corp. last year a $160 billion the deal to form the largest drug company. i get an update from allergan after earnings. so stick with cramer! >> announcer: don't miss a second of "mad money." follow @jimcramer on twitter. have a question? tweet cramer, #madtweets. send jim an e-mail to email@example.com or give us a call at 1-800-743-cnbc. miss something? head to madmoney.cnbc.com.
now that the market is finding its footing with another good day for averages i think it is worth continuing to explore the anatomy of a broken stock. why? in this environment you have to tell the difference between beaten down stocks that deserve your money, deserve to be bought and stocks that deserve to be beaten some more which brings me to the gap. gps, parent company of banana republic, old navy. during the late 1990s and early 2000s you couldn't walk down the block without running into a new gap store. business cooled off for a decade until gap launched an impressive come back a few years ago. the stock roared higher in 2012. then 26% in 2013. another 8% in 2014. what a winner. for a while it seemed gap had gotten its groof back. then, boy, oh, boy, did the
narrative change. last year shares of the gap plummeted 41% from $42 down to 24 and change. ouc ouch. while the stock has rebounded nearly 10% since the beginning of 2016 it's well off recent highs. 10% from summer. to say nothing of the all time highs from back before the dot come bubble burst. i'm sorry. it won't -- we'll fix it in post production. what happened here? how did we go from the fall into the gap to the gap falling perpetually. how do we explain the rise and fall of the gap? let's start with the turn around in 2011. a lot of people believed gap could be back to its glory days. during this period the company did a lot right. restructuring the business to reflect the fact they own a portfolio of brands with umpbd perform ing stores of gap and
old navy. investing in supply chain systems to make it more productive and boost margins. getting a cooler look at banana republic. the result after under performance the gap put up good numbers in 2012 where they delivered the fist annual positive same store sales growth in eight years. unbelievable. after that the gap was off to the races. the business improved and the company became a cast machine. it was the hall seen era for gap. lately it's run out of steam. perhaps the first sign of doom for the gap came when the architect of the company's come back announced his planned retiermt. after taking a big hit the day the news came out the stock drifted higher. i want you to fast forward to january of last year. gap's new ceo eliminates the role of gap brand creative director creating a general
manager of customer experience. time viewed as positive. gap was able to continue generating numbers through last spring. things went south in may of 2015. less than a year ago. oh, man. did they go south fast though. first gap announced the april same store sales were down by an appalling 12% including 15% drops in gap and banana republic. these numbers were brutal. gap reported first quarter results on may 21 and delivered a big revenue miss. the ceo was disappointed on the conference call. when they say it like they did, you feel bad. gap stock got a reprieve last june when the company announced a slate of strategic initiatives including lay offs and store closings, however by july there we go with the nasty numbers including many more same store sales declines continuing
through august. suddenly gap got hit with analyst downgrades, on fear that is competition in the apparel space was growing and gap had little room to take share and it has grown, right? by the time we reach the 2015 back to school season, gap was pretty beaten down. and the things only got more difficult. virtually every power retail under the sun. to make it worse gap lost the head of the old navy division who went to ralph lauren for the ceo position. last fall you could make the case gap wasn't worse than a struggling retailer in a difficult environment that's mall-based. toward the end of november gap reported a brutal third quarter including a hideous slash of the four-year earnings forecast. then we learned the november same store sales were horrible. falling 8% signalling an ugly holiday season to. co. sure enough the holidays were pretty dismal for the gap.
