Lowe's shares rose more than 10% after the company posted better-than-expected second-quarter results on Wednesday.
This is not the only thing that supports stock actions during a session if you ask Jim at CNBC Cramer.
After Home Depot – Lowe's main rival – beat earnings estimates the previous day, a number of hedge fund managers loaded themselves with equity and decided to downsize Lowe, he said. It's short when an investor makes a bet that the stock price will drop in the near future and tries to turn a profit on the depreciation.
"This type of trading is a way of betting on the comparative results of companies in a particular industry," said the Crazy Money host, calling it "pair trading."
When Lowe reported this morning, they realized that they had played their hands wrong. The home improvement retailer saw slightly higher sales growth in the same stores in the US compared to Home Depot ̵
"Merchants know that discipline is a goat conviction, that is the rule. If a trade goes against you, you have to come out, which in this case means covering your short positions at any cost, "he said. "Disciplined short sellers buy back shares to close their positions and absorb the loss. This catapults things in the stratosphere."
Kramer gives more insight into the brief strains here
Traders are working on the floor of the New York Stock Exchange (NYSE) on August 14, 2019 in New York.
Spencer Platt | Getty Images
Kramer said the economy was in good shape, but Wall Street could turn into a recession.
The stock market, which climbed less than 1% during the trading day, continued to gradually recover from last week's massive sell-off, triggered largely by concerns over the recession signal, along with the protracted trade war between US and China.
Both and posted their fourth positive trading days in the last five, while completed its third in four days.
"If the president just calm the rhetoric on China and not accept them as some wide receiver talking about junk, the bears will lose their biggest crutch," said the host, who blamed his fears on the bond market of "angry rhetoric and frightening taunts by supposed experts "who need to listen to conference calls.
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The pulse of medium-sized business
Chad Richison, CEO, Paycom
Scott Mill | CNBC
The head of a payroll company told CNBC that he saw no signs of slowing down in the mid-sized business, despite growing fears of a recession.
Paycom CEO Chad Richardson said his company may not be a great "proxy" for the rest of the economy, but his company has a pulse on hiring in the country. The cloud-based HRM provider digitizes how employers manage their HR stores.
The technology company is a troublemaker in the payroll industry with more than 23,500 customers and targets businesses that employ between 50 and 5,000 people.
"I think the economy was strong," Richardson said in a one-on-one with Kramer. "We really don't see any deterioration in growth in [medium-sized businesses] but, you know, we're waiting to see what happens.
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Kremer Cloud Cover
Dean Stoeker, CEO, Alteryx
Scott Mill CNBC
Technology has influenced almost every industry and one subset transforms the foundation of business operations.
Cloud computing has been a topic of global growth in recent years, one of the hottest parts of the market, but still an ordinary human being. can't explain what a company is actually doing Jim Cramer told CNBC on Wednesday
The Crazy Money host topped a number of favorite stocks in the so-called and more risky Prince Cloud umbrellas, but only advised
"There are a lot of great opportunities in the cloud space, but if you are going to own these stocks, you have to understand what these companies are really doing, which is why we run this whole series of primers for clouds, "he said.
Cramer broke up and made recommendations for 11 names in the cloud based software cohort.
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Disclosure: Kramer's charitable trust
owns shares in Home Depot.
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