When people are trading down from McDonald's you know times are tough, says Jim Cramer

my mission is simple to make you money I'm here to level the playing field for all investors there's always a b Market somewhere and I promise to help you find it Mad Money Starts Now hey I'm Kramer welcome to M money welcome to crr America people make friends I'm trying to make a little money my job is not just to entertain but to educate teach call me 1800 743 CBC tweet me at you Cramer on the one hand the consumer has no problem buying a $3,500 Vision Pro from Apple on the other hand the cons

umer can't afford a Big Mac with fries and a Diet Coke from McDonald's on the one hand the consumer willing to sell out $34.99 for the vinyl version of the tortured poet's Department by Taylor Swift but the consumers also struggling to pay $125 the core price tag of something bought at Dollar Tree how's it possible and how does it impact our markets on a day like today where the D lost 274 points S&B declined 32% and that's dipped .2% although I have to tell you at one point midm morning around

10:30 we're down so much more the answer frankly is pretty Stark it's not one consumer there are two consumers in this country there's a consumer who's spending a fortune feeling extremely flush then there's a consumer who's extraordinarily press he can't afford to go out because prices have gone up too much it's like we do have two countries here that's how Stark these divisions really are as long as the wealthy consumer isn't struggling and the cash tra consumer remains Under Pressure we know

that inflation remains a problem and inflation is a problem fed is not going to cut in straight anytime soon something confirmed by fed Chief J pal in his appearance on CBS 60 Minutes last night so if the short rates that the FED controls aren't going down there's this difficult reverberation in the bond market that causes longer term rates to go higher making everything even more expensive for those who have little money without really impacting the wealthy in other words it doesn't help to rai

se rates from here but if the FED Cuts rates and inflation comes back it's even worse for the consumer the consumer's in a jam at least one of the two consumers it all comes down to the statistics take last Friday we got that hourly earnings from the labor department non-farm pay report and well the wages rough 4.5% year year now that was more than expected robust robust enough to rankle the bond market the combination of higher wages with 353,000 new jobs added had investors furiously dumping b

onds something that sent them down and price and up and yield that process continue today now consider the weaker earnings numbers that we got for today from McDonald's the one that caused the steady reliable Company stock to plumet $1 to 3.73% sure some of that's about their business taking a hit from protests related to McDonald's because one of their franchisees in Israel offered a discount for Israeli soldiers not popular in some parts of the world but there's something else going on too som

ething that's indicative of the two consumer country that I'm talking about the terrific CEO of McDonald's Chris Chris kensky talked multiple times on today's conference call about affordability usually don't hear that on me Donald's call and how the consumer's trading down even at McDonald's and part because the companies put through mid to high singled digigit price increases to cover their own inflation costs there's transaction size reductions too think about it when people are trading down

from McDonald's of all places you know times are rough for that one consumer the let me just do the arith it's very easy wages are up 4.5% but prices are up more than that for Many Items so McDonald's customers are driven to lower PRC items or even cheaper places to eat like the home listen to what Chris has to say quote where you see the pressure with the US consumer is the lowincome consumer so call it $45,000 and under that consumer is pressure from an industry standpoint we actually saw that

cohort decrease in the most recent quarter particularly I think as eating at home has become more affordable there's been much less pricing that's been taken more recently on packaged food so you're seeing that eating at home is becoming more affordable end quote tough for the fast food value proposition good for lower pric supermarkets so where else do we see pressure hey Dollar Tree talks about all the time there's another outfit that we've historically seen gain during periods of declining e

conomy but their customers strapped Dollar Tree recently said that lower income Shoppers are really hurting and are going to their stores to find bargain but on their conference call CEO Rick dring said and I quote and this one blew me away in the last 12 months we have added 4.3 million new customers at Dollar Tree 2.3 million new customers at Family Dollar that's another division of theirs he then went on to say quote most of these new customers in the past year have household incomes of $125,

000 and quote wow $120,000 5,000 and go in the Dollar Tree again you got two consumers here you got the strap even goes up to 125 you got the non- strap did you know that people who are earn who earn 125,000 a year are feeling strapped in the country that's a sure sign the prices really are still out of control and inflation while going the right direction isn't going fast enough or big enough who are the real winners I I think and I got to tell you the stocks are telling me I am dead right ther

e are two winners there are Walmart and there is Costco Walmart's the nation's largest quer 37 million people shop there every day Costco covers 72 million households that's where the trade down is most evident now I don't pretend to have the pulsive prices at these stores but when I go to my Costco or my Walmart I am indeed stunned at the roll backs and the lack of higher prices that I'm now see getting quite used to it's larger grocery stores that I go to I mean I can see why the CEO of McDona

ld's means what what he says that people are staying at home these are the places Costco and Walmart that are holding the line against all of their suppliers they're trying to get better prices for you but what about that $34.99 tayor Swift vinyl what about the $35 Apple Vision Pro you need to understand that that's the other country those who are doing very well and everything seems affordable the ones buying the Vision Pro aren't cash strapped especially when they can buy this thing using the

