It may sound odd, but the group hurt the most by the U.S.-China trade war is the hedge funds, CNBC’s Jim Cramer said on Thursday.
“OK, I’m being a little facetious, but when you think about it, maybe I’m not. Hedge fund managers have lost billions of dollars shorting stocks ever since the trade war began in earnest,” the “Mad Money” host said.
As hedge fund managers tried to preemptively calculate the effects of the trade dispute, the negative coverage made them bet against various stocks that they thought would be seriously debilitated as a result of tariffs, Cramer explained.
“Yet these bets aren’t paying off: the trade war just isn’t producing the kinds of shortfalls that, in theory, should’ve kicked in this quarter,” he said, citing the better-than-expected performance of stocks like Cummins and Emerson Electric.
“Turns out it’s less of a problem than the doomsayers thought, which is why shorting’s been such a bust, with the short-sellers acting as a natural accelerant for the upside when they cover their stocks ever since the trade war with China first flared up six months ago,” Cramer said.
On Thursday, Cramer didn’t just see the beginnings of Viacom’s turnaround — he saw the turnaround itself.
“The turn itself … [has] been engineered by Bob Bakish, who was named CEO in December of 2016,” Cramer said after the media giant’s earnings report. “It’s a pretty incredible one.”
Since Bakish took the helm, Viacom, which owns film and television properties including MTV, Nickelodeon, Comedy Central, BET, VH1 and Paramount Pictures, has put through cost-cutting and boosted its intellectual property wares.
“You know what’s the most amazing thing about this turn? So few people know that it’s happening — most people aren’t even aware that Viacom even owns this stuff,” Cramer said.
Instead, Viacom has been plagued by endless coverage of its merger disputes with CBS, the complex family ties between the two and reports of sexual harassment allegations against CBS CEO Les Moonves.
“There’s been a continual narrative out there that says Viacom is going to buy CBS and CBS shareholders will be crushed because it will be succumbing to an inferior company,” Cramer said.
“After today, I wouldn’t be so sure CBS is the better business,” he concluded.
For more of Cramer’s take, click here.
With about 25,000 employees in the United States and another 23,000 in Canada, automotive supplier Magna International sits squarely in the center of an ongoing trade dispute.
In June, the Trump administration placed tariffs on steel and aluminum imports from Canada, Mexico and the European Union. Canada responded by placing tariff on $12.5 billion worth of U.S. food products.
A senior administration official told CNBC in August that the White House would not rule out placing tariffs on vehicles made in Canada, a lingering threat to car part manufacturer Magna.
Magna’s second-quarter earnings report didn’t shy away from the tariffs’ effects: while the manufacturer posted “record sales [and] record earnings,” according to CEO Don Walker, it lowered its full-year forecast for North America on account of the tariffs.
“If the tariffs stay the way they are – and who knows if anything more gets ratcheted up in China – it’s about a $60 million a year hit,” said Walker, who spoke to Cramer on Thursday.
To watch and read more about his interview, click here.
World Wrestling Entertainment’s stock has run more than 250 percent since Cramer first recommended it in March 2017, and while Cramer loves the story, he knows it’s worth checking in on the monster move.
“It was a $22 stock and now it’s a $79 stock,” the “Mad Money” host said on Thursday. “When you’ve got a triple, you need to take something off the table. That’s common sense. It’s portfolio management.”
But how much stock should WWE investors sell, and is it too late to buy for those who missed the move?
For those answers, Cramer looked at the professional wrestling giant’s long-term growth story.
Having recently won 31 new contracts to provide cybersecurity for various federal government agencies, Cyberark Software is taking its place as a leading source of protection for U.S. infrastructure, the company’s founder, Chairman and CEO Udi Mokady told Cramer.
“We’re very pleased, actually, with the federal government approach to cybersecurity, really moving from compliance-driven to risk-based and Cyberark is the one to choose when you’re really trying to create a pillar of security inside,” he said in a Thursday interview.
And, unfortunately, it’s becoming easier for nation-states like China, North Korea and Iran and individual, unaffiliated bad actors to consistently launch cyberattacks against U.S. systems, he said.
“It moves from a nation-state, where you have units sitting in an air-conditioned room and developing code, to cybercriminals, again, working on code, testing it against known solutions out there,” Mokady told Cramer. And now, “it’s easier for the attacker. You don’t have to be an expert anymore to run ransomware, you can just buy it.”
To watch Mokady’s interview, click here.
In Cramer’s lightning round, he shared his take on callers’ favorite stocks:
AbbVie, Inc.: “I like AbbVie. I know there’s a lot of bear stories running around. It’s the other component of Abbott. Abbott’s owned by the charitable trust. I think that it’s good. I know they had one big drug that a lot of people are worried about from the biosimilar situation. I’m not as worried. I think AbbVie’s a buy.”
Buckeye Partners, L.P.: “No. I mean, look, I’ve known Buckeye forever and you know I’ve soured on the pipeline group. Yeah, it’s getting a little bit better, but I’m going to say there’s just too much hit or miss in this group.”
Disclosure: Cramer’s charitable trust owns shares of Emerson Electric and Abbott Laboratories.
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