- Optimism from two big retailers shows that American consumers are not tightening their belts due to trade tariffs, says CNBC's Jim Cramer.
- "Walmart and Target represent America," says the "Mad Money" host. "It makes me feel bullish about the consumer."
- For the CEOs of Target and Walmart, "tariffs are really not that much of a factor," Cramer says, even as President Trump threatens new China levies.
Optimism from the CEOs of two of the nation's biggest retailers, Target and Walmart, show that American consumers are not tightening their belts due to trade tariffs, CNBC's Jim Cramer said Wednesday.
The views expressed by Target CEO Brian Cornell and Walmart CEO Doug McMillon, in CNBC interviews this week, "made me feel terrific," Cramer said. "Walmart and Target represent America and it makes me feel bullish about the consumer."
"Let's just put to rest any notion that the tariffs are really hurting spending, that there is any real inflation, that the consumer is being hurt," Cramer told "Squawk on the Street."
Earlier Wednesday, Target's Cornell told CNBC's Becky Quick in New York that he sees a "healthy consumer environment," with low unemployment and rising wages, which portends a "very solid holiday season." Target shares were soaring about 12% to all-time highs after the retailer reported, before-the-bell Wednesday, fiscal third-quarter earnings and sales that crushed estimates. Target also raised its profit outlook for the full year.
Walmart's McMillon said Tuesday, in interview from CNBC's Evolve Summit in Los Angeles, "We're excited about the holidays. We think it will be a good one." He added, "The customer overall is in pretty good shape." Walmart last week reported better-than-expected fiscal third-quarter earnings despite a slight revenue miss. The company also raised its full-year profit outlook.
Both Walmart and Target are investing heavily in digital. Walmart is testing in-home delivery for its strong grocery business, in addition to allowing users to order online and pick up at stores. Target said same-day delivery options including buy online, pick up in store and curbside pickup accounted for 80% of digital sales growth. Target shares were up about 67% this year, as of Tuesday's close. Shares of Walmart are up 28% in 2019.
"Remember there is Amazon out there. And these guys have managed to be able to compete with Amazon," Cramer said. "We are really misjudging the consumer. The consumer is going to where there is convenience and value."
"When you listen to Brian Cornell talk, or Doug McMillon, the tariffs are really not that much of a factor," Cramer said, even as President Donald Trump on Tuesday threatened to go ahead with the planned mid-December new tariffs against Chinese imports if Washington and Beijing are unable to cement the "phase one" trade deal that was announced in principle last month.