After CNBC’s Jim Cramer broke the news that Larry Kudlow was the top candidate to replace Gary Cohn as the president’s top economic advisor, he wanted to double back and explain why.
The “Mad Money” host, who worked with Kudlow for years, said on Monday that the TV personality has a certain way about making his point that is “non-confrontational, yet stern.”
That demeanor could be Kudlow’s ticket back to the White House, where he worked during the Reagan days, Cramer said.
“In an administration that’s starved of history and institutional knowledge, he’ll bring tons of it,” Cramer said. “On the tariff issue specifically, our allies are going to get a friendly voice in the West Wing while our rivals will be chided, hopefully, into doing the right thing — somewhat different from the president’s recent meat-axe approach to these kinds of things.”
And while President Donald Trump does have a habit of changing his mind, the “Mad Money” host emphasized why a National Economic Council chief Kudlow would be good for the country.
“If he disagrees with the president, he’ll state his case and then he will back down,” Cramer said. “That’s why I think he’s a good choice: he’ll be a very credible expert to argue with the president, which I believe is what Trump wants and is why I bet that Larry Kudlow gets the job.”
With the major averages slipping from their highs on lingering trade-war concerns, Cramer wanted to go against the grain and take a look at what’s winning.
“One word: tech. Tech is what’s working,” Cramer said on Monday from CNBC’s 1Market in San Francisco. “The truth is, tech has been on fire for a long time — this is now the seventh straight week of gains for this group.”
Tech’s first tailwind on Monday came in the form of an analyst upgrade. Nomura Instinet released a report that raised its price target on shares of Micron to $100 from $55.
Shares of Micron, an Idaho-based chipmaker specializing in DRAM — dynamic random-access memory — and flash memory chips, ran up nearly 9 percent on the news.
“I’ve been telling you that something like this was on the horizon,” Cramer said. “Micron’s the backbone of everything from the personal computer, which has gotten a second wind, to the data center, which is the strongest part of the entire food chain.”
Since Cramer is in San Francisco this week, he wanted to go over a new stock group in technology space that’s just refusing to quit.
“I’m calling them ‘the cloud kings,’ the seven software companies that are transforming the way their customers do business,” the “Mad Money” host said. “I’ve been telling you about the cloud revolution for years now, … but the truth is it’s still in its early stages, which is why I still like the seven kings of the cloud: Adobe, Salesforce.com, ServiceNow, Red Hat, VMware, Splunk and Workday.”
In addition to their cutting-edge tech, these companies’ stocks have been wildly strong performers, Cramer said. Shares of all seven have rebounded between 17 and 30 percent since the market’s Feb. 9 lows.
So, to convince investors why macro-economic or geopolitical worries shouldn’t weigh on this part of the cloud, Cramer went over each cloud king’s track record and explained what made it a worthy buy.
Sticking to tradition in retail — specifically, choosing what to sell without having the data to back up the decision — could be what’s killing struggling chains.
That’s at least if you ask Doug Merritt, the president and CEO of software analytics play Splunk, who told CNBC on Monday that picking items to sell without consulting customer data could land retailers in jeopardy.
“If you’re doing it that way, it’s going to be harder and harder to be successful,” Merritt told Cramer. “That is not the way that Amazon’s doing it. That’s not the way that Mercadolibre’s doing it. That’s not the way Alibaba’s doing it.”
“Worlds are being disrupted because people are taking a data-driven approach right now to understanding product velocity [and] customer needs,” Merritt said.
Workday co-founder and CEO Aneel Bhusri told Cramer on Monday that getting Netflix as a customer was a win for his cloud-based software company.
“They could’ve picked anybody,” Bhusri said. “They were working with legacy systems in the past, but they were actually an early adopter of our financial systems.”
Bolstering its financial systems was Workday’s focus for much of 2017. In addition to its flagship human capital management software, which helps streamline human resources departments, the company has been asking clients to embrace its financial products as well.
But Netflix wasn’t just a high-profile customer, Bhusri told Cramer.
“Reed Hastings, their CEO, would send me emails at all hours of the night with things I could fix in the product,” the CEO said. “He’s very good with products, as you know, and they worked with us over time to really build a terrific global platform. It’s just a great partnership. And we will now … integrate into their customer systems, so the customer systems and their billing systems will integrate into Workday for them to have a seamless business end-to-end experience.”
In Cramer’s lightning round, he zipped through his take on some callers’ favorite stocks:
McDonald’s: “Forget the calls. I like [CEO] Steve Easterbrook. I would just go buy the common [stock]. I’m not going to recommend calls on this show.”
Kindred Healthcare: “The only one I’m recommending that’s somewhat in that sector would be Ventas. [CEO] Deb Cafaro, I think she is money good. It’s a 6.27 [percent] yield. I really think that that’s the right level. I know people don’t like the group, but that’s the one I like.”
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