Cramer's Morning Take: Fed Preview 5/1/24

Jim Cramer (0:01)

Hey, it's Cramer, and this is my morning take on the market from today's CNBC Investing Club Morning Meeting.

The market's on tenor hooks, why? Because there's a press conference today after the Federal Reserve decides what it's going to do, and there's going to be a question of the Fed chief, which basically is going to say, when did you stop beating your wife? Meaning, do you favor higher rates or lower rates given the data that you're seeing? And Jeff, the problem is, is that there's a lot of the data that's been hot, but we know there's rot underneath, and he should certainly be able to correct the impression that everything's strong.

Jeff Marks (0:35)

Yeah, I mean, look, look at some consumer companies that have reported in the last week or so, seeing some weakness there, had a really weak consumer confidence number yesterday. So I think that all adds into the picture, but look, Powell speak at 230, decision at two, not expecting any real news there, but his commentary will be closely watched.

Jim Cramer (0:58)

I mean, look, we're bottoms up people. I mean, I look at Nucor, I look at JB Hunt, I look at CSX, I look at Norfolk Southern. I mean, they're the companies that are the blood, you know, the blood pressure of the economy, and they're not strong. And so I think if the Fed goes bottom up and not aggregate, they would say, listen, we see a lot of companies that were doing well previously. Also, there's this trade down factor that is so indicative of what's going on, which is where you see McDonald's burgers are too high.

The idea that a burger got too high is something that the Fed has to recognize.

And if they tightened, of course, it would be a major decline for the stock market.

As it is, the 10-year backed up immediately when he said what he said, and March 8th turned out to be the peak. So I think he's done a lot of damage already.

Jeff Marks (1:47)

Well, let's get into earnings and start with Amazon, because that's also an interesting barometer of the economy. This was actually a really strong quarter. You had sales up 13%, operating income above $15 billion, margin above 10%. That's a lot of company-wide cost discipline. AWS accelerating, revenue growth 17%. You had margins at 37%.

Jim Cramer (2:08)

It was going down. It almost hit 9%.

And the fight among people like me and the great CFO is that, wait a second, is it ever going to return to double digits again? Well, think about how quickly it did.

Jeff Marks (2:22)

And think about how much dollars they're adding to that massive business. But to your point, the cost optimization headwinds that plagued them over the last couple of years, they're talking about moving behind that. And GENAI, it's a multi-billion dollar revenue run rate, so a nice kick up there.

Jim Cramer (2:41)

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SPEAKER_3 (2:52)

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