Cramer's Morning Take: CPI Preview 8/9/23

SPEAKER_1 (0:00)

What do you see on the horizon? Uncertainty or opportunity? Whatever you see, at PGM, we can help you rise to the challenges of today, when active investing and disciplined risk management are needed most. Drawing on deep expertise across the world's public and private markets in pursuit of long-term returns.

Our investments shape tomorrow, today. Pursue your tomorrow with PGM, a leading global asset manager.

Jim Cramer (0:33)

Jim Cramer here to share with you a sample of my take on the market from today's CNBC Investing Club morning meeting.

And I was telling Carl this morning, there's not much happening right now. There's not a lot of earnings other than take to interactive, a company like Doximity, Zip Recruiter, and these are all secondary companies, and that's why we have basically nothing going on.

SPEAKER_3 (0:56)

But how much does the macro then? I know we have a big CPI reading tomorrow, we've got numbers from China overnight.

Their CPI was down year over year, the first time since 2020

Jim Cramer (1:07)

Their CPI is dangerous. I mean, most people don't understand that a deflationary spiral is as difficult to break as an inflationary spiral. People seem to think, oh, well, it's deflation, isn't that great? They can't break it because no one, in a deflationary spiral, no one invests, because you know that the moment you invest is worth less than what you put in.

So they are, unless the government sponsors it, there's no way you can build anything. Hence why you have these giant defaults. I mean, we're talking about this country garden. They didn't pay their bond on, they didn't pay their coupon on Monday.

And if you go back, I mean, people often think that the Nazis, I hate to mention them, but the Nazis came to power during inflation. They came to power during deflation because there was no growth in the country. So be aware that deflation is something that the Chinese government has not been able to break.

SPEAKER_3 (2:01)

So we mentioned US CPI tomorrow. If you go back to the last CPI in July, where it was cooler than expected, 3% year over year, you've actually had energy as the top outperformer since then. And if you look at what's happening today, it's energy outperforming today. You have oil hitting the high of the year, net gas surging. We did buy some Cotara yesterday.

Jim Cramer (2:20)

I had Enbridge on the other day and I had OneOaks partner, Magell & Midstream, they are oil, not net gas. They are all thinking this is the breakout.

Now the breakout here, remember, Cotara has dollar costs. They'll be selling it at 2.9. Think about how much money Cotara's going to be made. We got a chance to buy that Cotara at a ridiculous price because people thought the quarter was bad. You and I both knew that the quarter was good because they got more net gas with less money, which is what people want. They want gross margins to do it.

SPEAKER_3 (2:51)

They raised their production forecast, maintained CapEx, but they did see a path towards some easing costs next year of about 5%, which will help their cash flow.

Jim Cramer (3:01)

Now, it's Cabot oil gas. Cabot, by the way, is very interesting. It's Northeast Pennsylvania.

Is their cheapest net gas? Very interesting. And they're also, I mean, they are, look, I mean, I always loved Cimerex, which was a company that had great permeants. So they put the other permeant in net gas and they shift wherever they think is going to be the best place. And they shift it toward net gas, which is proving to be right.

Join the CNBC Investing Club with Jim Cramer to catch my member exclusive morning minis every day at 10, 20 a.m. Visit cnbc.com/morningtake to become a member today. That's one word, morning take.

SPEAKER_4 (3:46)

All opinions expressed by Jim Cramer on this podcast and in connection with the CNBC Investing Club are solely Cramer's opinions and do not reflect the opinions of CNBC, NBC Universal, or their parent company or affiliates and may have been previously disseminated by Cramer on television, radio, internet, or another medium. No specific outcome or profit is guaranteed in connection with your reliance upon or other use of the content from Cramer. The opinions offered in connection with this podcast and the CNBC Investing Club are not an attempt to induce any particular trading behavior, investment, or strategy. You should be aware of the risk of loss in following any strategy or investment discussed in the content from Cramer. To view the full CNBC Investing Club disclaimer, please visit cnbc.com forward slash investing club disclaimer.

Capella University is rethinking higher education. With their game changing FlexPath format, you can earn your degree on your schedule. So you can fit education seamlessly into your life.