when the company preannounced ugly fourth quarter result this is month, we also learned same store sales were down 8% in january. in short, gap is getting its head handed to it. where do we go from here? the company did allegedly to inspire confidence in its ability to declare -- stop the decline of same store sales. the core gap brand struggles. the future of old navy is looking murky. over the last six days gap has been propelled higher by the broader rally in the market which sent the stock up 20% in barely more than a week creating a precarious situation given that gap reports thursday. i doubt the quarter will be anything to write home about given the results we see from other retailers during the earnings season like disappointment from nordstrom and macy's. put it all together with gap feeling like a recipe for disaster or no upside since they told you things aren't good. granted the stock is trading
just 11 times next year's earnings. that's a positive. you would think you could make the case it's too cheap and the market started to revisit bad earningses and put a good face on them. the $2 bounce back from nordstrom is in my mind. you can't just look at the price to herbings multiple in a vacuum. it represents essentially no growth in the company. that assumes gap can make the numbers which proved to be a pretty big if. given the recent history of under delivering. bottom line. over the last year the gap has gone from a market darling to a stock that's practically uninvestable. some of this is not their fault. you know the hideous slow down in mall-based retail. it seems gap has been struggling to get its act together since the departure of the former ceo glen murphy at the end of 2013. until the company can demonstrate a turn around in the core brand and deliver earnings growth this stock will pop a
little bit but then continue to be toxic. there are so many better retailers out there. costco, tjx and stores more likely to thrive. there is no reason i can think of to own this stock. it's been unseasonably warm this winter. are the apparel companies feeling the chill? i'm focused on vf corp. and columbia sports and allergan is down but could the recent earnings give them a boost? and has oil hit the sweet spot? i will reveal. so why don't you stick with cramer?
i have said it before, i will say it again. execution matters. just look at the insanely dismal results from two similar-looking companies. columbia sportswear and vf corp. here we have two apparel companies, both with a big business selling winter weather clothing. columbia through the name sake brand and vf corp. through north face. columbia reported a knock out quarter and the stock is higher than we got the numbers while vf corp. reported a bow wow quarter last friday. stock sold off 4.4% in a single session.
today after the rebound vf made up losses. nevertheless, all of this begs the question. how do two companies with so much overlap produce such starkly different results. how can columbia be killing it when vf corp. is getting killed. let's start by going over what sets them -- what do they have in common? columbia whose ceo tim boyle came on a week and a half ago is a house of brands including mountain hardware, prana and climbing apparel, sorrell boots and columbia. they have a major focus on footwear and outer wear, especially winter clothes. vf corp. is a larger company with major expo sure to outdoor and action sports equipment and apparel which account for 60% of sales. vf corp. has too many brands to name them all. you may recognize timberland,
nautica and others. columbia just reported a blowout quarter, better than expected sales up 3%. monster 15% earn ing beat off a 75 cent basis. vf corp. had a truly disappointing quarter down 5% year over year, shrinking gross margins. some underwhelming guidance. how is this possible? you could argue vf corp. got killed by the warm weather we are having which is vf corp. did on the conference call. how come columbia isn't having the same problem? the truth is columbia totally brushed off the weather saying they did well, quote, despite unseasonably warm weather. macro economic challenges, currency head winds and specificallile in terms of footwear the ceo said as our business with sor rel gets closer to the consumer to the
women we are focusing on it becomes less a weather driven issue. in other words, the more they connect with the customer the less sales are driven by how hot or cold it is outside. look at this. feel it. it's pretty hot. you really can't feel it. boyle acknowledged that things could have been better if we had a cold winter but said columbia is doing well in the u.s. and europe regardless of the warm weather. it wasn't a big deal. it was completely believable and spectacular. now i want to contrast it with vf corp. the company could not stop blaming the warm weather as the reason for their under performance. during the conference call members of the management team cited the weather not one, not two, three, four, five, six, seven, eight -- nine times in the prepared remarks before the
analyst kwq & a sessions. the consumer softness accelerating was compounded by the warmest fourth quarter on record. quote, a direct result of warm weather, and on and on. you can say columbia is just doing a great job but regular companies got crushed by the weather. the thesis fell apart when we got to a terrific question from citigroup's kate mcshane who pointed out we have had warm winters in the past like in 2011 and north face nevertheless managed to post double digit growth back then. she wanted to know what's changed that makes north face so much more hostage to the elements. i didn't really find the company's answer to be that compelli compelling. i came back and said to myself, maybe north face has peaked.
