Southern Business Review

Category: Company News

  • Fed Chairman Powell met with Trump for an 'informal dinner' to discuss the economy

    Federal Reserve Chairman Jerome Powell sat down with President Donald Trump on Monday.

    That marked their first meeting since the president nominated Powell to the post and follows months of strong criticism from Trump about his nominee and the Fed.

    The central bank said in a statement it was an “informal dinner” in the White House residence “to discuss recent economic developments and the outlook for growth, employment and inflation.”

    The dinner lasted about 90 minutes and was attended by Fed Vice Chairman Richard Clarida and Treasury Secretary Steven Mnuchin. Steak was served.

    Most presidents meet at least once and sometimes more often with the Fed chair. But given the president’s past criticism, it had been unclear if and when Powell and Trump would meet. The president had extended the invitation on Friday.

    A senior administration official confirmed the meeting and said it was “two on a side.”

    “No pitchforks. It was much more casual than an Oval Office meeting,” the official said. “They had a very good exchange of views.”

    The statement from the Fed said Powell’s comments to Trump “were consistent with his remarks at his press conference of last week.” Powell was said not to have discussed monetary policy expectations “except to stress that the path of policy will depend entirely on incoming economic information and what that means for the outlook.”

    Trump has been highly critical of the Fed for raising interest rates, including calling the Fed “out of control” in October. At its January meeting, the Fed shifted policy toward a more neutral stance away from rate hikes — at least for the time being.

    The president — who said in November that he was “not even a little bit happy” about his selection of Powell — has not commented on Fed policy since the shift.

    Here’s the statement from the Fed about the meeting:

    Statement on Chair Powell’s and Vice Chair Clarida’s meeting with the President and Treasury Secretary

    At the President’s invitation, Chair Powell and Vice Chair Clarida joined the President and the Treasury Secretary for an informal dinner tonight in the White House residence, to discuss recent economic developments and the outlook for growth, employment and inflation.

    Chair Powell’s comments in this setting were consistent with his remarks at his press conference of last week. He did not discuss his expectations for monetary policy, except to stress that the path of policy will depend entirely on incoming economic information and what that means for the outlook.

    Finally, Chair Powell said that he and his colleagues on the FOMC will set monetary policy in order to support maximum employment and stable prices and will make those decisions based solely on careful, objective and non-political analysis.

    —CNBC’s Eamon Javers contributed to this report.

  • If you hold Amazon shares, here's what you need to know about India's e-commerce law

    New restrictions put on India’s burgeoning e-commerce sector could potentially dent Amazon’s business in the country.

    India is an important growth market for the American e-commerce giant: Amazon has already poured roughly $5 billion into that market and is reported to have plans for an additional $2 billion investment in Amazon India. It has also been making inroads into the country’s offline space, buying equity stakes of local retail chains such as More and Shoppers Stop.

    India’s e-commerce market will exceed $100 billion by 2022, with online retail and travel holding more than 90 percent share, according to global consultancy PwC.

    Shares of Amazon fell on Friday as India’s new e-commerce regulation came into effect, in part due to the company expressing concerns about “much uncertainty” in the country. Amazon did not respond to CNBC’s emailed request for comments for this story.

    Now, Amazon is scrambling to reconfigure its business model, key partnerships and ownership structure to become compliant in India. Here’s what you need to know about recent changes to the e-commerce market in the world’s fastest growing major economy:

    Last December, the Indian government published a circular that effectively banned Amazon and its local competitor, Flipkart, from selling products of companies in which they have an equity stake.

    The document said e-commerce firms could no longer form exclusive selling arrangements with sellers or offer steep discounts to consumers based on those deals. Foreign direct investments would only be allowed into e-commerce companies that provide marketplaces for buyers and sellers, according to the new rules.

    Typically, e-commerce companies can make bulk purchases through their wholesale subsidiaries or other affiliates and then sell the products to preferred sellers they have agreements with, according to Reuters. In turn, those sellers can sell the products to consumers at low prices.

