On Tuesday, Jim Cramer, host of Mad Money, spoke about the declining consumer confidence, which has been attributed to various factors, including tariffs, job losses, and other concerns.
“Big thing, this morning, the Conference Board’s consumer confidence index may be blanched. The expectations index based on consumer’s short-term outlook dropped 9.6 points to 65.2. That’s the lowest level in 12 years. You know it’s worse than Covid times?”
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He explained that the index is now well below the critical 80 threshold, which typically signals a recession. It marks the fourth consecutive month of declining consumer confidence, a trend Cramer finds very concerning. While acknowledging the severity of the situation, Cramer also pointed out a silver lining: the Federal Reserve can see these numbers and might take action if necessary. However, he also noted that the Fed’s future moves have become less predictable.
“When I see these numbers though, I think maybe the Fed can’t afford to wait until they see how much inflation the tariffs cost. We simply don’t want a recession here if it’s avoidable, but let’s address the consumer confidence issue head-on.”
Cramer went on to highlight several reasons why consumer confidence is eroding. He explained that many people in the U.S. are concerned about the White House’s actions, including layoffs and partial government shutdowns, which are contributing to fears of job insecurity. He noted that people are worried not only about layoffs but also about automation taking over jobs. Furthermore, Cramer noted that people are also anxious about the tariffs. In particular, there has been a lack of clarity from the White House on the necessity of some tariffs, leaving the public uncertain about the long-term effects.
As consumer confidence continues to erode, Cramer warned that people start to retreat, cutting back on spending, staying home more, and avoiding activities that contribute to economic growth. Cramer said that this is evident in the struggles faced by major retail companies, which are suffering due to reduced consumer activity.
“Is there anything the President can do about this? I think it might be time that he actually talks to people in a calm way about how many jobs could be created by cracking down on our so-called trading partners. Time to bury the hatchet with Mexico and Canada too, and don’t bury it in the head of Mark Carney, the new Canadian Prime Minister.”
Our Methodology
For this article, we compiled a list of 7 stocks that were discussed by Jim Cramer during the episode of Mad Money aired on March 25. We listed the stocks in ascending order of their hedge fund sentiment as of the fourth quarter of 2024, which was taken from Insider Monkey’s database of over 1,000 hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
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7. Plains All American Pipeline, L.P. (NASDAQ:PAA)
Number of Hedge Fund Holders: 9
Plains All American Pipeline, L.P. (NASDAQ:PAA) was mentioned during the episode, and here’s what Cramer had to say:
“Listen, sunshine, that’s a terrific stock with a 78% yield. Not only am I a buyer, but I wish we had it for the Charitable Trust.”
Plains All American Pipeline (NASDAQ:PAA) specializes in the transportation, storage, and terminaling of crude oil and natural gas liquids, offering related services like gathering, processing, and fractionation. Its operations cover various transportation methods and the processing of NGLs, including products like ethane, propane, and butane. In January, when Cramer was asked about the stock, he was bullish on it and said, “Oh, when you say so I like that stock. Still got a 7% yield.”
6. SoundHound AI, Inc. (NASDAQ:SOUN)
Number of Hedge Fund Holders: 21
When a caller mentioned that they had bought SoundHound AI, Inc. (NASDAQ:SOUN) low, Cramer advised:
“Okay. So look, I want you to sell SoundHound. I regard SoundHound as a complete meme stock. It’s part of the cohort that we see now. It trades every morning and it’s depending upon its relationship with NVIDIA and I don’t think the relationship is really that meaningful. I think you should sell SoundHound AI, okay? I’m putting it out there. I know it’s going to give you a lot of heat online, but I don’t care.”
SoundHound AI (NASDAQ:SOUN) creates voice AI solutions that enable companies to provide interactive conversational experiences in different sectors. Its products include resources for developing customized voice assistants and improving customer support through the integration of real-time data.
