Business

Monday – Friday, 6:00 – 7:00 PM ET

It’s that time again! “Mad Money” host Jim Cramer rings the lightning round bell, which means he’s giving his answers to callers’ stock questions at rapid speed.

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Veru: “No, [I don’t think Veru shares will increase as much as Moderna’s did if Veru’s Covid treatment receives emergency use clearance]. I think Veru also needs to have that expanded needs of breast cancer, too.”

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ChargePoint: “It’s the best one of a bad neighborhood, though. … Here’s the problem: ChargePoint is not making money and we can’t recommend stocks that aren’t making money in this environment. It’s too hard.”

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Jackson Financial: “I like that call. I like that call. Nice yield. Annuities [are a] good business.”

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Ford Motor is cutting about 3,000 jobs from its global workforce, a majority of which are in North America.
The cuts will include 2,000 salaried positions and 1,000 agency jobs in the U.S., Canada and India, Ford Chair Bill Ford and CEO Jim Farley said in an email to employees that was obtained by CNBC.

Ford F-150 Lightning at the 2022 New York Auto Show.
Scott Mlyn | CNBC

DETROIT – Ford Motor is cutting about 3,000 jobs from its global workforce, as the automaker attempts to lower costs as part of restructuring efforts under CEO Jim Farley.
Ford began notifying workers of the reductions on Monday, a company spokesman confirmed. The cuts are for 2,000 salaried positions and 1,000 agency jobs in the U.S., Canada and India, Farley and Ford Chair Bill Ford said in a message to employees that was obtained by CNBC.

“Building this future requires changing and reshaping virtually all aspects of the way we have operated for more than a century. It requires focus, clarity and speed. And, as we have discussed in recent months, it means redeploying resources and addressing our cost structure, which is uncompetitive versus traditional and new competitors,” the message reads.
Ford’s cost-cutting actions are the latest in a series of efforts by companies to reduce expenses and employee head count amid fears of a potential recession or economic softening, with inflation hovering near a 40-year high.
The cuts, which were first reported Monday by Automotive News, come less than a month after Farley told analysts that “we absolutely have too many people in certain places, no doubt about it.”
The reductions are occurring across Ford’s businesses, which it split into two units earlier this year to separate its electric and internal combustion engine businesses.
“There are opportunities to be more efficient and more effective in all the business units and all the functions that support them,” Ford spokesman T.R. Reid told CNBC.

Ford employs about 31,000 salaried workers in North America. As of the end of last year, Ford had 186,769 employees globally, with 90,873, or 48.7%, of those workers located in the U.S.
Under Farley, who became CEO in October 2020, Ford is going through a massive transformation of the company called Ford+ that includes plans to cut $3 billion in structural costs by 2026, while investing billions to expand its electric and commercial vehicle businesses.
“We worked differently than in the past, examining each team’s shifting work statement connected to our Ford+ plan. We are eliminating work, as well as reorganizing and simplifying functions throughout the business,” read the message to employees.
Ford’s stock was down about 5% in afternoon trading Monday to $15.10 a share. The shares are down about 27% in 2022.

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Monday – Friday, 6:00 – 7:00 PM ET

CNBC’s Jim Cramer explained Monday why he’s not shocked by the Nasdaq Composite’s plunge to start the trading week.
The “Mad Money” host dove into two warnings he gave Investing Club members last week about the spillover effects of meme-stock manias.

CNBC’s Jim Cramer said he’s not shocked by the Nasdaq’s plunge on Monday, explaining that last week’s Bed Bath & Beyond trading frenzy indicated weakness in the index could be on the way.
On Monday’s episode of “Mad Money,” Cramer referred to two warnings he gave CNBC Investing Club members last week about the potential for meme-stock froth to spill over into the broader market, especially the tech-heavy Nasdaq. Those words of caution came initially Wednesday morning and then Friday afternoon. On Wednesday, Cramer trimmed two positions in his Charitable Trust to raise cash, citing the Bed Bath & Beyond fiasco as one reason to make the defensive sales.