    The new changes came into effect starting Feb. 1, following complaints from local Indian retailers and traders about anti-competitive practices from the likes of Amazon and Flipkart, which is owned by Walmart.

    Analysts told CNBC the new e-commerce rules will have a short term impact on Amazon as it will compel companies such as Amazon to look for alternative business models in the absence of leaning on firms in which they hold an equity stake.

    “This will significantly impact the availability of products on these platforms in short term as these sellers account for minimum 45-50 (percent) of sales on these platforms,” Satish Meena, a senior forecast analyst at Forrester, told CNBC by email. He added that Forrester predicts a minimum of 5 to 6 percent reduction in online sales for 2019 due to the policies.

    On top of that, the government denied requests from Amazon and Flipkart to defer the implementation of the new rules to buy the companies more time to comply.

    With parliamentary elections set to be called by May, one analyst described the situation as political “posturing.”

    “The enforcement of the same (rules) is a different issue altogether and is dependent on how these companies interact with the policymakers, display intent and … policymakers’ willingness to seek a middle ground,” Ankur Bisen, a senior vice president at Indian management consulting firm Technopak, told CNBC by email. He explained that the situation is expected to stabilize later in the year once the government issues more clarity on the changes.

    As Amazon attempts to comply with the new rules, more than 400,000 items available on its Indian site could temporarily disappear, the New York Times reported last week. That would account for nearly a third of Amazon’s estimated $6 billion in annual sales in India, the paper said.

    On Wall Street, analysts mostly stuck by the internet juggernaut, tweaking estimates and lowering price targets slightly.

    The overall impact of the new rules on Amazon is “hardly … earth shattering,” Michael Pachter, managing director of equity research at Wedbush Securities, told CNBC by email.

    He cited estimates that the new restrictions would affect about a third of the goods Amazon sells in the country, so the company would only lose around $250 million in sales. Meanwhile, Amazon is expected to generate $280 billion in revenue this year, so that adds up to about 0.1 percent of its sales, Pachter said.

    While investors have a legitimate near-term concern, Amazon’s India play is “very much a long game,” according to R.J. Hottovy, consumer equity strategist at Morningstar.

    “We don’t expect Amazon to post positive profits in the region for almost a decade, which won’t change based on the new regulations,” he told CNBC. “Over a longer horizon, I expect India to ease some of these restrictions if it results in companies like Amazon and Walmart funding infrastructure projects in the region.”

    Technopak’s Bisen added that the rules would benefit local entities that are not owned by foreign firms as they are set to become more active in the e-commerce space. On the other hand, consumers who have long enjoyed a wide variety of products at low prices would lose out, analysts said.

    Given the amount of money involved in the sector, the government could relax some of the regulations, Forrester’s Meena added.

  • Cryptocurrency customers are unable to access their coins after Canadian CEO's death

    About 180 million Canadian dollars ($137.21 million) in cryptocurrencies have been frozen in the user accounts of Canadian digital platform Quadriga after the founder, the only person with the password to gain access, died suddenly in December.

    Gerald Cotten died aged 30 from complications with Crohn’s disease while volunteering at an orphanage in India, according to the Facebook page of Quadriga CX, which announced his death on Jan. 14.

    The platform, which allows the trading of Bitcoin, Litecoin and Ethereum, filed for creditor protection in the Nova Scotia Supreme Court last week.

    Quadriga has 363,000 registered users and owes a total of 250 million Canadian dollars to 115,000 affected users, according to an affidavit filed by Cotten’s widow Jennifer Robertson on behalf of the company.

    Robertson said in the affidavit that Cotten’s main computer contained a “cold wallet” of cryptocurrencies, which is only accessible physically and not online, and his death left “in excess of C$180 million of coins in cold storage.”

    Robertson said she was not involved in Cotten’s business while he was alive and did not know the password or recovery key.

    “Despite repeated and diligent searches, I have not been able to find them written down anywhere,” she said.

