Cramer's Morning Take: Home Depot 1/10/25

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Jim Cramer (1:01)

Hey, it's Cramer, and this is my morning take on the market from today's CNBC Investing Club Morning Meeting. We had a really hot number this morning in jobs. Now I want to dispute the idea that this is a disaster because I had been worried about a recession more than I had been worried about the idea that we have a hot economy, although I don't like to see wages go up 10 cents. That's a little bit less than I thought, but it is moving interest rates, and when we move interest rates, we have a decline in the market. Sure.

Jeff Marks (1:28)

I mean, it's stocks fighting the bond market right now. You had the 10-year spike above 4.75%.

The 30-year touched 5 But you bring up the jobs number. More jobs added than expected. But yeah, wage growth, 3.9%. I think the estimates were around 4 Kind of stabilizing around that figure. So perhaps and actually a good sign there. But when bonds are up this much, it's going to freak people out.

Jim Cramer (1:53)

Right. And what we have is what I call it. It's a reset. We had a lot of people who felt that they would buy stocks when the Fed cuts rates. They didn't want to fight the Fed. They thought they had the Fed on their side. You can't have the Fed on your side anymore because the Fed was not data dependent enough. And they also didn't factor in that it would be a peaceful resolution to the election. We got that. Now we do have a terrible tragedy. And I don't want to necessarily say here. Here's a way to make money on a tragedy. But our decision to buy Home Depot is deeply involved with what I've seen happen in gigantic, horrible natural disasters over and over. And I want people to understand our buy of Home Depot is very in sync with Target being up, Costco being up, Walmart being up. This is initially regarded as a rate play, but will be regarded as the ultimate rebuild play.

Jeff Marks (2:45)

Sure, I mean, Gordon Haskett, they're estimating the fire could lift Home Depot comp sales by 30 to 40 basis points in fiscal year 2025 If you look back to the hurricanes, Milton and Helene last year, that also gave a 55 basis points lift to the third quarter, estimates a $200 million benefit. And by the way, there was a note by Truist today. They pointed out that their car data shows Q4 running ahead of their estimates. So obviously this is the stock that's fighting the bond market today, so linked with mortgage rates, but perhaps a specific opportunity to raise numbers.

Jim Cramer (3:23)

You know, and there's a tremendous number of stores in that area, and you can imagine contractors are desperate for what they need and Home Depot is able very quickly to shift from one area of the country to another and be able to get everything that is needed. It's a very bullish event for Home Depot and the stock should be bought. Start your day with my outlook on the market every morning. Visit cnbc.com/morningtake to become a CNBC Investing Club member at a special rate today.

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