Chinese trade negotiators suddenly canceled a visit to meet U.S. farmers after they wrapped up trade talks in Washington this week.Marketsread more
The Pentagon will deploy U.S. forces to the Middle East on the heels of the attack on Saudi Arabian oil facilities, United States Secretary of Defense Mark Esper announced...Defenseread more
President Trump also said he is "not looking for a partial deal" with Beijing, moving away from his suggestion last week that he would consider an "interim deal."Politicsread more
Progress on trade talks will determine how far market will move above new highs.Trader Talk with Bob Pisaniread more
"Sure, the trade war's taking its toll on business ... it's just not taking its toll where it was supposed to," Jim Cramer says.Mad Money with Jim Cramerread more
Joe Biden called on President Donald Trump Friday to release the transcript of a call with a foreign leader that is the subject of a whistleblower complaint. Biden described...Politicsread more
For investors taking a breather from the chaos in August, buckle up as the market is about go crazy again, Goldman Sachs warned.Marketsread more
Palantir Technologies is targeting a valuation of at least $26 billion in a private fundraising round, the first for the Peter Thiel-backed data analytics startup in four...Wall Streetread more
Michael Pack, a conservative filmmaker linked to Steve Bannon, saw at least $1.6 million in donations from his nonprofit sent into the coffers of his independent production...Politicsread more
The New England Patriots released Antonio Brown just 11 days after signing the wide receiver. The NFL Super Bowl champion team initially had kept him in the face of a rape...Sportsread more
A tour bus carrying Chinese-speaking tourists crashed near a national park in southern Utah, killing at least four people and critically injuring up to 15 others, authorities...U.S. Newsread more
Jim Cramer has finally reached the point where he can clearly see that the main force behind the market's bear phase is not just earnings. Investors are worried about credit, specifically pertaining to high-yield bonds.
"If your company needs debt in order to grow, then your stock is being punished, and there is not much that can be done except to watch the carnage, wait it out, or just take a loss," the "Mad Money" host said.
Cramer cited the case of XPO Logistics, the trucking company that visited "Mad Money" on Friday. CEO Bradley Jacobs confirmed that while the company is doing well, the stock is hurting.
The reason? It's because XPO is a roll-up company. That means it is a vehicle used by the CEO to buy other companies to grow or dominate an industry. XPO recently announced the purchase of Con-way, a giant trucking company, for $2.72 billion. This deal was right on the back of another large acquisition by XPO; it purchased European logistics company Norbert Dentressangle earlier in the year.
And while XPO has the borrowing capacity to make both acquisitions without much stress, the market has punished the stock brutally; it's down 47 percent for the year.
Cramer marveled that a deal that would have been applauded by investors a year ago is now hated, simply because times have changed. So, the stock was pulverized.
However, Cramer can see the other side of the risk coin when he looked at Olin, which is buying Dow Chemical's commodity chemical business. It had to borrow at a rate of 9.75 percent last Friday in order to obtain the money to finance the deal. This interest rate was insanely high, in Cramer's opinion. In fact, it is unrealistic for most companies to pay without risking default. So, in this case, the decline in serial acquirer stocks does make sense to Cramer.
"I think if a company's future growth is going to rely on acquisitions and those acquisitions need debt, you have to accept that the window for cheap debt for these kinds of roll-ups is closing," Cramer said. (Tweet this)
Read more from Mad Money with Jim Cramer
Ultimately, Cramer thinks that if XPO can manage to cut costs and get the most out of its two most recent acquisitions, then the stock will rebound like crazy.
For now, XPO is stock in the vortex of the most hated group on Wall Street. Investors want as little risk as possible, and unfortunately these debit-financed deals are being viewed as toxic.
One day they will not be viewed as toxic, but that day is not here yet.