“The next time you see one of these meme stocks roaring, I want you to ring the register,” Cramer said Monday. “At this point, the Nasdaq’s already down more than 6% from its highs last week, so, in some ways, it’s too late to sell even as I expect more pain. Better to just buy as we get closer to down 12% where the pain has tended to stop.”
Cramer reached the conclusion by looking at seven periods since January 2021 when a heavily shorted stock, or group of stocks, got bid up by retail traders to levels that were disconnected from underlying fundamentals. The first instance in the data set is the original GameStop frenzy in late January 2021, and the most recent example centered on the monster two-day move GameStop shares had on May 25 and May 26.

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Cramer said in six of the seven meme-stock resurgences he identified, the Nasdaq had a meaningful pullback in the weeks that followed. It doesn’t matter that some of the biggest meme stocks, including GameStop and AMC Entertainment, are not even listed on the Nasdaq. While the severity of the downturns varies, he said on average the Nasdaq decline was about 12%, the level where Cramer suggested it might be time to put money to work.
“I know the connection might seem a little tenuous to you. Why would meme stock rallies signal that stocks are peaking? Because it’s a textbook sign of froth. It shows you that the bulls are getting complacent, and speculation is running rampant,” Cramer said.
Part of the selling pressure could be related to retail investors getting burned and deciding to turn away from the market altogether. However, Cramer argued that the more important factor at play is how large market participants respond to the meme-stock froth.

“When money managers see this kind of action, they tend to throw up their hands and step aside for a bit because they hate it when stocks can’t be judged on the fundamentals, even if it’s stocks that they don’t really care about,” Cramer said. “In other words, these meme stock spikes make the hedge fund guys feel like the inmates are running the asylum, so they decide to take some profits and maybe go on vacation for a week.”

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Clean Start

Sustainable aviation fuel, commonly called SAF, has so far been expensive to produce, but new startups are now creating clean fuels out of carbon at a much cheaper cost. Now, new tax credits for clean fuel production from the recently signed Inflation Reduction Act could propel these companies further faster.
Most SAF is made out of organic vegetable oils, but Twelve, a chemical technology company based in Berkeley, California, is making fuel out of carbon. It just announced a collaboration with Alaska Airlines and Microsoft to advance production and use of Twelve’s E-jet, a lower-carbon jet fuel.

“Our process takes CO2, water and electricity as inputs. We use the electricity to break apart CO2 and water, and then we have catalysts that recombine the elements to make new products. And one of the things that we can make is the building blocks for jet fuel,” said co-founder and CEO Nicholas Flanders.

More from CNBC Climate:

The process, according to Flanders, is far cheaper than existing SAF production.
“The cost of renewable electricity has been falling over the last decade, so has the cost of CO2 capture, and so has the cost of electrolyzers, which is the technology that we use to transform CO2 and water into the building blocks for jet fuel,” he said.
Flanders says aircraft would not need to be changed in any way to accommodate the new fuel, which he said has 90% lower emissions than conventional jet fuel. That’s huge for airlines trying to reach aggressive emissions goals.
“We have a goal of reaching net zero by 2040. We’ve got five steps to get there,” said Diana Birkett, senior vice president of public affairs and sustainability at Alaska Airlines. “But sustainable aviation fuel offers the biggest opportunity of all of those steps to take a meaningful leap into that 2040 goal.”

At scale, the technology should be cost-competitive with traditional jet fuel, Flanders says. 
Twelve is backed by DCVC, Capricorn Investment Group, Carbon Direct, Chan Zuckerberg Initiative, Microsoft Climate Innovation Fund, Breakout Ventures, Munich Ree and Elementum Ventures. It has raised $200 million to date.

