Digital media is becoming the best vehicle for retailers to get more traffic to their stores and websites, and that’s brightening the outlook for the stock of embattled social media giant Facebook, CNBC’s Jim Cramer said Wednesday.
“When you listen to the retailers that have reported lately, they all sing the same tune: the time has come to spend even more money on digital media. That’s the theme of the quarter,” he said on “Mad Money.”
And with more and more money pouring into digital advertising, “I think Facebook, the stock, is ready to bottom. Maybe it already has. Maybe it can go higher,” Cramer said.
Boosting online advertising is “mentioned over and over and over again on practically every retail conference call I’ve been on,” he noted as Facebook’s stock gained 2.5 percent intraday before settling up 1.7 percent.
And while Facebook’s namesake platform is losing steam as consumer tastes evolve, Instagram — which Facebook bought in 2012 — is still drawing advertising dollars, he said.
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Several key market sectors would get a boost if trade talks between the United States and China proceed without a hitch, Cramer said Wednesday as stocks rallied on renewed hope for a deal between the countries.
The Dow Jones Industrial Average climbed more than 458 points intraday after a Wall Street Journal report said China was working to foster better access to foreign companies in an effort to improve relations with the United States. All of the major averages closed modestly higher, but well off their midday highs.
“Why did almost every stock fly up on the news today, even though they gave up some of the gains in the afternoon? Because without a trade war, our whole stock market is actually worth more, hence why so many buyers went for the S&P 500,” Cramer explained. “This is a market where everything goes up on one day, and then tomorrow, we’re going to get more selective.”
The “Mad Money” host expected a couple of stock groups to benefit from improved trade talks on Thursday, beginning with the technology space.
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The global rules of engagement for cyberspace have unraveled in recent years as rogue nations took advantage of their ability to hack companies like Sony Pictures, FireEye CEO Kevin Mandia told CNBC on Wednesday.
“What I’ve seen over the last three years is the rules of engagement have broken,” Mandia, whose firm is partnered with more than 60 governments, told Cramer in an exclusive interview. “I’m not sure what’s going to happen next for many nations with a modern capability.”
The FireEye chief broke down how these unofficial rules have been eroded: in 2014, North Korean actors scrubbed the data at Sony Pictures after the studio released the controversial film “The Interview.” In 2015, Russian hackers broke into the Pentagon’s computers. In 2016, documents leaked by foreign hackers were center to a presidential election. In 2017, Iranian actors performed more cyber-intrusions on U.S. systems than ever before.
“In 2018, we’re all figuring out: where’s the boundaries? Where does it end? How do we have rules?” Mandia said.
Click here to watch and read more about his interview.
While many retailers are focused on creating websites that serve as counterparts to their physical stores, Signet Jewelers has a “competitive advantage” in its end-to-end omnichannel system, CEO Gina Drosos told Cramer on Wednesday.
“[For] a lot of retailers, people can just go online and buy things, and that’s absolutely fine. In the jewelry business, people want a connected omnichannel journey,” Drosos, who is leading her company on a three-year turnaround she calls a “Path to Brilliance,” said on “Mad Money.”
“So, for example, 40 percent of people start their search online for bridal jewelry or for gifting, but for bridal, certainly, more than 90 percent of the sales actually happen here in the store with our expert consultants,” she said.
Click here to watch her interview and learn more about the prospects for the Kay Jewelers, Zales and Jared parent.
With 140 million registered users across 190 countries, Wix.com is continuing on its mission to help “the small guys fight against the big companies” with “amazing,” personalized websites, the company’s co-founder, Chairman and CEO, Avishai Abrahami, told Cramer on Wednesday.
Ascend, a suite of products to help small businesses get more traffic to their websites and communicate better with prospective customers, will cost customers between $20 and $40 a month depending on the offering, the CEO said.
“It’s a way for you to bring more traffic to your website, and then it’s a small CRM and communication tools to talk with your customers. Basically, we took what would normally be 20 different products and integrated them into one consistent experience,” Abrahami said.
Click here to watch his full interview.
In Cramer’s lightning round, he flew through his responses to callers’ stock questions:
Southwest Airlines Co.: “That stock acts badly, I’ve got to tell you. It’s down 22 percent. I really think [CEO] Gary Kelly is too good to tell you to sell that stock down here, but oh, man. Other people like United [Continental Holdings] a lot better.”
United States Steel Corp.: “I want you to sell U.S. Steel and just keep Nucor. Nucor’s got a good dividend policy [and a] very, very good balance sheet. I can’t say that about letter X.”
Disclosure: Cramer’s charitable trust owns shares of Facebook.
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