Earlier. There are two kinds of trading halt, the kind caused by some sort of computer malfunction and the kind where government stops trading because stocks are in free fall and its the only way to break the velocity of the decline. Trust me you want to be in the trading hall caused by the computer crash and the New York Stock Exchange and not the one with the stock market crash namely the indices that trade in china, but you wouldnt know it judging by todays horrendous action. The dow tumbling 261 points and the nasdaq tumbling 1. 75 . There were not one, but there were two marvels today. The first was that the New York Stock Exchange went down and, i dont know, nothing really happened. Trading got rerouted to other exchanges and as painful as it is to say it got to the market was as bad on the other exchanges as it would have been in the New York Stock Exchange. I can remember a time when the New York Stock Exchange was the only game in town and this outage would have caused widespread panic and a huge across the board decline. [ screaming ] i can recall another time six years ago when we had a flash crash where the machines themselves caused stocks to plummet. That sure didnt happen today. I know it sounds counterintuitive, but today we actually saw the strength of the system and not its weakness thanks to the power of competition. Remember, the New York Stock Exchange used to be a monopoly. You have to be thrilled by the wonders of competition because while it was disheartening to see the heartbeat of the New York Stock Exchange, absolutely go flat line for most of the day, it turns out this markets got a lot of hearts pumping and theyre pumping pretty furiously. Lets talk about the second marvel and the marvel that has our markets now taking their cue from whatever the worst market in the world is doing right now. You name it. Worst one, we imitate it. The tale tail of europe has been wagging at us for ages and im sick of it and taking down highquality domestic quantities that have nothing to do with that continent and now, just terrific. Weve got the darn tale of china. Can you imagine . Wagging us right now, wagging the United States of america. Yeah, this ones in charge now. I think they ought to call this one, which one should i use . Which book would be good . How about getting back to even . China is in freefall and it would have been much worse than there was last night if there had been a halt in 74 of their stocks largely because of an abundance of sellers and not enough buyers of the government . I like to worry about things that others arent focusing on and what bothers me about the horrendous drop on the shanghai composite, it wasnt even on the front page of the New York Times. I wrote down here no china. This is real life and this has always been my barometer of knowledge. They had it all over the place, but until the times starts having it and until it gets right here somewhere ive got to tell you something, i dont think that its hit the mainstream and until its hit the mainstream people are still going to be worried. It should be on the Mainstream Press because even though the shanghai composite is still up for the year its been in a steepfall that looks a lot like the nasdaqs runup and then vicious decline in the year 2000. Check this out. The parallels are almost eerie. The nasdaq moving from 2500 in may of 1999 to 3,000 in november of 1999, to 4,000 in december of 1999 the 5,102 in march of 2000. How about china . Put it up. Take a look. November 2014. Shanghai composite, 2500. December 3,000. 3500 in march, 4,000 in april and 4500 in may and peaks at june 12 at 5,174. Can you believe that . Go ahead north face k2 lets hear about it pretty similar. Nasdaq shed 1,000 points by the first week of april and 2,000 points by october of 2000 and another hundred points in december of 2000 and finally bottoming out at 1,114. How do you say round trip . Pretty hideous especially the first 35 down which occurred in the first 29 days. 35 down 29 days and thats exactly what weve seen in china with the shanghai composite plunging 32 from its peak less than a month ago which makes the comparison to act especially that if it hadnt been for a halt the Chinese Market would have been substantially lower. These declines. I call them evil twins. The Chinese Government unlike the nuz 2000 is trying to stabilize the market with buy programs and shortselling restrictions and a cutoff in new supply and no more ipos and they put in much tougher margin rules that have accelerated the selling in their market which are ive got to tell you, theyve got many more retail people than ours. 90 is by individual chinese. The Chinese Government encouraged a lot of people to open accounts in this year and to the bet of our knowledge 15 million new accounts may have been opened and it doesnt matter i can make this look like shanghai too. Right around there. Those people, just like the people that came in in the dotcom period for january, february and march, theyre being smoked. So chinese stocks are in weak hand, but are the companies themselves weak . We dont really know. One big difference between this market and the nasdaq in 2000 is that the valuations for the nasdaq were pretty insane and many stocks selling for astronomical pricetoearnings ratios and selling at high levels with no earnings at all and remember when we priced them to their eyeballs . China, on the other hand represents real value if you trust the financials. The shanghai composite can be trading more easily after the decline. Do we trust the