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Investor Toolkit

If you’re chasing quick returns, single-stock exchange-traded funds allow leveraged bets on individual assets.
But regulators and advisors warn these products may be too complex and risky for everyday investors.
“Single-stock ETFs are inappropriate and way too risky for over 99% of investors,” said Jason Siperstein, president at Eliot Rose Wealth Management.

Oscar Wong | Moment | Getty Images

Most investors think of exchange-traded funds as a simple way to buy a diversified basket of individual stocks tracking an index or with exposure to a particular theme.
But now there are also so-called single-stock ETFs, allowing leveraged bets on individual stocks.

However, regulators and advisors warn these products may be too complex and risky for everyday investors.
“Single-stock ETFs are inappropriate and way too risky for over 99% of investors,” said certified financial planner Jason Siperstein, president at Eliot Rose Wealth Management in East Greenwich, Rhode Island.
Here’s how they work: Rather than owning individual stocks, these ETFs contain “swaps,” which are contracts where two parties agree to exchange cash flows of one asset for another.
These contracts magnify the daily exposure of the individual stock, and tends to “juice the returns in one direction or another,” explained Ben Johnson, director of global ETF research for Morningstar. 
For example, TSLL offers bullish investors 1.5X the daily returns of Tesa, and the leverage factor resets every day.

“Oftentimes, it can be wildly different depending on the level of volatility,” Johnson said. The greater the stock swings, the larger the “volatility drag,” affecting your overall returns.
More from Investor Toolkit:There’s a new 1% tax on stock buybacks — here’s what it means for your portfolioDemocrats call for Social Security reform. What that may mean for your benefitsInvestors flock to green energy funds as Congress passes climate bill
While these products may offer some investors exposure to harder-to-access stocks, without an understanding of the “nuance and complexity,” average investors may have a bad experience, Johnson said.

‘These are tools that gamify investing’

Despite approving single-stock ETFs in July, the Securities and Exchange Commission has voiced concerns.
“Investors’ returns over a longer period of time might be significantly lower than they would expect based on the performance of the underlying stock,” SEC Commissioner Caroline Crenshaw said in a July statement. “These effects are likely to be especially pronounced in volatile markets,” she said. 

Single-stock ETFs are inappropriate and way too risky for over 99% of investors.

Jason Siperstein
President at Eliot Rose Wealth Management

Some financial asdvisors have also cautioned everyday investors about the volatility of these assets.   
“In my opinion, these are tools that gamify investing, which I think can be very dangerous,” Siperstein said. “There is no diversification, very high costs and are simply not necessary for the majority of people.”
The expense ratios for single-stock ETFs are closer to 1%, and the average cost for passively managed funds was 0.12% in 2021, according to Morningstar.

Vaughn Kellerman, a CFP with HCM Wealth Advisors in Cincinnati, said single-stock ETFs are more suitable for day trading rather than long-term investment, echoing the SEC’s concerns about the possibility of magnified losses.
While it’s possible to “maximize” returns if you bet correctly on the asset’s movement that day, there’s also greater loss potential on the downside, he said.  
For example, if the underlying stock moves down 10%, this product may be down 30% to 40%, Kellerman said.
In the same SEC statement, Crenshaw added that these products’ features and risks “would likely be challenging” for investment professionals to recommend to retail investors while fulfilling their fiduciary obligations. More

Your Hometown Deli, once the sole asset of a publicly-traded company, has been sold and closed.
The deli was once owned by Hometown International, which was valued at over $100 million.
The company said it transitioned to bioplastics following a merger with Makamer Holdings.

Hometown Deli, Paulsboro, N.J.
Mike Calia | CNBC

The small, money-losing New Jersey deli that was once the sole asset of a publicly traded company with a bizarre market capitalization of $100 million has been sold and closed, according to a regulatory filing.
Your Hometown Deli in Paulsboro, New Jersey, had been “temporarily closed” on June 19 while its management sought a new buyer, Makamer Holdings said in a filing with the Securities and Exchange Commission.

