We recently compiled a list of the Jim Cramer on AMD and Other Stocks. In this article, we are going to take a look at where The Boeing Company (NYSE:BA) stands against the other stocks Jim Cramer is talking about.
Jim Cramer, the host of Mad Money, expressed concerns about the impact of rising bond yields on the stock market, suggesting that this trend could restrict the recent tech rally and limit broader sector gains. On Tuesday, he remarked that the bond market is creating significant disruptions, stating:
“Bonds are wrecking the narrative, driving the people outta everything that works when the Fed cuts rates and they’re going right back into tech. That’s the opposite of what, if you’re a true bull, you want to see.”
READ ALSO Jim Cramer’s Latest Game Plan: 20 Stocks to Watch and Jim Cramer’s Latest Lightning Round: 11 Stocks to Watch
Despite the Dow experiencing a modest decline of 155 points, the S&P 500 managed a slight increase of 0.16%, while the NASDAQ achieved a record close with a 0.78% rise on Tuesday. Cramer pointed out that the market is becoming increasingly narrow and exclusive, primarily benefiting tech stocks at the expense of broader participation, which he considers unhealthy. Cramer explained that this trend was somewhat anticipated.
He recounted how, when news broke about the Fed potentially implementing a 50 basis point rate cut, there was a surge of enthusiasm among investors who began buying bonds. They were betting on a series of rapid rate cuts, leading to expectations that bond yields would fall. Cramer noted, “It seemed a total legit thing, right? I mean the economy was slowing, that’s been the pattern historically.” He added that as inflation began to ease, it appeared that history was repeating itself.
However, following the significant rate cut on September 18th, something unusual occurred: long-term rates rose for the first time since 1995. This shift, which he described as a “total buzzkill,” is beginning to manifest in corporate earnings reports. He went on to say:
“If the bond market doesn’t start behaving, or at least calming down, if longer-term interest rates don’t stop going up, we’re going to start losing the groups that have led us higher for months now.”
In conclusion, Cramer warned:
“If it [the bond market] doesn’t stop its retreat, then we’re gonna start questioning the idea that the Fed will keep cutting rates, ushering in a fabulous economy for 2025, which is what I was looking for.”
Our Methodology
For this article, we compiled a list of 7 stocks that were discussed by Jim Cramer during the episode of Mad Money on October 29. We listed the stocks in ascending order of their hedge fund sentiment as of the second quarter, which was taken from Insider Monkey’s database of more than 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).
A commercial jetliner parked at an airport, reflecting the companies success in aviation.
The Boeing Company (NYSE:BA)
Number of Hedge Fund Holders: 42
Discussing The Boeing Company (NYSE:BA), here’s what Cramer had to say:
“You know what’s really a shame? This session should have been just terrific, terrific because far away from housing and bonds and tech, we witnessed a miracle of capitalism when Goldman Sachs priced 112.5 million shares of Boeing at $143, that’s a more than 5% discount to where it closed the night before, raising $16.1 billion. It was the largest follow on deal since the federal government dunked its AIG stake back in 2012. Boeing also raised a slug of money in the bond market, getting a total of $21.1 billion, enough to tie it over the company’s losing $1 billion a month.”
Cramer said that this achievement echoes a time from a few years ago, specifically during the height of the COVID-19 pandemic when the company issued $25 billion in bonds back in April 2020.
“Today’s equity offer means that Boeing’s viable again, there’s no longer a chance that it becomes a ward of the state even if the striking machinist union continues to play a high-risk game of chicken with management over wages. Now that Boeing has enough money, it’s finally got the leverage against the union and that means there’ll be a deal soon. Once that happens, they can go back to making planes. They used to do that, they can do it again… One of the most pressing overhangs in this market has now been removed from the bears’ equation. Boeing stock’s free to go higher. It may be much higher if CEO Kelly Ortberg can execute. I love miracles of capitalism. This was one of them.”
Boeing (NYSE:BA) is an aerospace leader engaged in the design, development, manufacturing, sales, and servicing of a wide range of products, including commercial jetliners, military aircraft, satellites, missile defense systems, human space flight initiatives, and related services. On October 23, it released its third-quarter financial results, revealing a revenue of $17.8 billion, which was slightly below the $18.1 billion recorded in the same period last year.
Boeing (NYSE:BA) faced a significant increase in core loss per share, which deteriorated to $10.44 from $3.26 year-over-year. The decline is because of the various challenges currently confronting the company, including ongoing supply chain disruptions. A work stoppage involving the International Association of Machinists (IAM) has further complicated operational efficiency. Despite these obstacles, the company continues to maintain a substantial backlog of over $511 billion.
Overall BA ranks 5th on our list of stocks Jim Cramer is talking about. While we acknowledge the potential of BA as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than BA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.