Jim Cramer, host of Mad Money, recently shared his thoughts following his interview with President-elect Donald Trump on the floor of the New York Stock Exchange. One of the key takeaways for Cramer was Trump’s comments about China. During the conversation, Trump emphasized his positive relationship with President Xi, which in itself was noteworthy.
However, Trump also remarked that China has not always been a responsible global actor and that this dynamic must change. Cramer highlighted that this is crucial for a number of reasons, particularly the need to protect Taiwan, which he sees as vital to safeguarding Taiwan Semiconductor, a company that plays a critical role in U.S. national security. Cramer also noted that the challenge lies in shifting China’s role from a long-standing adversary to a more balanced trading partner, a task he feels could be difficult given the longstanding trade issues between the two countries.
Cramer further pointed out the complexities of dealing with a country that has exploited U.S. trade policies for years. He said:
“But let me tell you what I think can happen, I believe President Xi needs the U.S. much more than people realize. The Chinese economy is more deeply indebted.”
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When it comes to the stock market, Cramer found Trump’s approach to be refreshingly straightforward, without any unnecessary bravado. He also observed that Trump’s openness toward cryptocurrency could have significant implications for the future of the U.S. dollar.
“I also thought the President-Elect had no bluster when it came to the stock market, that was a very good thing… The president-elect’s affinity for crypto will ultimately give the dollar a strange bedfellow. I want our country to be the capital of finance and that means being the capital of crypto too.”
He added that for this relationship to develop positively, Washington would need to address the growing national deficit, which he believes could diminish some of the speculative appeal of cryptocurrency.
“I want to believe that the White House’s attitude toward business is important to the direction of stocks. The current president is often going way out of his way to show his disdain for any business people. But what’s more important is profits so it certainly doesn’t hurt that Trump talked about wanting to cut corporate taxes once again to let more money fall to you, the shareholder. Love him or hate him, you gotta admit that’s good for your portfolio, which by the way, is still the true north of Mad Money.”
Jim Cramer’s Lightning Round: 7 Stocks to Watch
Our Methodology
For this article, we compiled a list of 7 stocks that were discussed by Jim Cramer during the recent episode of Mad Money on December 13. We listed the stocks in ascending order of their hedge fund sentiment as of the third quarter, which was taken from Insider Monkey’s database of 900 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Jim Cramer’s Lightning Round: 7 Stocks to Watch
7. indie Semiconductor, Inc. (NASDAQ:INDI)
Number of Hedge Fund Holders: 12
A caller asked about indie Semiconductor, Inc. (NASDAQ:INDI) and highlighted its revenue growth, $7.1 billion backlog, and CEO targeting over $700 million in revenue by 2028. In response, Cramer said:
“I think he may be a tad too bullish because the auto business is really much worse than people realize right now. So I’m going to have to take a pause on that one. I am sorry, you made a nice brief for it, but I can’t go there.”
indie Semiconductor (NASDAQ:INDI) specializes in automotive semiconductors and software solutions for applications in advanced driver assistance systems, autonomous vehicles, connected cars, and electrification. According to a newsletter, titled ‘Fuel for Thought: Tariffs, Taxes, and EVs: The Road Ahead for the Global Auto Industry’ by S&P Global Mobility, the potential second Trump administration poses significant uncertainty for the global automotive industry, particularly in relation to electric vehicles (EVs), tariffs, taxes, and trade relations.
Proposed policies, such as tax cuts, deregulation, and changes to EV incentives, could impact vehicle affordability and sales. Tax cuts may stimulate short-term economic growth but could lead to higher borrowing costs, affecting vehicle affordability, especially for EVs. Trade barriers, particularly proposed tariffs on imported vehicles, could disrupt the North American supply chain, raising production costs and consumer prices.
The newsletter highlighted that deregulation, including relaxed fuel economy standards, could slow the shift towards electric vehicles, potentially reducing BEV sales projections for the US. As a result, the automotive industry faces a challenging global environment, with trade disruptions, regulatory rollbacks, and changing market dynamics influencing the future of EV adoption.
During indie Semiconductor’s (NASDAQ:INDI) third-quarter earnings call, Donald McClymont, Co-Founder, and CEO, discussed several factors negatively affecting the automotive industry, such as the high cost of credit impacting consumer purchasing decisions and the ongoing surplus of vehicle and semiconductor inventory.
He noted that management had previously anticipated these challenges to continue into the second half of 2024, which has proven to be the case. However, he emphasized that claims of the automotive industry’s decline were greatly exaggerated, and while some uncertainty persists, the long-term market drivers of in-cabin experience, safety, and electrification remain robust.
6. Paychex, Inc. (NASDAQ:PAYX)
Number of Hedge Fund Holders: 20
Cramer said to wait for Paychex, Inc.’s (NASDAQ:PAYX) yield to climb to 3% as it has proven to be a successful strategy before.
“Okay, Paychex reports next week and I think this is on hold. Like a lot of people feel that if the Fed stops cutting rates or says, listen, we can’t cut anytime soon, the stock’s going to fall. Let’s wait to see. It yields 2.7%. I like to buy this stock at 3%. That’s been the right thing to do. Let’s employ that strategy.”
Paychex (NASDAQ:PAYX) offers integrated human capital management solutions, including payroll, HR, benefits, insurance services, and retirement plan administration for small to medium-sized businesses. As per the company’s guidance for the fiscal year ending May 31, 2025, it has maintained its forecasts across most categories, with the exception of some adjustments related to interest rate assumptions.
The company now anticipates a total of 125 basis points in cuts to short-term interest rates for the remainder of the fiscal year. This change is expected to directly affect the interest income on funds held for clients, as well as other income. Despite these adjustments, it continues to project total revenue growth between 4% and 5.5% for the fiscal year.
For its management solutions segment, Paychex (NASDAQ:PAYX) expects growth in the range of 3% to 4%, and its PEO and insurance business is still forecasted to grow between 7% and 9%. However, the company revised its projections for interest income on funds held for clients, now expecting it to be in the range of $145 million to $155 million, down from the previous estimate of $150 million to $160 million.
Additionally, other income, net is now anticipated to be between $30 million and $35 million, lower than the previous guidance of $35 million to $40 million. Despite these changes, the company has not altered its operating income margin guidance, which remains in the range of 42% to 43%. Adjusted diluted earnings per share are still expected to grow between 5% and 7% for the year.
