Cramer Remix: The retail reality could be good for consumers, but not stocks

  • CNBC's Jim Cramer explains how the cost of tariffs will squeeze retailers’ margins.
  • The "Mad Money" host also holds a sell-off strategy session to stem the panic.
  • In the lightning round, Cramer sanctions buying shares of CVS Health.

The stock market's decline might be furthered by the effects of President Donald Trump's tariffs on Chinese goods, CNBC's Jim Cramer said — but consumers could get a break.

"I do think that retailers will to have to eat some of the costs of the president's tariffs; they won't all be passed on to the consumer," the "Mad Money" host said. "But that's bullish for the consumer and a welcome antidote to inflation, even as it stinks for the retail stocks."

Most of all Cramer's just waiting for the Federal Reserve to get the message he's been shouting from the rooftops: "the economy can take care of itself."

"Look, I'm not some kind of laissez-faire zealot. Far from it," he told investors. "However, on some level, markets are self-regulating. This stuff is basic economics 101."

"Part of the strength of this economy is based on the strength of the stock market. It has a tremendous wealth effect, which allows people to spend more," Cramer explained. "You wipe out a big chunk of that wealth, you're going to see less spending and thus less inflation."

Click here for more of his take on the Fed.

Cramer's take on Trump and the Fed

President Donald Trump looks on as his nominee for the chairman of the Federal Reserve Jerome Powell takes to the podium during a press event in the Rose Garden at the White House, November 2, 2017 in Washington, DC.
Getty Images
President Donald Trump looks on as his nominee for the chairman of the Federal Reserve Jerome Powell takes to the podium during a press event in the Rose Garden at the White House, November 2, 2017 in Washington, DC.

As the stock market continued its volatile losing streak on Thursday, with the market's "fear gauge" hitting its highest level since February, Cramer wanted to clear up some of the confusion around why stocks were falling.

After all, with numerous indicators and the Federal Reserve indicating that the economy is strong, investors are probably wondering why the market would take such a drastic hit.

"Right now, there's a ton of tension between the macro and the micro. The Federal Reserve cares about the macro — they're looking at unemployment, wage growth, anything that tells them about the totality of the economy," Cramer said.

"Based on that, our new Fed chief, Jerome Powell, has concluded that business is so strong that, without a problem, it can handle a series of lockstep rate hikes well into 2019," he continued. "But the micro ... makes me think that the economy's already peaked."

On Thursday, President Donald Trump doubled down on his rebukes of the Fed's strategy, blaming the central bank for causing the market correction. On Wednesday, he called the Fed "crazy" for continuing to raise interest rates.

While Cramer didn't exactly support the president making those remarks, he did agree with him.

Click here for more.

Tech stock sell-off: Time to start picking?

Jeff Bezos
Shannon Stapleton | Reuters
Jeff Bezos

The "serious pain" seen across the stock market, especially in the technology sector, might be "horrifying," but it shouldn't discourage investors from starting to look for opportunities among the tech plays, Cramer said Thursday.

The tech-heavy Nasdaq Composite fell 1.25 percent in Thursday's trading, briefly entering correction territory intraday. Wednesday marked the worst day of trading for tech stocks in seven years, with the Nasdaq plunging over 4 percent.

"Many of these stocks were up dramatically for the year, and when you get this kind of pullback, it typically does more damage to the winners," Cramer explained.

"People are justifiably nervous about giving back their gains, too — and they have some outsized ones, particularly the big growth managers — and when they see this kind of sell-off, they sell hand over fist so they don't lose their year[ly gains]," he said.

But investors who are interested in bottom-fishing have to keep an even keel if they want to preserve their portfolios, the "Mad Money" host said.

Here's what he would buy.

Cramer's sell-off strategy: Consumer staples vs. tech

Traders work on the floor of the New York Stock Exchange (NYSE) on October 4, 2018 in New York City.
Spencer Platt | Getty Images News | Getty Images
Traders work on the floor of the New York Stock Exchange (NYSE) on October 4, 2018 in New York City.

Some investors are flocking to the stock market's traditional safe havens amid the sell-off, but Cramer recommended a different approach for investors looking to take advantage of the declines.

In response to a caller's query about whether or not to buy shares of consumer staples stocks like Procter & Gamble and PepsiCo — often seen as "safe" because of their bond-competitive dividend yields and steady growth — Cramer suggested what might seem like a counterintuitive strategy.

"I thought about the same thing," he admitted in a sell-off strategy session with investors.

But instead, Cramer suggested getting into some of the downtrodden technology names, which have seen drastic declines in the last several days and led the first leg of the sell-off.

Click here for his strategy.

IFF CEO talks Frutarom acquisition

Andreas Fibig, CEO of IFF.
Adam Jeffery | CNBC
Andreas Fibig, CEO of IFF.

International Flavors & Fragrances' $7.1 billion acquisition of Israeli flavors and ingredients company Frutarom will pay off in droves for the newly combined company, IFF Chairman and CEO Andreas Fibig told CNBC on Thursday.

"What is fantastic is that right now, we have the largest and broadest customer base in our industry and we have more than 30,000 customers. No one else has it," he told Cramer in an interview.

"We are starting to take their natural solutions, like natural colors or like their antioxidants, to sell them into our customer base, and taking our technology, which we have shown to some of their managers already, to sell into their customer base," he said of the integration. "We actually believe that's the greatest value driver for us going forward."

Even better, Frutarom gave IFF a good deal of local business, which Fibig said was an under-the-radar growth driver related to changing tastes region by region.

"You have seen, probably, in the last couple of quarters [that] in particular, the local and regional customers had a very good performance for us," he told Cramer.

For more on how IFF is approaching the merger and handling rising raw material costs, click here to watch Fibig's full interview.

Lightning round: Prescribing your portfolio CVS

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

CVS Health Corp.: "I was surprised. The CFO left. I'm just going to say it right here: I think you should buy CVS. I think you should buy CVS. Walgreens was fine."

Arconic Inc.: "Oh, the predecessor to Alcoa. OK, here's the problem: it's at $21. If they don't get a buyer, the stock goes to $17. If they do get a buyer, they go to $23. So it's $3 up, $3 down. For me, that means don't buy."

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