Weak housing starts will no longer be a bullish signal, says Jim Cramer

My mission is simple, to make you money. I'm here to level the playing field for all investors. There's always a home market somewhere and I promise to help you find it. Mad MONEY starts now. Hey, I'm Kramer. Welcome to MAD MONEY. Welcome to Kramer, I'll do my friends. I'm just trying to make a little money. My job is not just to entertain but to educate, do some teaching. So call me at 1800 and 743 CBC, tweet me at Jim Quamer. Well, this was a Sunday day. Day dipping 58 points, one point much worse than that SP declining .04%. That's like advancing .12%. It closed out a huge week for some of the averages. Then again, when I say the averages, what I really mean is any tech stock related to artificial intelligence. That's what led us higher again. Everything else, not so much. I always tell you not to be scared away from these stocks just because there's a narrow rally. But at this point, they've run so much that indeed you have to be concerned about a pullback more than that later. Most of the market has no traction at all, but tech's so big that it's over and everything else not sustainable long term, as much as it's really great if you focus on these stocks like we have. And with that out of the way, let's go to our game plan for next week. All right, let's start with the fact that we know the linchpin, the most important part of the economy when it comes to inflation, when it comes to retail, when it comes to both rent and mortgages, even renovation, remodeling is intact. It's the home. The median price of a house has advanced to staggering 28% since 2019, way too much for the Fed to stand, even as it's pulled back from up 40% not too long ago. At least going the right direction. That's why we are going to spend so much time pouring over what we hear from Lennar and KB Home when they report on Money and Tuesday respectively. We need to find out if more houses are actually going to be built thanks to strong demand or will the home builders keep supplies so tight the housing prices simply won't be able to come down, which has been the case. Now ideally want the homeowners to flood the market with housing so that the price becomes more affordable regardless of the mortgage rate. But the homeowners haven't cooperated because obviously over buildings bad for business. Instead, they're being cherry and and unusually disciplined. Right now. They're often building almost to suit not much more. And that keeps housing prices up and keeps gross margins up. And most important, it it keeps their stocks up, but it's terrible for inflation fighting. So far the home building stocks have hung in there because we have such a housing shortage. But how long can that continue when we start to see pushback on pricing with so many other goods like apparel, dining out, expensive airline tickets, all which going up so dramatically in the in the last five years. I think these two companies will tell us, keep in mind the price of a home is not in the CPI, just the price of shelter, which then comes down to rent. But you can read a lot of the lot of different themes through these two companies. Housing punches above its wing. You have so many industries that are levered to it from lumber and plastic, the Washington dryers, televisions, Home Depot, Florida core building, the building builders first source. I mean, everything in the aisles of these stores gets touched by home sales. And that's why we must pay so much attention to two companies that aren't exactly NVIDIA and Microsoft. Next up, if we were going to go to Vegas, which we're not, we will be piling into the Hewlett Packard Enterprise meet of their powwow their their Discover conference keynote where NVIDIA Jensen Wong will be meeting with Antonio Neri, the CEO of HP. You will Packard Enterprises question when they reported recently as they and Dell have become two of the big implementers of generative AI equipment that we talked about South much on the show. You need their help to integrate accelerated computing. These stocks are still holding up. All their others are sliding. It's pretty amazing dichotomy isn't how long can it last though? That's a central issue to this current stock market. Now here's something worth paying attention to that no one's going to be focused on Citigroup. Citigroup is holding an analyst day that's devoted to the services business. Now, this is the most consistent and least promoted part of the bank. It includes the Treasury and Trade solutions part of the operation, which is exceedingly lucrative and rarely gets any notice at all. I think the meeting could move a stop. Oh, as I've mentioned, we are suddenly out of nowhere worried about a sudden stalling of the economy given how weak all the macro numbers were that we saw every single day this week. So I can only imagine how light the retail sales numbers will be when they see them on Tuesday morning. Many retail stocks have been unsteady of late to say the least, and you need to know that there really are only four that are constantly doing well, and that's Amazon, Costco, TJX and Walmart. Other than that, it's been a very tough time. If you stick around, I'll explore the pain of our age. Formerly Restoration Hardware, which saw its stock meltdown today after really ugly quarter. Wednesday we commemorate the end of slavery in this country. The exchange will be closed for Juneteenth. Thursday. We're back to a parade of earnings and data that can move the market. 