Jim Cramer saw many portfolio managers scrambling to figure out where the consumer dollar is going these days, and it led them in a startling direction.
The biggest buzz on Wall Street on Wednesday was the shocking decline in business and stock of Macy's. While many investors did not expect Macy's to do well, the sharp sell-off in the stock took Cramer's breath away.
And while there are plenty of positive signs in the economy such as lower unemployment rates and higher disposable income, Cramer says the sell-off in Macy's could have a large impact for the entire stock market.
Why does it matter?
Two-thirds of the economy is based on consumer spending. That means two-thirds of dollars are going somewhere, and if investors can figure out where the money is flowing than they can discover excellent investment opportunities.
The changes indicated in Macy's sales could allow investors to make bets on where the profits will be better than expected in the future.
"As I teach, every day, if you can find out where the profits are going to be above expectations, you can figure out what stocks might be best to own," the "Mad Money" host said.
Wayfair came public a little over a year ago and has become one of the most contentious and viciously hated stocks out there. In fact, short interest now represents some three-quarters of the shares that trade on the open market.
But Cramer is not one to just go with the flow and took a closer look at it to see if it could be time for Wayfair's punishment to end.
Wayfair is the online purveyor of furniture and home goods with various brands such as Joss & Main, All Modern, Birch Lane and Dwell Studio. Over the summer it was hit with a vicious report from Citron Research, which prompted the stock to plunge to $33 from $53 in just one month.
Yet, when Cramer looked at the numbers, Wayfair continues to beat the estimates even with the big decline over the summer. The stock has rebounded in the past few months and is up more than 100 percent year-to-date.
And while both the bulls and the bears have a strong case on Wayfair, Cramer spoke with its CEO Niraj Shah to get the inside perspective on where the company could be headed.
"The growth is because customers love what we are doing and keep coming back," Shah said.
Another group that the market absolutely despises is the former high-flying stocks of companies that report suboptimal numbers. Zebra Technologies is the maker of specialty printers, including thermal label and receipt printers, along with associated software, supplies and radio frequency identification solutions.
It also acquired Motorola's old enterprise business for $3.5 billion a little over a year ago. This was supposed to be a game changing acquisition because it made Zebra a leading player in mobile computing, barcode and mobile printing, data capture and cloud based device management.
However after roaring on fire over the summer, its stock plummeted after Zebra reported a disappointing quarter in August. It reported again on Tuesday, and delivered a strong beat but with lower guidance than what analysts were looking for.
To find out what could be in store for Zebra's future, Cramer spoke with CEO Anders Gustafsson.
"I think we still feel very good about the overall transaction [Motorola acquisition] … Only reservation is in retrospect to the complexity of the IT integration. But apart from that revenue is running very strong, the customers are liking the story, we are winning in the marketplace and our profitability is good," Gustafsson said.
When thinking about the Chinese consumer, Cramer wants investors to figure out what exactly it is that we want China to consume.
Do we want China to buy commodities or retail goods? This is important, because the answer could change what country is the winner of the global trade war.
If people are hoping that China will start to buy lots of metals and natural resources, then they are in big trouble. Chinese industrial production is now about 6 percent, and there are tons of companies that cannot survive unless that number goes back to the high single digits.
"Then the 11 percent growth in Chinese retail sales that we got last night, along with the record breaking Singles Day…what we are having today is the Chinese equivalent of nirvana," the "Mad Money" host said.
In the Lightning Round, Cramer gave his take on a few caller-favorite stocks:
Berkshire Hathaway: "What we are going to do is we are not going to think short-term about Berkshire Hathaway. Warren Buffett has got a great mosaic of business' and we like the stock. Is it going to go up tomorrow? No. That's not our point when we invest with Warren Buffett. Let's think years. Not quarters, not months."
Spirit Airlines: "That was a tough one. Remember that last time when Ben Baldanza [CEO] was on, the stock was down 50 straight points. And yet here I am still telling you to be in Delta. And if not Delta, then SouthWest Air. They have better growth prospects."