On July 1, Makamer sold the deli’s remaining inventory for $700. And then on Aug. 9, the company “disposed of its subsidiary Your Hometown Deli, LLC for a price of $15,000, consisting of $5,000 to be paid in cash and a $10,000 note receivable,” the filing said.
Makamer, a bioplastics startup, merged with the deli’s owner, Hometown International, earlier this year.
“After carefully evaluating its prospects, the Company’s new management has determined to sell Your Hometown Deli and its assets and focus on the business operations of Makamer as the Company’s business going forward,” the regulatory filing said.
“The delicatessen ceased its operation following the merger,” it said.
The phone number of the deli, which had just $25,004 in sales 2021, was out of service Monday when CNBC called it.

Online, the restaurant is listed as “permanently closed.”
Hometown International was previously headed by Paul Morina, a Paulsboro high school principal and wrestling coach in Paulsboro.
The company drew widespread public attention in April 2021 when the hedge fund manager David Einhorn in a client letter noted the disparity between the deli’s decidedly modest sales and Hometown’s sky-high stock market valuation.
“The pastrami must be amazing,” Einhorn cracked in that letter.
Makamer Holdings said it is now focused on making biodegradable resins to replace existing petroleum-based plastics.
For the three months ended June 30, the company reported a net loss of $9 million, which it attributed to the closing of the deli and the transition to bioplastics.
The last publicly known trade of Makamer stock was a sale of 300 shares for $9 per share on July 22. The company has a market capitalization of $327 million at that share price.

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Every weekday the CNBC Investing Club with Jim Cramer holds a “Morning Meeting” livestream at 10:20 a.m. ET. Here’s a recap of Monday’s key moments: Stocks slide to start trading week Oil declines after our Coterra sale alert Constellation bucks the market Another Amazon health-care move? 1. Stocks slide to start trading week All three major U.S. stock benchmarks were solidly in the red Monday, led by the Nasdaq ‘s decline of more than 2%. Both the S & P 500 and Dow Jones Industrial Average were down by more than 1%. Tech stocks, in particular, were seeing weakness as the 10-year Treasury yield rose above 3%, a key psychological level. A week ago, the 10-year yield was under 2.8%. Higher rates tend to pressure growth-oriented stocks, many of which are tech names. “We have pressure on the Nasdaq that is extraordinary. Classic slowdown stocks are doing well,” Jim Cramer said during the “Morning Meeting,” while noting that, in Friday afternoon column for Club members, he warned there could be more downside ahead for the Nasdaq due to the meme-stock blow-ups. “The market wants to go lower, and when it wants to go lower, we are glad we have cash. We can do some sales if the stock is up, but we want to be defensive,” Cramer added. That is why last week the Club trimmed its positions in Danaher (DHR) and Linde (LIN). We made the decision to raise cash because the market was overbought and the froth in meme stock Bed Bath & Beyond (BBBY) suggested the need to act cautiously. 2. Oil pares losses in volatile session Crude futures are well of their Monday lows in a back-and-forth session that’s taken oil from slight gains to steep losses. West Texas Intermediate crude has recovered somewhat to trade down less than 1% at roughly $90 per barrel. The U.S. oil benchmark had traded as high as $91.26 per barrel Monday, which, combined with natural gas prices surging, had energy stocks looking like one of the few bright spots on an otherwise down day. That motivated our decision to trim 300 shares of Coterra Energy (CTRA) early in the session because we’re looking to cut back on our energy exposure in moments of outperformance. In addition to the strength we saw early Monday — before it too went back and forth between green and red — Coterra shares also rose more than 5% last week. “We’re not traders, but we know these stocks are volatile and we like to take some off,” Cramer said. Remember, we don’t book our trades until 45 minutes after the alerts go out to Club members. While that policy means sometimes the stock goes lower after we publish the alert, that’s OK because our main goal is to inform and help members with their portfolio, getting you the best price possible. 3. Constellation bucks the market Constellation Brands (STZ) shares were higher Monday, reflecting the strength of more defensive-oriented stocks in a market rife with slowdown fears. We’re pleased to see this action because it’s part of our rationale for owning the parent company of Modelo and Corona. Morgan Stanley analysts on Monday also reiterated their overweight rating on Constellation Brands, which could be helping the stock. In a note to clients, the analysts raised their earnings estimates for the quarter ending Aug. 31 and argued the company’s market-share gains are accelerating. “I think this is finally warranted,” Cramer said, referring to the stock’s strength Monday. “I’ve been waiting for it to happen.” 4. Another Amazon health-care move? We’re looking for the right level to buy additional shares of Amazon (AMZN). However, the reason for our interest is not The Wall Street Journal’s report Sunday that the company is among the firms bidding to buy Signify Health (SGFY), a home health services provider. This news of Amazon’s interest in Signify comes about a month after the e-commerce and cloud giant agreed to acquire primary-care provider One Medical . Amazon shares were down more than 3% Monday. “This health-care initiative is not, I think, going to sit well with the shareholders. I think people want retail. They want Web Services, and they want advertising. I think that [health care] is too much of a black box,” Cramer said. In addition to concerns that another health-care move could spark major antitrust scrutiny, Cramer said he’s not keen on the idea of Amazon competing against other companies to buy Signify. That is likely to push up the price, potentially diminishing the attractiveness of the possible acquisition. “I don’t want Amazon bidding for anything against others,” Cramer said. SGFY shares surged more than 30% on Monday. For the Club, our interest in picking up more Amazon shares is about positive developments on restoring margins. Management has been working on correcting overexpansion issues, and last week we found out the company plans to implement a holiday surcharge on third-party sellers who use the firm’s fulfillment services. (Jim Cramer’s Charitable Trust is long CTRA, LIN, DHR, STZ and AMZN. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED. More

