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Cramer Remix: A border tax could lead to thousands of layoffs in retail

As the market heads into the Federal Reserve meeting on Wednesday, Jim Cramer saw major obstacles for stocks to clear this week.

"I see contradictions everywhere, and I see historic moves that are based on false preconceptions, or an atmosphere that is too bullish for my tastes," the "Mad Money" host said.

Cramer expects retailers to make the case that a border tax could force them to lay off thousands of people. The loss of retail jobs could overwhelm whatever jobs are created by manufacturing. Marginal retailers won't be able to keep the pace with Amazon or Wal-Mart if they have to pay more for their goods.

"They will most likely not make it. That is a real risk, not a canard," Cramer said.

Regardless if the tax is phased in or not, Cramer is already seeing signs in retail stock that signal tremendous losses and massive layoffs if Congress passes a border tax.

An employee arranges a sneaker display at a Foot Locker Inc. store inside the South Park Mall in Strongsville, Ohio.
Luke Sharrett | Bloomberg | Getty Images
An employee arranges a sneaker display at a Foot Locker Inc. store inside the South Park Mall in Strongsville, Ohio.

J. Jill is a recent IPO in retail that stood out to Cramer from the rest of the sector, which has been largely under pressure from changing shopping trends. J. Jill is a clothing brand targeting 40- to 65-year old women that uses data to drive its sales and has affluent, loyal customers.

However it is growing fast—an "outlier" compared to other retailers, Cramer said.

But the challenging retail environment could dampen the success of the stock, which by most recent number trades at 24 times earnings, a huge premium to competitors like Gap.

"I think J. Jill could have tremendous potential, but given the horrific backdrop, I think it might be too soon to give the stock my blessing," Cramer said. "But you wouldn't be crazy for wanting to speculate on it."

Cramer pointed to two brands that have overcome the struggle thanks to strong management and focused long-term strategies.

"Children's Place and Foot Locker have both been able to triumph at a time when most retailers are struggling to stay afloat, and I think these two stocks could have even more room to run," he said.

Janet Yellen
Carlos Barria | Reuters
Janet Yellen

Cramer also turned his attention to the future of technology, stating that autonomous driving could be the biggest opportunity in the tech space.

"Anyone who can get a piece of this market is going to do incredibly well, and anyone who can dominate it is going to coin money," Cramer said.

Intel took a step into dominating the space with its $15 billion purchase of Mobileye on Monday, an Israeli manufacturer and leading player in advanced driver assistance systems.

However, the market didn't respond positively to the deal, sending Intel's stock down more than 2 percent. Cramer stated that indicated a short-term perspective of the stock, as the acquisition could break Intel out of the view that it is a maker of PCs, and prompt Wall Street to pay more for the stock.

US Concrete's stock is up more than 40 percent since the election, but CEO Bill Sandbrook says this has nothing to do with President Trump's victory in the White House.

"Things are good right now, and this has nothing to do with the Trump infrastructure bill," Sandbrook said.

Instead, Sandbrook attributed the strength of infrastructure to the underlying building economy. He confirmed strength in all four of US Concrete's major markets in San Francisco, Dallas, Washington D.C., and the Northern New Jersey and metro New York areas.

In the lightning round, Cramer gave his take on a few stocks from callers:

Exxon Mobil: "I think you should wait until it gets to a 4 percent yield. It's at 3.68. We'll get Wednesday, we'll get high inventory numbers. Maybe Exxon breaks $80 and then you can pull the trigger. I want you to get in at the right price. It does matter."

Sonic Drive-In: "I like Sonic too. And, you know, when we have [CEO] Cliff Hudson on, I think, 'terrific.' But here's the problem. Right now, going out, dining, restaurant[s], all bad. So we've got to be very, very careful. Can't push that one very aggressively, even though at $23 it's very cheap."