CNBC's Jim Cramer tells investors that the market was due for a pullback and that the latest manufacturing report will have less of an impact on Wall Street that most think. The "Mad Money" host explains his stance on investing money in Chinese companies and why it should be harder for their firms to go public on the U.S. market. He sits down with New York energy provider Consolidated Edison CEO John McAvoy, who explains why utility stocks perform better as interest rates drop.
CNBC's on Tuesday said the stock market got hit because "we were due for a pullback."
The dropped more than 343 points, or 1.28%, the fell 1.23%, and the decreased 1.13% during the session. The major indexes are up about 14%, 17% and 19%, respectively, year to date.
The "Mad Money" host attempted to ease investors' recession worries, which helped sink stocks after a disappointing report on U.S. manufacturing production showed a decline in September. While the case is compelling, he urged investors that it's the wrong way to view the market.
"The single biggest prop behind the recession thesis is the president's trade policy, but maybe not the way you think," Cramer said. "Trump's tariffs on Chinese exports have done real damage to the Chinese economy, the second largest in the world. As China falters, it is taking the rest of its trading partners with it, especially Europe."
Cramer said he's actually disappointed White House trade advisor called reports claiming that the Trump administration was considering restricting Chinese companies' access American dollars "."
"I've gotta tell you, that's actually too bad," the host said. "We should make it harder for Chinese companies to raise money here in the United States, and I'm not even talking about this in the context of the trade war. This is purely about protecting investors from garbage merchandise."
-Written by Kevin Stankiewicz
"If you're looking for something that might be worth buying in this difficult market ... you could do a lot worse than the best run fast food chains," the host said. "The charts, as interpreted by Bob Lang, suggest that Jack in the Box and Chipotle have more room to run, and McDonald's is worth snapping up into weakness."
Demand for utility stocks tends to go up as long-term interest rates go down because they are "inversely correlated" to interest rates, the CEO of New York energy provider Consolidated Edison told CNBC.
John McAvoy said in an interview with Cramer that some investors view the sector as a "bond alternative" but warned that the sentiment can be cyclical.
"That's a knife that cuts both ways," the chief explained in the sitdown. "We benefit as a sector as interest rates go down. We get hurt on the other end as interest rates come up."
Cramer circled back to opine on how investors should manage investing in McDonald's, whose shares fell 2.7% during the session.
The former hedge fund manager flagged a note from a J.P. Morgan analyst, who warned that the Golden Arches' third-quarter results could come in "softer than we thought."
"So, if you want to buy a restaurant right now, if you want to buy a stock, I'd go over McDonald's with Chipotle," the host said. "But if you're a long-term holder of McDonald's, I'm telling you to ride out the weakness because even if something's wrong, I'm confident [CEO] Steve Easterbrook will fix it. Yes, he's that good, and that — not the chart — is what matters."
In Cramer's lightning round, the "Mad Money" host runs through his thoughts about callers' favorite stock picks of the day.
iRobot: "No, no, no. Miss, miss, miss, miss, plus tariffs."
: "I think it saves the system. ... The stock is a little out of favor right now, but that's O.K. I think it's good."
Disclosure: Cramer's charitable trust owns shares of J.P. Morgan, Disney and Comcast, which is the parent company of NBCUniversal and CNBC.