    Robertson said that she has consulted an expert who has had “limited success in recovering a few coins and some information” from Cotten’s other computer and cell phones, but the majority remains untouched on his main computer.

    Quadriga’s troubles highlight the unique challenges of cryptocurrencies, Dean Skurka, vice president of rival platform Bitbuy.ca, said in an interview with the Canadian Broadcasting Corp.

    “This really highlights the need for the government to take action and regulate cryptocurrency exchanges,” Skurka said.

    Robertson said in her affidavit she has received online threats and “slanderous comments”, including questions about the nature of Cotten’s death, and whether he is really dead.

  • Trump plans to choose Treasury's Malpass to lead World Bank

    The Trump administration has notified World Bank shareholders that President Donald Trump intends to pick senior Treasury Department official David Malpass as the U.S. nominee to lead the development lender, people familiar with the decision told CNBC and Reuters on Monday.

    The nomination of Malpass would put a Trump loyalist and a skeptic of multilateral institutions in line to lead the world’s largest development lender. Politico, which first reported the decision, said it would be announced on Wednesday, citing unidentified administration officials.

    A White House spokeswoman declined comment to Reuters, and a spokesman for the U.S. Treasury did not respond to queries about the decision.

    A senior administration official told CNBC that Trump “really liked” Malpass’ experience.

    “David has been covering the World Bank and inserting himself in World Bank matters for decades. The president likes Malpass, he served in his campaign and transition,” the official said. “He shares the president’s views. Malpass knows the World Bank senior staff and a lot of the senior staff support him.”

    A European diplomatic source said the Trump administration had notified several capitals of the Malpass nomination, adding that European shareholders of the bank were not likely to block it.

    Malpass or any other U.S. nominee would still need to win approval from the World Bank’s 12-member executive board. While the United States controls the largest share of board voting power and has traditionally chosen the World Bank’s leader, challengers could emerge.

    Former George W. Bush Treasury official Tony Fratto suggested that European nations could end up blocking Trump’s pick.

    “The test is, for the Europeans, if they will finally object to a clearly unqualified American nominee,” he said. “The alternative is to put in place a candidate who they know lacks interest in the very mission of the World Bank, and is instead hostile to the institution.”

    If approved, Malpass, the U.S. Treasury’s top diplomat as undersecretary for international affairs, would replace Jim Yong Kim in the role. Kim stepped down on Feb. 1 to join private equity fund Global Infrastructure Partners, more than three years before his term ended, amid differences with the Trump administration over climate change and development resources.

    Malpass in 2017 criticized the World Bank, the International Monetary Fund and other multilateral institutions for growing larger, more “intrusive” and “entrenched.”

    Over the past two years, Malpass has also pushed for the World Bank to halt lending to China, which he says is too wealthy for such aid, especially when Beijing has subjected some developing countries including Sri Lanka and Pakistan to crushing debt loads with its “Belt and Road” infrastructure development program. China is the World Bank’s third largest shareholder after Japan.

    But last year, Malpass helped negotiate a package of World Bank lending reforms tied to a $13 billion capital increase that aimed to limit the bank’s lending and focus resources more on poorer countries. The reforms seek to “graduate” countries to private-sector lending and limit World Bank staff salary growth.

    Given his history with the organization, some have objected to the notion that Malpass could lead the World Bank.

    “There is no case for Malpass on merit,” said Justin Sandefur, senior fellow at the Center for Global Development. “The question now is whether other nations represented on the World Bank’s board of governors will let the Trump administration undermine a key global institution.”

    Malpass, 62, was an economic adviser to Trump during his 2016 election campaign. He served as chief economist at Bear Stearns and Co prior to its 2008 collapse and served at the Treasury and State Departments under Presidents Ronald Reagan and George H.W. Bush.

    —CNBC’s Eamon Javers, John Harwood and Stephanie Dhue contributed to this report

  • Cramer breaks down an odd trend emerging in the chip stocks

    CNBC’s Jim Cramer has noticed a “bizarre dichotomy” between how the chip stocks and the stocks of their suppliers are trading, and it’s starting to concern him.