although that isn't the reason why we have half a north face jersey. what else? we know running, training and athletic apparel is doing well. in particular columbia's yoga brand prana is on fire. up 39% year over year. imagine that. yoga is so hot i find it dangerous. the mountain gear, trail running shoes were flying off the shelves. vf corp. called out running and training an area of strength with the mountain athletics up 40%. here is the thing. columbia has a lot more exposure than vf corp. which explains why they are doing better. if i were running vf corp. given the success of columbia's prana acquisition i would go out this weekend and buy lulu lemon to get more yoga expo sure. the ceo said they planned to take a more active approach this year to acquisitions. i suggest vf corp. buy lulu.
they do a much better job than the current team. unfortunately for vf corp. jeans are also a big part of the business. this has been a lousy period for denim. le it's contributed nearly 20% year over year decline in the contemporary brands position. columbia doesn't have much exposure to denim. same for image wear, what vf wear calls durable clothing for workers, uniforms made with heavy canvas to hold up under pressure. this business was down 13%. citing the weakness in oil and gas. they're saying it's the oil and gas sector the reason for lack of demand here. disappearing oil jobs mean disappearing customers for them. columbia doesn't have the oil and gas exposure. some of vf corp. brands are doing terribly for no obvious reason. take nautica which was a power house brand. this quarter down 10% year over year. the problem, i think it is
because nautica is a mall brand and shopping mall traffic is in free fall. even outlets. columbia has less mall exposure and a better e-commerce business. my wife bought me a nice nautica top. where does this leave us? if you look at the four-year forecast for both companies, the truth is they are not that different. this is a side by side comparison but my stage manager couldn't get the zipper up which is pathetic. investors and analysts trust the management to deliver on the numbers more than they trust vf corp. in part that's because columbia is a much better perform er while vf corp. struggled and columbia has the better growth brands here now. including its red hot boots. this is up nearly 15% year over year. that smoking prana business. vf corp., many of the brands like north face, timberland and nautica are struggling. not much to get excited about
but the ceo could make one or two smart acquisitions to get vf corp. in the game. they are doing well in china prove ing the chinese communists are transitioning to a consumer-based economy. i would rather buy columbia though it trades at a premium to vfc. you got the pay out for best of breed. if you want china i suggest to buy yum which will split into yum and yumle china. bottom line. despite what you may think from the two quarters it is not that it was snowing on columbia's side of the street while the winter weather was warm for vf. columbia is doing a better job and they have more exciting brand coalitions than vfc which is getting hammered by more than just the warm weather. and it need s to correct the course now. for columbia sportswear, it's the better buy and only a purchase of lulu lemon by vf would change this guy's mind. grant in ohio, please. grant.
>> caller: hi, jim. thanks for taking my call. >> quite welcome. >> caller: i'm a banker who is 79 years old today. a student of the cramer school of investment. i would like your opinion on target. >> target is about to report. my charitable trust owns it. i am concerned. going back with the research director i said i don't know if target is set up for a good quarter. he said the valuation is so low we have to take the risk that it's okay. that has been difficult. i think it is an inexpensive stock. matt in new jersey. matt. >> caller: hey, jim. love the show. >> thank you, matt. >> caller: i want your opinion on go pro. i load eed heavy at the $10 mar. i'm curious what the rest of the year may look like in your opinion. >> i'm not a fan of go pro. fitbit had a great number and people hated it anyway. these are stocks --iester years, unicorns that became public
nobody cares for. they are like shorn unicorns. anyway, execution matters. the discrepancy between columbia sportswear and vf corp. is about execution. i think you should pay up to the best of breed now. more "mad money." allergan has been busy. trust me, it's a lot but the ceo just ahead. has oil hit the magic number? i'm eyeing the positive action in the market relating to the price of the commodity. and your calls rapid fire in the lightning round. oh remotes, you've had it tough.
