Cramer's Morning Take: Housing, Rates, and Meta – 4/12/23

Jim Cramer (0:02)

I'm Jim Cramer, and you're about to hear a sample taken directly from today's CNBC Investing Club morning meeting.

What you have to have is homes being built, you have to have supply come to the market, which it hasn't mostly because a lot of people have very low mortgage rates, they don't want to jeopardize those, and you have to have more apartments built. Now, I thought that there was going to be a plethora of apartments being built that has not materialized. Subsequently, what we have is a very sticky number that I'm sure that the hardliners on the Fed are going to say, hey, we got to keep taking rates higher.

Jeff Marks (0:32)

Well, that's the question. What is the Fed to do? Because there is this putative rate hike that occurred from the regional banking crisis and all the tightening of financial conditions and the slowdown in lending that occurred as a result.

So perhaps, now the market is saying maybe we get 25 basis points at the next meeting in May, but I know Sunday you wrote, well, I'm not too sure if the Fed can continue to raise hikes.

Jim Cramer (0:59)

And my friend, Georgini, said very similar, we read each other's stuff.

Look, I'm concerned that the Fed doesn't realize that when they raise rates, it tends to lower the long rates, which then tends to lower the mortgage rates. So it's a very counterintuitive process. It's not working.

Jeff Marks (1:17)

I think the point I'm trying to make here is that perhaps the Fed needs to maybe raise one more time, but then hold versus this market perception of cuts later this year.

Jim Cramer (1:28)

Right. Now, what I would do if I were them is I wouldn't say hold. This is my new, I'm trying to formulate what I would do if I were them. I would raise it a quarter point, okay?

And then I wouldn't say anything. I just wouldn't say it.

Jeff Marks (1:40)

Just let the data determine where we go.

Jim Cramer (1:41)

Just let the data be the data. I mean, like, you don't need to be an NFL coach and say, okay, listen, we're going to win the game, and then I'm not going to focus on the next three games. They could be trap games. You don't say that. You just play the game.

Let's talk Meta for a second. One of the reasons why Meta keeps going up is there's a belief that they've been using artificial intelligence to be getting around, but signaling to an advertiser around the iOS system, which has been blocking them, signaling that perhaps they can give you that return on investment that they had pre iOS blocking them. That is very important.

Jeff Marks (2:16)

Right, so there's two ways Meta's business has improving because of AI. On one hand, a better algorithm, they can recommend content that people will like, that's good for engagement, but it's also this circumventing of the Apple privacy headwinds and ad targeting.

Using AI, they no longer have to rely so much on outside apps, they can basically better mine the data that they currently have to better target apps.

Jim Cramer (2:44)

Now the reason on the stock, I think it's a terrific stock here, terrific.

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