    While shares of the semiconductors have been roaring, surpassing a key hurdle Cramer flagged on “Mad Money” last week, shares of the industrial companies that supply the chipmakers have “been crushed,” Cramer noted Monday.

    In fact, DowDuPont, 3M, Illinois Tool Works and Honeywell — all of which make supplies for the semiconductor industry — flagged their technology divisions as areas of weakness this earnings season. At the same time, their customers — companies that make the equipment for building chips, like Lam Research — essentially called a bottom in tech.

    “You’ve got to wonder, isn’t this a dangerous contradiction?” Cramer said. “How can Lam be bullish on this business when 3M, Honeywell, Illinois Tool Works and, most importantly, DowDupont are so bearish?”

    For investors, Cramer’s rationale for how to proceed was fairly simple.

    “If this rally in the semiconductor cohort is right, if it’s accurately forecasting the future, then you want buy Honeywell,” he said. “But if the semis are wrong, look out below, because I think these industrials could have even more downside and the semiconductor stocks will get slammed, too.”

    Cramer argued that it would take a lot for the chipmaking stocks to revisit their recent lows, especially since most of the companies have already issued their earnings reports. That lowers the risk of negative, Nvidia-like pre-announcements, he said.

    He added that the industrial suppliers could have been excessively negative on their prospects. But he still did not recommend investing in DowDuPont, which he said “has too many problems” here, Illinois Tool Works due to its exposure to the weakening auto sector, or 3M given its lingering risk.

    As for Honeywell, Cramer saw “very few glitches, and some huge positives” tied to aerospace, climate controls and warehouse automation in its most recent quarter.

    “The thing I found most worrisome about Honeywell’s quarter? Yep, you guessed it, their semiconductor materials division, which had an unexpected downturn,” he said.

    Cramer’s conclusion? Those who are worried about the fate of the chipmakers should steer clear of these two spaces, and those who are bullish on the semiconductor rally should invest in Honeywell.

    “At least with Honeywell you have other, more solid businesses to protect you from the downside if it turns out that the worst isn’t over,” he noted.

    The VanEck Vectors Semiconductor ETF was up 0.49 percent as of Monday’s close, falling slightly in after-hours trading.

    Disclosure: Cramer’s charitable trust owns shares of DowDuPont and Honeywell.

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  • Sanders and Schumer's buyback plan is treating the wrong problem, says economist

    A new proposal to restrict corporate buybacks is treating the symptom instead of the cause — and could result in companies shutting down in the U.S., economist Diane Swonk told CNBC on Monday.

    Senate Minority Leader Chuck Schumer of New York and Sen. Bernie Sanders, an independent from Vermont, outlined their plan in a New York Times op-ed on Sunday. They want to prevent companies from buying back their own shares unless they pay workers at least $15 an hour and offer health benefits and paid time off.

    Swonk said those preconditions aren’t a good thing.

    “It is treating the wrong problem,” the chief economist at Grant Thornton said on “Closing Bell.”

    “Once you start doing this you are going to start closing down companies in the U.S. and having them go elsewhere even more so.”

    Last year, more than $1 trillion in buybacks were announced by large companies, who had a lot of extra cash to spend after the late-2017 corporate tax cut. The senators argued those buybacks were made instead of investing in employee pay and equipment, and said some even laid off workers while still buying back billions of dollars of shares.

    Companies are repurchasing their stock because they aren’t able to do anything else with their money — and that’s the fundamental issue, Swonk said.

    “Why are companies not investing? One of the reasons they aren’t is because the political dysfunction of Washington,” she said. “They are very uncertain and walking on eggshells in what should be a very good economy.”

    Brian Brenberg, chair of the program in business and finance at The King’s College in New York, is wholeheartedly against Sanders and Schumer’s plan. He called it “completely ridiculous” and a “destructive idea” Monday on “Closing Bell.”

    He’s believes share buybacks are ultimately good for the economy.