watch discovery. record this. voila. remotes, come out from the cushions, you are back. the x1 voice remote is here. last time we checked in with allergan the company had just announced it was merging with pfizer in what i consider to be a smart deal. since then the stock has been slammed thanks to political grand standing against higher drug prices but they reported a better quarter. along with higherer than expected revenue driven by strong sales but other good things, too. sure it jumped but there is more room to run going into the merger with pfizer. let's check in with the ceo brent saunders to talk about the pfizer deal. welcome back to "mad money."
have a seat. >> thanks for having me . >> i will put it to you. this was by far the best quarter we have seen. you have. it was also the best quarter of a pharmaceutical company. biotech or drug in terms of the number of new approvals. strong leadership positions, what you are doing. the number of billion dollar fran chiesz. i think your stock would be up more if you were not merging with pfizer. i am trying to rationalize that. >> it was a great quarter. the team performed well. we are die vesting a business and doing a preintegration to pfizer. despite those distractions they delivered. >> i was worried about it. i thought i wouldn't be able to understand it. this was your cleanest quarter of all the her jers you have done. this one showed the central nervous system you dominate, women's health. there are areas i didn't know but urology, irritable bowel. there is so much going on here. is this the right time to merge?
>> this industry is going through massive change which requires massive consolidation. this combination with pfizer does create the world leader in biopharmaceuticals. for an allergan shareholder owning 44% of the combined int ti is in best position in my belief. >> you gave us an opening in the call and said the ceo of pfizer and you are both baffled by where the stock is. i'm baffled. you made it clear that going through with it -- it looks like the inversion. i thought you ducked questions and you didn't. you took them head on. i said the gap that maybe the 80-point gap, brent, will close. but people are still fearful. >> right. it is baffling to me. and it is baffling to ian. i spoke to him today. >> you did? what did he say? >> he's as baffled as i am. that wasn't the reason we were
talking. look, i think there is an anomaly in the market and i'm confident and probably you know better than i the market will correct overtime. it is a great opportunity for anybody in either of two companies to get it. >> the $40 billion you hope to get, maybe april, may. >> we are still optimistic for the end of the quarter. it could slip into second quarter. it could be april. if teva controls that show, they are doing a great job working hard. >> let's talk about the company as if it were not merge ing, not that -- obviously it is merging and i'm in favor of the merger. but pipeline milestones. aesthetics. >> we have a lot. kibela launching and botox for forehead line which is i may need. >> i don't think so. botox, many new indications, but no mention of what they are. >> we talked about forehead
lines. crow's feet outside the u.s. and we have depression. but the data for the depression study is end of the year, maybe first quarter next year. >> there have been many attempts to do depression and even the best out there have failed. how do you have confidence? it's been so hard. >> we have a long history in depression going back to lexapro. >> it was a break through. >> we understand depression. if there was a company to do a drug like botox and depression we have that expertise in the regulatory and clinical development organization. the studies have to play out, see where the data falls. we are optimistic. we'll see how the data reads out. >> gastroenterology. >> we just got a drug for ibsd. we have one for diabetic gastroparesis. new treatment category for
disease that hasn't had a treatment in 30 years. >> these were a break through which was terrific. we have to talk about election. when hillary clinton tweeted about drugs they still come back to you. obviously every company has had price increases. this is a breakthrough. witness the number of fda aprofessionals. 10%. i come back and say, is this a stock you think you have to keep watching whether bernie sanders does well so hillary clinton stays tough even though she received a huge amount of money for the drug companies? >> all the candidates, hillary clinton, donald trump, bernie sanders, whoever it is, it's rhetoric. we have to parse rhetoric from reality. going after an industry that comprises less than 10% of the total cost of health care, drug price increases are highly negotiated. drugs save the system money. we have a drug once a day antibiotic. once and done. used to be ten days in the
hospital. now you are talking about a couple thousand dollars. we do things that save the system money, improves lives and ultimately many drugs now cure people. going after the 10% that does so much good for society isle really just rhetoric. it's a great whipping post. that's the case because everybody in the industry comes to work trying to do good for people. >> when you look at the time frame, teva has to close but it seemed you laid out a pretty clear description of what the treasury might want with the rules and how if they haven't suggested this third course by now, you have got to be in good shape. >> we think we are. we constructed this deal in a highly legal way. consulting the world's best advisers on how to do it. we followed the law. right? >> right. >> the treasury issued two notices. we followed those. they are promull gating those. we believe this is america. once you follow the law you
should have certainty. for them to come in and try to change this in the ninth inning seems unfair. that said, this deal will go through. >> all right. terrific. it was a great quarter. i think the pfizer merger is terrific. this quarter alone would have propelled the stock substantially. brent saunders of allergan. it is the most transparent of the drug companies. everything we talked about is in the filings. "mad money" is back after the break. [bassist] two late nights in tucson.
