Cramer argues the bond market’s selloff, driven by higher oil prices and war-related inflation fears, has turned the tape risk-off and makes him less aggressive on buying stocks. He emphasizes data-center and AI beneficiaries like Nvidia, Babcock & Wilcox, and to a lesser extent quantum names, while warning that frothy IPOs and high-multiple speculation could trigger market damage.
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This episode of Mad Money is built around one central message: the bond market is in charge, and the recent jump in oil and Treasury yields has changed the near-term market setup. Cramer says the bond market 'threw a temper tantrum,' pushing the Dow, S&P 500, and Nasdaq lower, and argues that higher oil at around $105 is feeding inflation worries that make rate cuts unlikely anytime soon. He says this is especially problematic because the war with Iran could keep oil elevated, leaving him reluctant to get more aggressive on stocks. He then walks through a next-week game plan around a slate of earnings and investor events. …
Near term, this is a cautionary tape: higher oil and Treasury yields are pressuring equities, so aggressive risk-taking looks premature until rates stabilize.
Over the next few weeks, the market can recover if oil rolls over and yields ease; if not, rate-sensitive groups and speculative growth names may keep lagging while select AI/infrastructure winners hold up better.
Structurally, the episode argues that the AI era will favor power, data-center, and infrastructure enablers, but it also warns that liquidity can be destabilized when too much capital chases too few fashionable IPOs.
The bond market is driving the stock market lower because rising yields and inflation fears are now the dominant force.
He repeatedly says the stock market ultimately answers to the bond market and that higher yields caused the averages to turn ugly.
Oil around $105 is too high for the economy and is worsening bond-market anxiety.
He explicitly ties the rise in oil to inflation pressure and the selloff in bonds and equities.
Rate cuts are unlikely soon because inflation is running hot and the Fed cannot responsibly ease in this environment.
He says the rates signal cuts are off the table and criticizes the idea of cutting when inflation is red hot.
Does Babcock & Wilcox still do a lot of coal work and what about their coal backlog?
Kenneth Young confirms over 50% of their revenue still comes from supporting coal plants in the US and globally, with coal usage rising in Southeast Asia. He notes an ultra-super-critical coal plant can be as efficient as a combined-cycle natural gas plant, so there's value in keeping these coal fleets going.
Can you explain what the Base Electron project is and how it relates to Babcock & Wilcox's bookings and future?
Kenneth Young explains that Base Electron, set up by Applied Digital, is an independent power provider to meet data center electricity needs. Their project with Babcock & Wilcox will provide just over 1.2 gigawatts of power using four 300-megawatt steam turbines and boilers — traditional 1950s technology — and can deliver in under 36 months, much faster than combustion turbines which are on back order for 5-10 years.
How quickly can you build these power plants compared with combustion turbines?
The guest says their power plants can be produced in under 36 months, while combustion turbines are backed up for 5 to 10 years. He adds that existing manufacturing capacity across steam turbines and boilers lets them move much faster.
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