    “If companies don’t have good ideas about where to spend their money than they should give it back to investors and that money gets channeled to companies that have growth ideas,” Brenberg argued.

    — CNBC’s Liz Moyer contributed to this report.

  • Australian banking shares jump while the country's central bank keeps its cash rate unchanged

    Australian banking stocks gained Tuesday after a special government-appointed inquiry into the country’s financial sector did not recommend breaking up any of the banks or interfering in the way they lend money.

    Shares of ANZ rose 6.58 percent, National Australia Bank added 4.04 percent, Westpac shares added 7.26 percent and Commonwealth Bank gained 4.52 percent.

    The broader benchmark ASX 200 gained 2.19 percent as the heavily weighted financial subindex added 4.61 percent.

    Still, the so-called Royal Commission recommended measures that would subject regulators to a new oversight body and also overhaul the financial industry’s pay to remove conflicts of interest, Reuters reported.

    “Despite a year of high drama, evidence of widespread greed, as well as a blistering Interim Report, the Hayne Royal Commission delivered a very pragmatic Final Report,” analysts at Citi Research wrote in a note. “Of all the possible outcomes for the Major Banks, this is likely to be considered the best possible set of recommendations given the circumstances that the sector could have reasonably expected.”

    The Reserve Bank of Australia (RBA) kept its cash rate unchanged at 1.5 percent.

    In the bank’s monetary policy decision statement, RBA Governor Philip Lowe said that the outlook for global growth remained reasonable but downside risks have increased.

    “The trade tensions are affecting global trade and some investment decisions,” Lowe said in the statement. “The central scenario is for the Australian economy to grow by around 3 per cent this year and by a little less in 2020 due to slower growth in exports of resources.”

    Still, Lowe said, the growth outlook in the country is being supported by rising business investment and higher levels of spending on public infrastructure.

    Meanwhile, Japan’s Nikkei 225 gave up early gains to trade near flat while the Topix index gained 0.25 percent.

    Tuesday’s session in Asia followed overnight gains on Wall Street.

    In the currency market, the dollar index, which measures the greenback against a basket of peers, traded at 95.826, advancing from levels below 95.400 in the previous week.

    The Japanese yen, considered a safe-haven asset, traded at 109.95 to the dollar, weakening from levels near 108.5 last week. The Australian dollar, meanwhile, changed hands at $0.7206, coming off an earlier session high of $0.7229.

  • Asia markets gain as investors wait for the Reserve Bank of Australia's policy decision

    Stocks in Japan and Australia gained Tuesday morning as most other major Asian markets remained closed for public holidays.

    Japan’s Nikkei 225 added 0.37 percent in early trade while the Topix index gained 0.41 percent.

    In Australia, the benchmark ASX 200 gained 1.72 percent as the heavily weighted financial subindex added 4.75 percent.

    Major banking stocks in the country jumped: Shares of ANZ rose 6.19 percent, National Australia Bank added 5.29 percent, Westpac shares added 7.76 percent and Commonwealth Bank gained 4.98 percent.

    Those gains came after a special government-appointed inquiry into the country’s financial sector did not recommend breaking up any of the banks or interfering in the way they lend money. Still, the so-called Royal Commission recommended measures that would subject regulators to a new oversight body and also overhaul the financial industry’s pay to remove conflicts of interest, Reuters reported.

    Looking ahead, investors will watch the Reserve Bank of Australia’s interest rate policy decision, due at 2:30 p.m. local time, searching for clues that the central bank is moving to a more neutral stance.

    “We expect that the RBA will acknowledge the recent weak data flow and emerging global risks with a softer tone today, and that they will downgrade their growth forecasts,” analysts at ANZ Research wrote in a morning note. Those weak data points include weak housing market data, a drop in building approvals and a slump in business confidence.

    “We expect that the RBA will emphasise risks, rather than incorporate all the recent negativity into their central forecast,” the analysts said.

    Tuesday’s session in Asia will follow overnight gains on Wall Street.

