Cramer Remix: Tesla news sends bond prices higher

  • CNBC's Jim Cramer breaks down how Elon Musk’s tweet on taking Tesla private impacted the bond market.
  • The "Mad Money" host also sits down with the CEO of Logitech International.
  • In the lightning round, Cramer curbs his enthusiasm about two very different stocks.

Tesla CEO Elon Musk's tweet about potentially making the automaker a private company affected the bond market in an interesting way, CNBC's Jim Cramer said Tuesday.

"Do you know that the bonds actually went up on this news, which indicates that there are real buyers, there are people who want to buy Tesla up here, the stock?" the "Mad Money" host said in response to a caller's question.

Cramer recalled what he said when Tesla reported its latest quarterly earnings: that the ball was back in the bulls' court when it came to the stock of Tesla because the company outperformed investors' expectations.

"Do you need to sell it? I don't even know," he said. "Look, if you own it to this point, just go to its logical conclusion and see what happens because, like I said, just like when I go to see David Blaine, man, magic's exciting."

Stocks in demand?

Traders pass in front of an American flag displayed outside of the New York Stock Exchange in New York.
Michael Nagle | Bloomberg | Getty Images
Traders pass in front of an American flag displayed outside of the New York Stock Exchange in New York.

As employment ticks up and people find more money in their pockets, U.S. investors are becoming more frugal and choosing risk-averse index funds over individual stock-picking, Cramer said Tuesday.

"The game has changed since I first started picking stocks almost 40 years ago," he said as stocks rose, bringing the S&P 500 within 1 percent of a record high.

"We didn't even have index funds back then," he said. "Now they're the preferred way to invest for the majority of people who want to own stocks."

The flight to index funds stems from more savings-conscious consumers who, even though they are likelier to find jobs and make more money, are now focusing on keeping their earnings close rather than spending freely, Cramer said.

At the same time, corporate share buybacks are quickly becoming another source of fuel for stocks, he said.

So, with frugal investors buying up index funds, thus sending stocks higher, and companies gearing up for more stock buybacks, the effect on the market is tangible, the "Mad Money" host said.

"The impact of these two trends? Simple: they've created a stock shortage ... of epic proportions," he said. "There just aren't enough shares of big-cap companies to go around until sellers materialize."

Read Cramer's explanation for the trend here.

Logitech CEO on esports and the Olympics

Bracken Darrell, CEO, Logitech International
Scott Mlyn | CNBC
Bracken Darrell, CEO, Logitech International

It's "inevitable" that competitive video gaming, also known as esports, will someday be part of the Olympics, Logitech International President and CEO Bracken Darrell told CNBC on Tuesday.

Darrell, whose company makes computer and mobile phone accessories and has begun to sponsor top esports teams, told Cramer that Logitech met with the International Olympic Committee two weeks ago.

Held in Lausanne, Switzerland, where Logitech is headquartered, the meeting revolved around "how and when" esports should come to the Olympics, Darrell said.

"I think it's inevitable. I think it will be part of the Olympics," Darrell said on Tuesday.

To watch and read more about his interview, click here.

Off the charts: Rally of the retailers?

A worker sets up a display in a Walmart Super Center in Compton, California.
Mike Blake | Reuters
A worker sets up a display in a Walmart Super Center in Compton, California.

Much of the stock market seems to agree that in the e-commerce industry, there can only be one winner, and that that winner will undoubtedly be Amazon.

But for Cramer, the truth "is a little more complicated," he said Tuesday. "In reality, online shopping is still a rapidly growing category with room for more than one player."

Big-box chains like Walmart and Target have realized that, he said. Both companies have upped their spending on e-commerce and leveraged their brick-and-mortar locations in the process, leading to the rise of "buy online, pick up in store," fondly known in the industry as BOPUS.

So, to see whether these "old-school retailers" can really start taking digital market share, Cramer enlisted the help of technician Tim Collins, his colleague at RealMoney.com.

Get Collins' analysis — and a bonus take from legendary technician Larry Williams — here.

Hospital stocks: Healthy again?

Headquarters of Hospital Corporation of America, one of the nation's largest hospital operators, in Nashville, Tenn.
Getty Images
Headquarters of Hospital Corporation of America, one of the nation's largest hospital operators, in Nashville, Tenn.

Not long ago, hospital stocks like HCA Healthcare Inc. fell out of favor with investors amid the Trump administration's push to dismantle Obamacare and news of the health-care venture between Amazon, Berkshire Hathaway and J.P. Morgan's chieftains.

But lately, most of the group has been rallying, with the exception of Tenet, which slid nearly 16 percent after its Tuesday earnings report. But for Cramer, Tenet's issue was company-specific, and the rest of the group was worth inspecting.

"Clearly, the hospital space is sexier than most of us thought," he said, pointing to HCA as the best stock in the group.

He attributed HCA's outperformance to a few factors: "you've got an improving economy that makes patients feel more comfortable about going to the hospital when they get hurt, and at the same time, HCA's got a terrific geographic footprint in many fast-growing cities, as I mentioned, especially down South, where the economy … is just booming."

And even after its run, HCA's stock still looked cheap to Cramer, trading at 13 times next year's earnings estimates despite its strong balance sheet.

His conclusion on the space? "Judging by the way Tenet imploded today, you need to stay selective, which is why I want you to stick with best-of-breed HCA Healthcare," Cramer said. "If you want exposure to the health care sector, this one is a must-own."

Apple's Achilles heel

Finally, Cramer revisited the warning China's state media issued about Apple's position as a potential "bargaining chip" in the U.S.-China trade war.

Earlier on Tuesday, Cramer said he wasn't convinced that China would boycott Apple. But on "Mad Money," he changed his tune.

"I'd argue it's the Achilles heel for Apple, hence today's $1.96 decline on a really up day," he said. "Look, I'm glad President Trump is standing up to China to put a stop to their unfair trade practices. But as someone who believes that Apple's been a model Chinese citizen, it's a real shame that this great company's become a bargaining chip in the trade war."

Lightning round: At a loss for catalysts?

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

Canopy Growth Corp.: "Here's the problem: [the] stock ran up because of the Canadian vote [to legalize recreational marijuana], and then the Canadian vote happens and then there's no more catalyst. Now it's a siege until we see what kind of beverages they're going to be offering, what kind of different candies, what kind of food, chewing gum, and when we get that, then that stock will be moving again."

GTT Communications, Inc.: "I know that it[s latest earnings report] was considered to be a miss. You know I think that that's a very inexpensive stock that is doing quite well. I think it might be an opportunity, but I've got to see it calm down. It is just too- I mean, it's kind of like in free-fall right now. Let's wait a bit [and] maybe have them back on the show."

Disclosure: Cramer's charitable trust owns shares of Amazon and Apple.

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