1st we had housing starts. Interest rates went down this week, but those numbers could be subdued because it takes time for that to affect mortgage rates. This is going to reflect the higher rates that we just had. We know this market starts to react negatively to negative news. That's bad news is bad news. Again, you get a weak housing starts number at this point, so little bullish. It's a big change for the days when we were wish for. We wish for weaker numbers because it might spur the Fed to think about cutting rates. Now we think, hmm, the Fed staying higher for longer. The data shows real weakness that could hurt. Then we get results from four really important companies to tell a lot about different industries. Accenture, Kroger, Garden and J Bill Accentures quietly fallen more than 100 points from its high of 387 in March. It's brutal because this is a company that should be at the forefront of AI integration into the enterprise. But when Accenture last reported, it cut its revenue forecast and investors fled like rats from a sinking ship. I wonder if they can pull out of the tailspin. I'm not sure, Kroger's been trying to buy Albertsons for ages, way back in October 2022 and the regulators have just not blessed the deal in the interim. It's had quite a run with the stock up 10% for the year. The company itself is doing really well. At this point you have to ask whether maybe it's just time to move on. I think they should consider doing so because the FTC is not friendly to this deal even though there's a very little over app between the two chains. Meaning the murders the furthest thing from anti competitive. But that doesn't matter. You see this now Kroger risk becoming what I used to call a Trump stock because the FTC is not going to let this one go through. But maybe the Trump FTC would. This week, several firms cut their price targets for Darden. OK, now what is that? That's the parent of Olive Garden. Usually we see these number cuts. It's a bad sign. It means you're going to get a disappointment. Stocks generally $30.00 from its peak over 9% for the year. But it could still go lower if they say that their pandemic year of price hikes are now hurting their business. Finally, J Bill reports and this is a contract manufacturer for a host of injuries. Everything consumer electronics and automotive to healthcare, retail, telco and energy. By the way, these guys are a big manufacturer of Apple products. But it doesn't directly talk about Apple to Wall Street or in its conference call. You're not supposed to do that if you work for Apple, you're not supposed to talk about Apple. We still try to divide how Apple might be doing, though. It takes a lot of work. Next, used car prices are still part of the inflation problem. They haven't come down enough. They're very sticky. We didn't hear from CarMax, a giant used vehicle dealer, to see if there's a chance that this key inflation component can cool off and start going down enough truly make a difference with the CPI. Here's the bottom line. Last night, I bemoaned that there aren't enough stocks that are compelling away from tech. Too many landmines. Let's see what happens next week and whether we get enough data this week. But not too weak, because it's very hard to imagine the Fed cutting rates until the fall at the earliest. And this week's numbers suggest that hire for longer might be too inflexible a strategy for suddenly gassed economy. Let's go to Michael in Virginia. Michael Boo. Yeah, Jim, thanks for having me on. I'm thrilled that you're here, Michael. How can I help? Last time we spoke, I mentioned that I purchased shares of Zoetis ZTS around 187. That was back in March 4th, 2024. A month went by and I called in. I asked you what was going on because the stock traded all the way down to 163 now. Yeah, I was in pain, Jim. It, it it improved, Jim. I, I, I, I, I, I It's a very tough one, Michael. It's a very tough one. I'll tell you why because this has been slow and steady wins the races. Suddenly seems like people like Alanco more than like so lettuce. That's really incredible. And so lettuce has a lot of good things and Christian packs a terrific CEO. But this was a one horse race. Suddenly there's competition and it is a little worrisome. That's what I think is driving the stock lower. Let's go to John in North Carolina. John. Hi, Jim, this is John, longtime listener, first time caller. I have a call about MasterCard. Is it still a buy at 4:40? OK. I think that I think that Michael Meebak is doing an excellent job. I think the stock has been a buy the whole time for the whole run. I took it off after making some money for the Chapel Trust. I do want to get back in. I'm hoping for it to come down. It doesn't seem to want to come down. I like the stock very much. We're not done taking calls. We're going to go to TAD in North Carolina. Tad, hi, Jim. First of all, thank you for helping me become a better investor. It's had a big impact on my life and on my family. I really appreciate it. Thank you. How can I help? Calling about it has been great to me over the past year or so, but recently after an analyst's cautionary comment, it has fallen significantly. I think it's probably a good time to add, but I wanted to get your opinion on it and the company I'm calling it out is Celsius. All right, wow, I have been working so much on Celsius because it keeps going down, down, down, down going debt. But I will tell you this, my friend Sarah Eisen actually has John Field Lee on her show on Monday. So I got to tell you, as far as I'm concerned, we're going to get to the bottom of it because Sarah is not going to let this go until she finds out why it's going down and whether it can stop. That's what my friend Sarah will do. Look, right now there are just too many stops out there that are landmines. We have to wait and see how the economic data looks next week because it's hard to imagine the Fed cutting interest rates until the fall. Oh, man, money type RH the stock forming those restoration hardware's tumbling after earnings. But can bright spots be found between the couch cushions? Oh, I'm doing a deep dive on the cloud sofa itself. But puts the NASDAQ had its best week since April. But where do you, where do other sectors stand? How should we hold wit what coming on? Besides that, I guess is the way to look at it. That's why we're going to play MI Diversified. But first, my series on healthcare stocks wraps up tonight with one of the first companies I featured on, Mad Money Regeneron. The stocks have a cool 21,800% since I first recommended. Not bad, right? I think anyway, our view of the move can continue. So stay with Kramer. Don't miss a second of Mad Money. Follow at Jim Cramer on X Have a question? Tweet Kramer hashtag MAD mentions. Send Jim an e-mail to [email protected] or give us a call at one 807 four three CNBC. Miss something? Head to madmoney.cnbc.com.