    In the currency market, the dollar index, which measures the greenback against a basket of peers, traded at 95.852. The Japanese yen, considered a safe-haven asset, traded at 110 to the dollar while the Australian dollar changed hands at $0.7210.

  • When you're picking stocks, consider the CEOs who have learned from the best: Jim Cramer

    There’s a leadership rule in the sporting world that translates well when it comes to the stock market, and investors can use it to find winning stocks, CNBC’s Jim Cramer said Monday.

    “The coaching tree is a pretty simple concept: if you hire top assistant coaches who’ve learned firsthand from the most successful leaders in the game, they’ll be able to take that knowledge with them,” Cramer explained. “We know that there are some incredible CEOs out there who, in addition to creating enormous value for their shareholders, have also trained some very impressive disciples. Inevitably, some of these disciples leave to run companies of their own.”

    Eventually, that lineage can evolve into an “executive tree,” similar to the National Football League’s famous coaching tree stemming from legendary coaches Bill Parcells and Bill Belichick, the “Mad Money” host explained.

    “The best executive tree I can think of descends from … Marc Benioff, the visionary founder, chairman and co-CEO of Salesforce.com,” Cramer said. “Benioff’s got a real knack for fostering talent, … and when his lieutenants move on to run other companies, they have a habit of delivering some incredible performance for their investors.”

    Benioff, who founded Salesforce in 1999, has four main branches in his executive tree so far, Cramer said. The first is Tien Tzuo, who was Salesforce’s 11th employee, its first chief marketing officer and its first chief strategy officer.

    After nine years at the company, Tzuo founded his own subscription-service business, Zuora, which went public last April. Cramer has been bullish on Zuora, which helps other companies launch and manage their own subscription-based businesses, since the IPO.

    “Tien Tzuo literally wrote the book on the subscription economy, called Subscribed, and the numbers here have been downright incredible. I don’t want to diminish Tzuo’s own accomplishments. He had a brilliant idea here. [But] what first drew my attention to it was his corporate pedigree — the Benioff executive tree. It’s one of the reasons I’ve been such a big believer in Zuora,” Cramer said. “I think it’s got a lot more room to run.”

    The second branch in Benioff’s tree is Peter Gassner, the founder and CEO of Veeva Systems. Gassner used to be Salesforce’s senior vice president of technology and had a hand in building the cloud company’s platform.

    Now, he’s applying cloud tech to a whole new space with Veeva, which builds cloud-based software for the pharmaceutical, biotechnology and life sciences industries to streamline their operations and boost efficiency.

    “The sustained long-term growth here has been phenomenal, […] much like, well, Salesforce.com. Gassner’s background as a Benioff acolyte was among the reasons I started recommending it ages ago,” Cramer said. “I’m still a believer, although with the stock making a new all-time high, sure, of course, wait for a pullback.”

    Benioff’s third branch is Todd McKinnon, the co-founder and CEO of identity management company Okta. He served as Salesforce’s head of engineering for over five years, overseeing its growth from 2 million transactions per day to 150 million.

    The growth at Okta, which doubles as a cybersecurity play thanks to its specialty in authentication, has been “explosive,” with the stock nearly quintupling in value since its 2017 IPO, Cramer said, adding that he would buy shares on a pullback.

    McKinnon himself nodded to Benioff’s influence when he came on “Mad Money” on Okta’s 10th anniversary, telling Cramer that he “basically learned the ropes of cloud computing from Marc and the entire team at Salesforce.”

    The fourth and final branch is Twilio’s Chief Operating Officer, George Hu, who was COO and chief marketing officer at Salesforce. Twilio is a cloud-based company focused on software-enabled communication that boasts clients like Uber.

    “While Twilio wasn’t actually founded by a Salesforce alum, he has done a terrific job as COO and it’s not hard to see how his experience has helped the company advance its mission of helping other businesses connect with their customers,” Cramer said. “The stock has rallied more than 250 percent since George Hu joined the company in March of 2017 after leaving Salesforce. Another win for the Benioff executive tree.”

