Mad Money

Cramer tracks the impact of millennials across the stock market

Key Points
  • "Mad Money" host Jim Cramer says market-moving events like Disney's earnings announcement are happening at the behest of the millennial generation.
  • Millennials' fingerprints are strewn across major market sectors like media, make-up and even autos, Cramer says.
  • As some companies try to steer millennials toward their brands, others wither at the hands of the younger, more frugal cohort.
The impact of millennials across the market

There is no doubt in Jim Cramer's mind that companies across the market are targeting millennials, trying to steer the younger generation to become loyal to their products.

"It's amazing how powerful the millennials are. They're impossible to get away from," the "Mad Money" host said. "Honestly, if it weren't for the fact that I have two millennial daughters, I would hate this generation, the generation that demands to be catered to or else they just cut you off at the knees — or at the cord, if you're a cable operator."

Some companies, like Clorox, are taking advantage of the generation's digital savvy, advertising on the internet to draw younger spenders to their products.

But millennials are generally frugal, which makes selling them things difficult save for a few key products: services like Uber and Airbnb, and items like cosmetics and Apple's iPhone.

"You need to understand ... the facts about millennials because they're changing the companies have to do business," Cramer said. "Consider the tectonic shift we are seeing right now at The Walt Disney Company."

On Tuesday, Disney delivered its third-quarter earnings report, which showed weakness in its cable business. At the same time, the entertainment giant announced it would pull its films from Netflix starting in 2019 and launch its own direct-to-consumer streaming service.

"Is this smart? Is this dumb? No, no. Wrong questions. I think it was unavoidable and inevitable," the "Mad Money" host said.

Disney CEO Bob Iger knew he needed to offer cord-cutters a secondary option to cable, and by offering millennials the option of streaming Disney movies and ESPN sports online, he could return his company to growth, Cramer said.

But Disney's move is just one of the many examples of how millennials drive industries. Shares of cosmetics company Estee Lauder have been on fire thanks to, in Cramer's words, the "selfie generation."

Spice maker McCormick saw its stock jump from $90 to $95 in a 5.5-million-share stock offering after its purchase of the French's mustard and Frank's RedHot sauce brands, because of millennials' love for low-calorie, flavorful condiments, Cramer said.

Millennial habits can also explain the rally in shares of Nvidia, a top maker of semiconductors for gaming, and Amazon, the easy-order e-commerce colossus that is allegedly killing the mall.

"Now, it gets a little rockier when you think about what the millennials dislike," Cramer said. Their love for Uber and, now, Lyft, particularly in California, is so intense that they aren't buying cars like they used to. I think they're starting to impact car sales."

Yet while they suppress the outlook for autos and, due to their environmentally friendly outlook, oil and gas, millennials are lifting prospects for companies like the tech-equipped Domino's and even the now-challenged Netflix.

"Look for the fingerprints of the millennials," Cramer advised. "They're behind the moves in so many loved and spurned consumer stocks and it's only getting worse, not better. You disagree? Just ask Bob Iger, who's twisting his company into knots in order to get the younger generation's attention."

Watch the full segment: Cramer spots millennial fingerprints

Cramer tracks the impact of millennials across the stock market

Disclosure: Cramer's charitable trust owns shares in Apple.

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