Apple card pay no interest on the $3,500 device over a 12month period with a 3% cash back up front on the full cost can charge that much and still get plenty of buyers because lots of people have jobs and judging by the labor report can get better ones if they need to they get a second one they need to I think the rally in Apple stock was up almost two bucks today reflects the dawning that the DOR Vision Pro might be worth it Taylor Swift someone say she's indispensable I'd say a vinyl Swifty fa

n or a CD or cassette fan yes she's bringing them all back and at much higher prices than digital is part of the not strapped economy the part that can take advantage of the plentiful job market and earn more money without much of a problem to these people the FED leaving Short rates higher actually means they can earn more in their savings account if anything leaving rates higher for these people longer gives them more spending power these are the people who can go to Chili's and not Blan at a

$15 J or a KAS Amigos Marg for 13 smackers I love a good Margie but when it came to charging that at bar s Miguel which I used to in Brooklyn no couldn't would never take it that high judging by the humongous numbers we got from Brinker Chile's paring company there are plenty of customers who don't mind no who love paying those prices all right let's really go tail two cities American Express talked about an 11% increase in dying out even as McDonald's talks about trading down which brings us al

l the way back to the concept of the two consumers there's a consumer that JP palal isn't worried about the one who can handle the years of rampant inflation we've had since 2019 and then there's a consumer that J pal is worried about and that's the one who hasn't seen his or her wages increase as much as inflation no Pal doesn't want to burn down the economy in order to save it he doesn't want to throw people out of work to get prices lower but he's trying to keep prices from going higher for t

he lower income people and if the upper and middle tier wants to share in those lower prices or buy the vinyl tortured poets Department we'll rock on it won't be easy to sort everything through is McDonald's going to roll back prices Apple Dollar Tree you revert to $1 pricing or eliminate the higher prices that it charges for a whole bunch of things now neither can pull that off without sacrificing their margins and their earnings and their stocks but what I would say is that they need to look o

ut because while the FED can Crush many kinds of inflation the real inflation That Matters to Everyday consumers the cost of gasoline the price of food well that's not something that they can control the Bountiful perum Basin is in charge of keeping oil down while the United States of Costco and Walmart make food affordable for those who can't afford the double Big Mac let alone the Kramer white fve Wendy's stubble Baconator please hold the Tomato bottom line High rates may not be helping but th

ey aren't hurting yet either in right now at least in the meantime we've got a bifurcated consumer in this country and until you understand that nothing in this market will make sense at all let alone the inequality that comes with it let's go to Ron in California Ron hi Jim your staff may be the nicest people I've ever spoken with yeah man what's up I've loaded up on shares of this company the last four months as I think it is in a sweet spot for infrastructure it had a top and bottom line beat

last week and a stop pop 12% it did take some profits it also raised the dividend 10% it announced a $1.5 billion buyback equal to 4% of its stock and coupled with the 1% dividend that's a 5% return right off the bat yet the analyst premum much hate the stock and there's a short position of 6% am I missing something with United Rentals or is it a keeper well there is a a short position now I cannot in good conscience recommend a stock that really was at uh 396 in October is now 645 I could in g

ood conscious recommend the stock though if it went below 600 so I am going to be price sensitive in suggesting that that's what you do let's go to Stefano in New York Stefano jimy chill how are you man you have game I like that I need some game it's Monday late no one's talking everybody's like looking down I'm ready to roll what's going on so this company I'm talking about is beat top and bottom line I listen to the earnings call but there's a lot of secret projects a lot of top secret project

s with the Pentagon Department of Defense I am calling about the American Giant locked Martin where is this stock going this year okay at 3% I am saying you should buy locked Martin 3% yield Jim taet the stock has been a complete bow while an absolute dog but you know what take's got game I'm a buyer let's go to Robert in Florida Robert hello Jim how are you doing I am doing well today Robert how about you great um so my question is your take and uh your idea on the biof pharmaceutical category

Bristol Meyers squib I seem to be falling catching the Fallen knife within the whole last two years with yeah I think that you're catching a falling night because they do have these Lo of exclusivity situations a lot of their big drugs I think it's a 5-year plan to turn around the company it's going to take patience and you're going to be paid that 5% yield while you wait I prefer I know it's old hat by now but I still like El Li liily look right now we got this B forget consumer in our country

but you don't know about it until you dig down into the conference goal you have to understand that it's impacting the companies you own it's impacting the stock market in general the bonds the Federal Reserve everywhere just think of it as McDonald's versus Taylor Swift on man Mone tonight last week's big earnings reports overshadowed an important move I'm seeing in the life science bace I'm sharing where I think the core could be headed in the best way to play then one of the incredible Charte

rs has spotted an opportunity in a cloud database software company that could have 36% upside you do not want to miss this one I'll reveal the name later in the show when we go off the charts and you call you stun me with axom Therapeutics tonight I'm turning my homework you know what I like it so stay with [Music] Kramer don't miss a second of Mad Money follow at Jim Kramer on X have a question tweet Kramer # mad mentions send Jim an email to madmoney cnbc.com or give us a call at 1 1800 743 CN

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