Cramer Remix: The trade war with China has shifted to tech

  • "Mad Money" host Jim Cramer explains that a lack of talk about a trade war does not mean the trade dispute is over.
  • Cramer also hears from the CEOs of Nucor and United Rentals to see how the industrials are faring.
  • In Cramer's lightning round, he suggest investors swap out of the stock of Sprint.

The Trump administration's trade dispute with China may have quieted down, but CNBC's Jim Cramer argued on Thursday that it is far from over.

"We've opened up a new front in the trade war, and while it's quieter than all of the bombast about tariffs that had people freaking out, there are still a ton of companies that can get hurt here," the "Mad Money" host said. "The new front in the trade war? Technology."

The U.S. Commerce Department's Monday ban on selling U.S. products to Chinese smartphone maker ZTE was "just the tip of the iceberg," Cramer said. Early on Thursday, China hit back, citing antitrust concerns in Qualcomm's proposed acquisition of NXP Semiconductors.

But in addition to negative merger reviews, telecom tensions, and restrictions on exports, China had one key strategy that Cramer was particularly concerned about.

Not enough winners?

U.S. President Donald Trump and China's President Xi Jinping leave a business leaders event at the Great Hall of the People in Beijing on November 9, 2017.
Nicolas Asfouri | AFP | Getty Images
U.S. President Donald Trump and China's President Xi Jinping leave a business leaders event at the Great Hall of the People in Beijing on November 9, 2017.

As stocks sank on Thursday, Cramer inspected the market for the various triggers that sparked the decline.

"Thanks to a nasty combination of the yield on the 10-year Treasury approaching 3 percent, a series of disappointments in the consumer products space, some amazingly fast growth in personal and corporate spending, a rally in commodities and a pickup in the trade war with China, we got hit with a flash flood of selling in a number of key groups," Cramer said.

Of all the woes, Cramer was particularly worried about the breadth of the United States' trade dispute with China.

This week, the tit-for-tat battle spread to a group that Cramer saw as integral to the success of the stock market: the semiconductor sector.

"The semis are a leadership group, no doubt about it, so the tone was just plain jarring," the "Mad Money" host said. "The problem is, in a trade war with China, there simply aren't enough publicly-traded winners."

The race to $1 trillion

Microsoft CEO Satya Nadella (C) listens to Amazon CEO Jeff Bezos during an American Technology Council roundtable at the White House in Washington, DC.
Nicholas Kamm | AFP | Getty Images
Microsoft CEO Satya Nadella (C) listens to Amazon CEO Jeff Bezos during an American Technology Council roundtable at the White House in Washington, DC.

The race to a $1 trillion market cap is underway, and to Cramer, it's looking "very close."

Leading the pack is iPhone maker Apple, with a market cap of $877 billion. In second place is Google parent Alphabet at $757 billion, followed by Amazon at $754 billion and Microsoft at $740 billion.

Tipping his hat to Morgan Stanley analyst Keith Weiss, who came up with the concept of the race to $1 trillion in a recent research note on Microsoft, Cramer decided to look at all four contenders and speculate on which one might cross the "finish line" first.

Nucor CEO talks tariffs after earnings

John Ferriola, CEO of Nucor.
Adam Jeffery | CNBC
John Ferriola, CEO of Nucor.

Cramer also heard from John Ferriola, the chairman and CEO of steel producer Nucor who was a leader in pushing the Trump administration to implement steel and aluminum tariffs.

"It'd be extremely disappointing" if Trump didn't follow through on the tariffs, Ferriola told Cramer on Thursday. "We need the president to fulfill his commitment. We must not let the date of May 1 slip any further. Frankly, his credibility and the credibility of America is on the line here."

But even if the administration failed to uphold its commitment, Ferriola wasn't worried about Nucor's business, pointing to the company's year-over-year results on the heels of its first-quarter earnings report.

"Can Nucor do well despite what happens with 232?" he asked rhetorically. "The answer is absolutely, yes. All you need to do is to look back at our performance last year, but particularly in the first quarter, when we were operating in an environment in which imports still took 25 percent of the market."

"We operated at 92 percent capacity utilization," the CEO continued. "We had a very solid quarter. Just about all of our cylinders of our great company are running, full steam."

United Rentals CEO on tech investment benefits

After touting the benefits of investing in technology, Cramer sat down with United Rentals CEO Mike Kneeland, whose construction equipment rental company is doing just that to stay ahead of the curve.

"We started out with telematics. We had to put telematics on our total fleet," Kneeland told Cramer on Thursday, referring to a type of telecommunication technology that provides location information in various applications.

"It does a lot of different things," Kneeland said. "It eliminates any kind of waste trying to locate a piece of equipment. It identifies whether it's low on fuel, whether it needs service. So it helps us, but it also helps our customers, more importantly."

Investing in tech was one of many factors that boosted business at United Rentals, Kneeland said after the company's first-quarter earnings beat.

"If you look at all the leading indicators, all of them, they're either at record-highs or damn close to it," he told Cramer. "Everything I see is going to point to a solid year. And you don't have to listen to me. Listen to my competitors. They're saying the same thing."

Lightning round: If you like S, you might love TMUS

In Cramer's lightning round, he zoomed through his take on callers' favorite stocks:

Sprint Corp.: "I would swap out into T-Mobile. I think [T-Mobile CEO John] Legere's going to have a better quarter."

Alaska Air Group: "You know, it used to be the best, then they made that acquisition and we haven't really gone back to it. The acquisition was just not great and I can't recommend the stock here."

Disclosure: Cramer's charitable trust owns shares of Apple, Alphabet, Amazon, Microsoft and Nucor.

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