blew an amp.but good nights. sure,music's why we do this,but it's still our business. we spend days booking gigs, then we've gotta put in the miles to get there. but it's not without its perks. like seeing our album sales go through the roof enough to finally start paying meg's little brother- i mean,our new tour manager-with real,actual money.
we run on quickbooks.that's how we own it. >> announcer: lightning round is sponsored by td ameritrade. it is time. it is time for the lightning round. you say the name of the stock. i don't know the calls or the name of the stock ahead of time. i tell you whether to buy or sell. when you hear this sound -- [ buzzer ] -- then the lightning round is over. are you ready, skee-daddy? time for the lightning round on cramer's "mad money." starting with danny in new york. danny. >> caller: first time long time. >> good to have you. >> caller: my kids watch the show every day and always ask me to call in. alexa has the same birthday as you. and we want to ask about el eli lily. >> the answer is if you follow my charitable trust which you
can do by taking the bull for action owners plus.com you know it is just a plain out buy. i think tgs very cheap. responsible company. conceivable that it may have good alzheimer'sle news later in the year. greg in maryland. greg. >> caller: hey, jim. this is greg from maryland. a big blue crab boo-yah. >> thank you! >> caller: i pulled the trigger to buy spectra energy today. >> it yields 5%. in the end it is going to be fossil fuel related and when oil goes back down it will be hammered even if it shouldn't. dan in illinois, dan. >> caller: hi, jim. enjoy the show. >> thank you very much. >> caller: we all know you are a fan of bristol-myers -- >> bristol-myers! >> caller: for a long term buy and hold would you give a nod to abbvie. >> it is being recommended and i
thought it was compelling. i was skeptical but it did seem cheap. we're going to ron in texas. ron. >> caller: hi, jim. thanks for taking my call. >> of course. >> caller: with boeing's announcement of fewer deliveries of the freight configured 747 and the forward guidance after the recent earnings call seeming to guide the fewer dreliveries f the dream liner -- >> boeing had an accounting issue. i like boeing. i saw mr. mcnerney. they changed the ceo already, the chairman. jim is gone. just this afternoon. i will tell you i cannot get behind boeing. they have the accounting irregularity. it's been a mistake when i have done it. as much as i like boeing i can't get behind it. i can get behind united technology and i want you to own honeywell. doug in north carolina, doug.
>> caller: boo-yah. hey, cramer. where are we with cmg? >> it went down to the low 400s and we said it's done. we think people won't be thinking about e. coli six months from now. you have to know stocks anticipate declines and they end. buy chipotle even up here. i'd love them to come on the show. dennis in indiana. dennis. >> caller: hawaey, jim. i was curious about pot. >> stay curious and stay away. we don't like the farmers income balance statements and they are coming down. i think they should take advantage of the strength and sell. one more. pete in arizona. pete. >> caller: hello, boo-yah. >> boo-yah. >> caller: long time listener. my stock is taser. >> it's too cheap. time to buy the stock here. it's a good one.
that, ladies and gentlemen, is the conclusion of the lightning round. >> announcer: the lightning round is sponsored by td ameritrade. sup jj, working hard? working 24/7 on mobile trader, rated #1 trading app on the app store. it lets you trade stocks, options, futures... even advanced orders. and it offers more charts than a lot of other competitors do on desktop. you work so late. i guess you don't see your family very much? i see them all the time. did you finish your derivatives pricing model, honey? td ameritrade.