McDonald’s board is gaining three new members and losing one longtime director.
Sheila Penrose will retire Sept. 30 after 16 years on the board and surviving Carl Icahn’s proxy fight.
The new board additions include Marriott International CEO Tony Capuano and Salesforce CFO Amy Weaver.

McDonald’s has raised the price of its cheeseburgers in the U.K. for the first time in 14 years.
Justin Sullivan | Getty Images News | Getty Images

McDonald’s board is gaining three new members and losing one longtime director.
Sheila Penrose, who leads the board’s sustainability and corporate responsibility committee, will retire on Sept. 30 after 16 years on the fast-food giant’s board. Earlier this year, billionaire Carl Icahn targeted her seat in his unsuccessful proxy fight with McDonald’s over animal welfare, but she handily survived the challenge.

In a statement Monday, Enrique Hernandez Jr., chairman of McDonald’s board, praised Penrose for overseeing the company’s progress on its climate, responsible sourcing, and diversity, equity and inclusion targets.

Tony Capuano, Marriott CEO, at the WEF in Davos, Switzerland on May 24th, 2022.
Adam Galica | CNBC

The board elected three new members: Tony Capuano, Jennifer Taubert and Amy Weaver, who will take their seats on Oct. 1. The shake-up brings the total number of directors to 14 and doubles the number of female members.
Capuano is CEO of Marriott International, a position that has given him experience working with franchisees. He’s also a member of the Business Roundtable.
Weaver has been chief financial officer of Salesforce since 2021. Before that role, she served as the company’s chief legal officer. McDonald’s highlighted her digital experience as well, with her previous work at Expedia.

Jennifer Taubert, worldwide chairman of pharmaceuticals at Johnson & Johnson, listens during a Senate Finance Committee hearing on drug pricing on Capitol Hill in Washington, D.C., U.S., on Tuesday, Feb. 26, 2019.
Zach Gibson | Bloomberg | Getty Images

Taubert serves as executive vice president and worldwide chairman of pharmaceuticals for Johnson & Johnson. Before working at Johnson & Johnson, she was employed at rival pharmaceutical giants Merck and Allergan.

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