With Jim Cramer on the hunt for stocks that will benefit the most from President-elect Donald Trump's agenda, he decided to focus on payroll players.
Automatic Data Processing (ADP) and Paychex are the two largest payroll processors in the U.S., and Cramer thinks they could be huge winners from Trump's focus on domestic job growth.
"These are ultimate Trump stocks … And that is really just the tip of the iceberg. ADP and Paychex have so much going on for them here that I think they could be terrific core holdings for years to come," the "Mad Money" host said.
ADP and Paychex are part of a rare group of companies, like banks, that benefit from the Federal Reserve raising interest rates. Given that the Fed plans for at least three more rate hikes next year, these companies could become a lot more profitable.
Both companies collect interest on what is known as the float, meaning, the cash that it sits on between when their clients pay them and when they cut an employee's paycheck. A day or two worth of interest could add up, considering that these companies write checks for millions of workers.
Cramer could only explain the stock market's drive to roar higher as investors tapping in to their "animal spirits."
"In the big picture … the excitement stemming from Trump's pro-growth agenda and his business-friendly cabinet picks are producing are getting us to act, to buy stocks when we would otherwise be too circumspect to do so," Cramer said.
The idea of animal spirits was coined by John Maynard Keynes, who Cramer described as "history's greatest economists" and investor. In Keynes' 1936 book "The General Theory of Employment, Interest and Money," he defined animal spirits as "a spontaneous urge to action rather than inaction, and not as the outcome of a weighted average of quantitative benefits."
The truth is animal spirits have been oozing from stocks ever since Trump won the election. Investors have been in a euphoria driven by Trump's agenda of lower corporate taxes, a holiday from taxing the repatriation of overseas assets and deregulation.
And when Cramer heard the news that Kraft Heinz could recombine with Mondelez and tobacco company Philip Morris International could get back together with Altria, he saw dollar signs.
"I have no idea if either of these recombination deals is going to happen, but I do know this: these two potential blockbuster transactions would create still one more wave of M&A, simply because the combinations make so much sense," Cramer said.
As the market approaches the end of the year, Cramer broke down stocks into the naughty list, and those that could keep playing nice into 2017.
"Not every red-hot stock will continue roaring higher, and I think it is important to use every tool at your disposal to figure out which winners will be able to sustain their momentum and which ones might be in jeopardy," the "Mad Money" host said.
To gain further insight on the charts, Cramer spoke with Tim Collins, a technician and colleague at RealMoney.com to compare the high flying stocks of Broadcom Limited and Teck Resources.
If everything goes well, Collins anticipated that Broadcom could rally above $200 by February. If the stock fails to break out, he thinks it could resume trading in the old range with a floor of support around $167.
Analog Devices is the designer of chips used in various end markets that include cars, aerospace and defense, consumer products and the internet of things.
Analog also announced it would buy Linear Technology for $14.8 billion over the summer, and even as it hasn't closed on the transaction, the company still managed to blow out earnings on a top and bottom line when it reported a month ago.
Cramer spoke with Analog's CFO David Zinsner, who outlined the changes that could trickle into the industry when Trump takes office.
"I think that everything he talks about when it relates to the U.S. economy and trying to stimulate the U.S. economy is going to be good, and we … a lot into the industrial infrastructure space. If that stimulates then certainly that's going to be positive for us." Zinsner said. "As to the other initiatives he's got going, I don't know, I think we have to wait and see how that goes."
In the Lightning Round, Cramer gave his take on a few stocks from callers:
Johnson Controls: "I like that one for here with the whole Trump program. Trump stock, I would be a buyer."
Biogen: "This is really interesting. Biogen last night announced the CEO, which meant therefor it was not for sale. The stock went down $10, then we got to know the CEO. We like the stock, it's up $6. My take is don't buy."