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the slowing of the velocity of the decline in oil creates a positive backdrop for so many industries. at this level it allows for oil companies to stay in business while they ratchet back expenses. i know it's become a fool's e rrand to keep defending lower energy prices given the indebted companies that could fold if crude keeps going lower. we also have many banks on the look out for big loans. that could go bad if oil goes much below these levels. the combination of bankruptcies involving hundreds of millions and banks having to add to the loan loss reserves at the same time the fed keeps rates low is pretty much a nightmare scenario of the futures of the financials. i have to tell you, this is what i'm concerned about that could cause the market to roll back over -- the financials. they are not in good footing. right here though at 33, a little bit of a sweet spot. you have gasoline trading up
$1.77 nationally. coming down across the board. that's the tax cut. you have the company's recognizing that natural gas isn't going up so they can afford to build factories in this country rather than elsewhere. that's the employment gain. our natural gas is the cheapest in the world save guitar. yes. lower energy prices benefit the consumer as the consumer benefit is unknown to those who travel on wall street. t the average income is $52,000. tell me save ing won't matter to that person. that's what a family saves if gasoline stas at 1.77. combine it with heating bills. you get 1400 break. that's meaningful. even with rents going up. more important is the willingness of the individuals to move away from urban centers. if we get 1.2 millionle new homes built this year that's what the forecast is. the approximate real demand given household formation and the disproportionate increase in the price of rent.
the building will have to occur away from cities. the land stash that's ready for building isn't as close to the urban centerings and the suburban locations have been prohibited because of the higher price of gasoline. now that sub $2 gasoline has come and it's becoming the norm, we are beginning to hear from travel, lee sure and retail company that is the consumer does have a little bit more to spend. i think there was a lag as we have seen gasoline go down. kind of episodically. we were at these prices during the great recession. it went right back up. the lower longer thesis does make lower gasoline prices trustworthy. on top of that, you have the other side of the ledger, the energy producers. if oil plummets as it did in 1986 we'll see hits to energy companies. they are concentrated in roughly nine states but the economic activity won't make up for thes loss of jobs or bad jobs.
however, a slow measured decline or just leveling off oil will allow the stronger oil companies to cherry pick good properties from those desperate for cash while strapped companies cut costs and avoid bankruptcy. the best of all possible worlds might be oil in the low 30s or the price of gas under $2 while giving oil companies a chance to catch their breath and stay in business. there is only one flaw in this all positive logic. the oil companies hoping for higher prices won't get them soon. production remains way too high. there will be winners, a handful of companies that can buy properties with a return on investment. the scenario doesn't make the oil companies investable. it does make everyone else a little bit better off. one more point. if oil goes back from 33 to 25, it will take this whole market down with it. stick with cramer. pitch you investment opportunities.
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with the united mileageplus explorer card, you'll get a free checked bag, two united club passes, priority boarding, and 30,000 bonus miles. everything you need for an unforgettable vacation. the united mileageplus explorer card. imagine where it will take you. first things first, fitbit, good quarter, terrible guidance. stock's going down. the story has too many holes in it. i think the product is good. looks like the stock isn't working. got too cheap. that's what's going on with the united technologies and honeywell tie-up. all the industrials too cheap. i like to say there is always a bull market somewhere. i promise to find it for you on "mad money." i'm jim cramer. i will see you tomorrow.
(man) the sharks are back in an all-new season of "shark tank," where hopeful entrepreneurs from across the country dream of a chance to secure an investment and gain powerful partners to start, grow, or save their businesses. i want to make it so that people believe that america can make products that are great. if the sharks hear a great idea, they're ready to invest using their own money. how would i get my money back? i will write you a check. (laughter) and they'll fight each other for a piece of the action. you're hurting children. are you kidding me? we're not here to suck the blood out of companies. at what point do you ever get your money back? but first, the entrepreneurs must convince a shark to invest the full amount they're asking for, or they'll walk away with nothing. i don't wanna tell you how to do this business, i want to support you.