    The bottom line? Sometimes, you don’t have to look far from the executive tree to find stocks ripe for the picking.

    “The next time you hear about the concept of the coaching tree in the NFL, remember the same rules can apply to the business world,” Cramer concluded. “When you’re trying to pick stocks, look for networks of executives who’ve learned from the best, because as we see with the former disciples of a guy like Marc Benioff at Salesforce, they can give you some fabulous gains.”

    Disclosure: Cramer’s charitable trust owns shares of Salesforce.com.

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  • If you're investing in big tech, 'don't be distracted by short-term problems,' says Cramer

    Investors who own the likes of Apple, Facebook, Microsoft and Amazon need to remember why they bought those stocks in the first place if they’re going to survive the tech giants’ earnings reports, CNBC’s Jim Cramer said Monday.

    “Everyone who dumped Apple or Facebook or Microsoft earlier this earnings season now has a serious case of seller’s remorse. I think the same could be the case with Amazon and Alphabet,” he said on “Mad Money.” “Don’t be distracted by short-term problems that can vanish overnight like we saw with these winners. Focus on the long term, and the next time one of these terrific stocks sells off, then you know it’s time to buy.”

    Apple’s stock, for one, got some reprieve after the company’s negative first-quarter pre-announcement. Expectations were so low ahead of its late-January earnings report that the iPhone maker actually managed to surprise to the upside.

    But for much of last month, Apple’s stock was trading close to its 52-week lows, only catching fire after the company released its latest results. Shares of Apple ended Monday up 2.84 percent, at $171.25.

    And while Cramer wasn’t sold on J.P. Morgan’s suggestion that Apple buy a company like Activision Blizzard, Sonos or Netflix, maintaining his call that the tech giant should get into health care, he stressed Apple’s positive long-term outlook.

    “Given that Apple’s stock is up more than $20 bucks since we spoke to [CEO] Tim Cook, I sure hope that something’s going on here besides the possibility of positive trade talks,” he said.

    Investors saw “the same kind of whiplash behavior” in the stock of Facebook ahead of its report. The embattled social media giant also surprised Wall Street when its earnings results showed little impact from its data privacy scandals.

    “Yes, Facebook did a lot of shady stuff, but when we saw the numbers, we realized it didn’t matter to the people who do matter, which are the users. More than 2 billion people use some form of Facebook every day. The advertisers love them, it seems, more than ever. You may hate Facebook — I think a lot of people do — but it’s not going anywhere,” Cramer said. “Its stock turned out to be the steal in the tech group.”

    Microsoft’s earnings report showed some less obvious weakness: a chip shortage put pressure on the company’s personal computer business, which prevented it from blowing away analysts’ estimates, Cramer explained.

    “The chip issue wasn’t surprising. Somehow, though, it surprised the people who owned Microsoft, which is why they unceremoniously bailed out on it,” he said. “To me, that’s a huge mistake — you shouldn’t sell Microsoft because of a temporary short-term issue when the long-term story, particularly Azure, is so strong. Sure enough, the stock rallied nicely today.”

    Amazon’s problems were even less clear, but Cramer saw the sellers seize on two particular ones: a new rule in India that poses an obstacle to Amazon’s business, and an overarching concern that the e-commerce company’s retail gross margins have peaked.

    “No one seemed to notice the dominance of Amazon Web Services. Remember that? That was supposed to matter. No one cared about the growth of the advertising business,” the “Mad Money” host said, likening Amazon chief Jeff Bezos to an NFL coach. “Why would you assume that Jeff Bezos won’t change his game plan, come up with something new? He’ll adjust to the gross margin pressure. He’ll figure out another way to win.”

    “Of course, that does require patience, something that’s in real short supply in this market,” Cramer continued. “But that’s good news for anyone who’s willing to think long term and buy high-quality stocks into weakness.”

    Disclosure: Cramer’s charitable trust owns shares of Apple, Facebook, Microsoft, Amazon and Alphabet.

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