As brick-and-mortar stores fall out of style, Jim Cramer is getting worried about real estate investment trusts, or REITs, that run malls and shopping centers for the retail sector.
The "Mad Money" host said those REITs have two serious problems, the first being that bricks-and-mortar retailers are not doing well due to the growing popularity of e-commerce.
"As more and more retailers shut down underperforming locations, something that's become a common refrain when these companies report, the retail oriented REITs are going to see their occupancy rates plummet, and they'll have to lower the rent to entice in new tenants," Cramer said.
The other problem hitting retail REITs is the Federal Reserve's plans to continue hiking interest rates, and higher rates make the high-yielding investment trusts less attractive to investors.
"Of course, e-commerce has been crushing mall and shopping-center-based stores for ages. The thing is, that weakness is finally starting to hit their landlords, the retail REITs, which had been unscathed for years, and hitting them in a meaningful way," Cramer said.
And retail only faces more potential obstacles from Washington tied to the GOP's proposed border tax on imports, according to PVH CEO Manny Chirico, who spoke with Cramer on Wednesday.
"From an industry point of view, from a retail point of view, it is a terrible idea. It is basically a $500 billion hitting tax on the consumer," Chirico told the "Mad Money" host.
And while Chirico said PVH's internationally successful brands like Calvin Klein and Tommy Hilfiger are "in a terrific place" to manage a border tax, others will not be so lucky, the CEO said.
"I couldn't be more passionate about how I think this is bad for the consumer [and] the American tax base. I think this is just ill-founded," Chirico said.
Meanwhile, Cramer has been insistent on the importance of separating the bull rally from President Trump's influence in Washington, but the market can't seem to undo its Trump ties.
The market is Trump-obsessed, prioritizing any White House weakness over great guidance from FedEx and Starbucks and strong earnings reports from tech companies, such as Adobe, Salesforce, and Accenture, Cramer said.
"I think if you want to make money, you do the opposite of what this market says to do," Cramer advised. "I suggest you buy the stocks of companies that are doing well, like a Starbucks, betting that Trump's daily vicissitudes are not that important to creating long-term wealth."
In a Wednesday interview with Cramer, outgoing Starbucks CEO Howard Schultz said that he and his successor Kevin Johnson will continue to push the coffee chain's "social impact agenda" regardless of gridlock in Washington.
"We must do more for our people that we serve, the communities, and we have a bigger responsibility," Schultz said. "We can't wait for Washington."
Speaking in light of Starbucks' announcement that it plans to create 240,000 jobs by 2021, Schultz added that Washington's logjam could mean more opportunities for his brand.
"I could not be more optimistic, more excited, and more bullish about the opportunities that we have at a time in America where there is great uncertainty politically, where there's a seismic change in consumer behavior," he told Cramer.
But as the euro creeps towards stability and economies across the pond strengthen, Jim Cramer thinks that right now, Europe could provide better investments than the United States.
With Washington in gridlock over health care and FBI hearings destabilizing the capital, Cramer said Europe's once-concerning politics "are looking downright placid" in comparison, making it an attractive buy for investors.
"All I am saying is that with a euro that's seemingly found its footing, economies that are growing stronger, and an underrated level of political stability, Europe might be a better place to invest than the U.S, at least for now," Cramer said.
In Cramer's lightning round, he gave his take on two of his callers' stock picks.
Time Warner: "Yeah, I do [think they'll merge with AT&T], but ka-ching, ka-ching, let's find the next one with big upside. We're not arbitrageurs here on the show."
Hershey: "I like Hershey very much, I absolutely think it is — well, it should've been taken over. It would've been a steal. I think the stock goes higher."
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