Stocks closed lower on Wall Street on Monday, and to Jim Cramer this was a perfect example as to why he has been against the Federal Reserve raising interest rates. During his long career on Wall Street, Cramer has seen the first stages of a rate hike and knows it is not good for stocks.
"Stocks in a ton of industries go down, even as a few go higher, which is exactly what we saw today," the "Mad Money" host explained.
And while Cramer is against the rate hike, he does accept its inevitability. Low rates cannot last forever, even if they are good for the stock market for the duration.
What stocks will be the biggest losers of the rate hike? One loser stock out there right now is Party City, which Cramer said the only party it would have would be the one to celebrate clearing out all of the inventory that it has to clean out.
Cramer also wants investors to beware of stocks that yield 3 percent. Those are considered bond-market equivalent. If there is another set of strong employment numbers in January, then there will be another rate hike.
Lastly, there is one group that many investors do not think about, and it's the most important. Many stocks will not be impacted by higher interest rates or will do nothing. Those companies will get heat from activists or be forced to merge to gain heft.
"I know what happens when the first set of rate hikes begin, and it's not good for the vast majority of stocks … All I want is for you to know that we've been through this cycle many times before, and you'd better get used to it," Cramer said. (Tweet This)
To Cramer it seems as if consumers have finally awoken from a retail dream and finally figured out that warm weather is bad news for retail stocks.
Not only is a warm winter in the U.S. going to hurt the bottom line in retail, but higher minimum wages will ultimately cause pain for the earnings of this group as well.
This was quite evident when Cramer went to his local Costco over the weekend. As soon as he walked in, he was greeted with a pile of nice fall jackets. He watched as patrons continued to walk right past the giant display of warm weather goods. After all, why would they be worried about buying winter jackets while wearing a T-shirt and jeans?
"Sure, there is going to be a winter, but not until you see the whites of winter's eyes do you feel like shelling out big bucks for it," Cramer said.
Whenever there is a nasty marketwide pullback like the one on Monday, Cramer likes to circle back to companies that ride powerful secular trends to see if they could be worth buying into weakness.
Blackhawk Network Holdings is the leading global distributor of prepaid cards and gift cards and runs incentive and loyalty programs for more than 2,000 business partners. So, while the retail space is soft right now, the gift card industry has grown leaps and bounds.
The company recently partnered with Stockpile to create gift cards that allow users to buy publicly traded stocks, including large household name companies and ETFs.
Can Blackhawk continue to climb on the strength of the growth in gift cards? To find out, Cramer spoke with Blackhawk's chairman and CEO, William Tauscher. The CEO explained that his research indicated that 30 to 40 percent of people surveyed do not feel comfortable trading on the stock market, and Stockpile could change that perspective.
"There is a big self-use component here. We think a whole bunch of people are going to get comfortable with stocks because of what we are providing," Tauscher said.
As Wall Street becomes gripped by the drama of Valeant — the drug company that has been under assault from both short sellers and Washington's war on drug prices — Cramer would like to finally acknowledge that not every drug company roll-up is like Valeant.
Horizon Pharma is a $3.5 billion roll-up company. Roll-ups gain most of their growth through making a series of acquisitions. And while the company only has a market cap of $3.5 billion, significantly smaller than Valeant, its stock has been trading like a miniature version of Valeant.
Cramer spoke with Horizon Pharma CEO Timothy Walbert, who explained that the pharmacies Horizon works with all have one key goal — the doctor writes a prescription for its medicine because it has a clinical benefit, and the pharmacy ensures that the patient gets it. Horizon has cut out the middle men who receive a financial incentive.
"Our role is to ensure that the patient gets what the doctor intended," Walbert said. (Tweet This)
Another high quality growth stock that Cramer circled back to was Cyberark, the Israeli cybersecurity company with a stock that is down 41 percent from its highs in June. After many high-flying growth stocks were slammed during the summer, the stock was hit again last week when another cybersecurity company, FireEye, said that the overall level of hacking and cybersecurity spending is on the decline.
Cyberark has built a unique niche for itself by helping companies protect privileged accounts and administrator accounts. Those accounts have become red-hot targets for hackers because they basically control the keys to IT kingdom.
The company blew away earnings when it reported last week, delivering a huge bottom line beat and a solid top line beat. Management also raised its guidance for the next quarter and full year. Yet the stock was down 5 percent on Monday, and Cramer suspects this could be because it is a member of HACK, the cybersecurity ETF.
To learn more, Cramer spoke with Cyberark's CEO Udi Mokady. The CEO explained that the commentary from FireEye did not impact the company, because it does not rely on hacking or security breach spending.
"It was a record quarter for us. We did not see any change in the spend because Cyberark is all about proactive security. You don't have to be breached to come to Cyberark. We are proactive, you get it ahead of time," Mokady said.
In the Lightning Round, Cramer gave his take on a few caller favorite stocks:
American Airlines: "My order here is that I like Delta, and then I like Southwest Air and then I like American."
Teekay Offshore Partners: "The only shipping company, and I know it's not bulk, that I'm recommending is NAT which is hanging in there. Nordic American Tanker, I like that yield."