company . I dont like to recommend chinese stocks because i dont trust the reporting methods. Someone on twitter asked me if i wanted to be a buyer of china or is it a falling knife. Right now it feels like catching a hundred steinways. However, if the Chinese Government keeps providing stimulus, then china will slow but it wont fall apart. The chinese stock markets nowhere near as big as the chinese economy itself. Most markets are big are than their economy. Ill put this here i dont see systemic risk, at least not right now and its not reassuring and its not when the New York Stock Exchange is halted and it did reopen with the last hour. Should we be more worried about china now that weve laid the whole case out . What if its not like the nasdaq which was hobbled back in 2 thousand nows and it was never important as the s p 500 and bounced back pretty fast. What if this was wow, get ready, really scary and the tokyo Stock Exchange through october of 2012. This is 40,000 okay . You know thats quite a run there, huh . The nikkei peaked in 1989 didnt bottom until 13 years later and im dismissing this one out of hand. Thats right because though china has bad issues it still has the ability to grow and japans index should never have been inflated that much anyway and the lack of growth. I think the more likely analogy is the 1987 crash in the United States. Look at this. This is very interesting. You can see, all right . The stock market plummeted and that was some day. Thank heaven i was in cash and did something right in this life, and the economy didnt take a serious hit and the market ultimately came back and we know that this is actually down 1200. Dont get me wrong, chinas economy will slow given the destruction of a new investing class that might have been buying homes and cars instead of stocks and it will hurt their government to get the economy growing from internal consumption, but how about our country . Tough call. I dont think we should be hammered too much from the downturn. When theyre talked about, they spread fear. I just want to see chinas crash talked about more hence why i watch the front page of the New York Times because its really really important to know that the Mainstream Press is all over the case. Thats how you get the worry ingrained and thats how you discount their woes and our woes. Ill have more on chinas impact later in the show. Just to circle back to europe for a second and thats a big reason why the markets rallied about a percent last night. Remember anything greece in greece out and its in limbo and you know how i feel about this and let me give you the most reassuring bottom line that i can offer. Find a stock of the Great American company you like and let the halts in new york and china i wonder what stocks was he looking at disciplined. With discipline comes conviction and use the decline to get a better price than you would normally get and when you get that, i dont want to hear oh no im really scared. I want you to pull the trigger. Lynn in california. Lynn . Jim, hi. Im stuck on Conoco Phillips and the sea drill. Oil prices are going down. What do i do . Ive been telling people from my Charitable Trust weve been saying look, heres the deal. Oil is going oil and we did a good piece, if it breaks 50. 51 it can go to 43 and that means the stocks are probably not done going down. I do not like deep water, seadrill. I say sell sell sell this is tone ney westlake village, california. Jim, in view of the market mess today at the nyse i want to ask you about two possible buy opportunities. First, i want to ask you about oracle. They had a bad quarter and they claimed they were having a cloudbased business at a rate that was faster than the sales force and they went out of their way to the sales force, and the sales force which i currently own continues to grow nicely and is on track to reach 6 billion in sale this year with the longterm goal of getting to ten, but their rate of growth has slowed quarter to quarter and the price is down significantly in the last two weeks and ive learned never to underest nate larrielson to catch oracle up with the latest technology. So, jim, should i buy sales force more or should i buy oracle . As between the two, i prefer to buy sales force. Im not that big fan of oracle and i am a fan of larry ellison. Hes done a great, remarkable job, but oracle did not have a good quarter and sales force had a blowout quarter. You know what . If i didnt own either one i would feel like i would be compelled to buy my first 25 of sales force. Com if i can get that stock below 68. Listen, i know its not easy out there. Its horrendous. I hated today, okay . But youve got me in your corner. I suggest finding the stock of a Great American company and get it at a price that it doesnt deserve to be trade trading at for you. Coming up on mad money, that may be obscuring an ominous sign. Dont miss my take and the opportunities are presenting themselves in the market. I have the ceo of alcoa fresh off of what was a pretty good earnings report. Stay with cramer dont miss a second of mad money, follow jimcramer on twitter. Have a question . Tweet cramer madtweets. Send jim an email to madmoney cnbc. Com or give us a call at 1800743cnbc. Miss something . Head to madmoney. Cnbc. Com. It took Tim Morehouse years to master the perfect lunge. But only one attempt to master depositing checks at chase atms. Technology designed for you. So you can easily master the way you bank. Here we go again. Weve been really good at assessing what the disturbing issues in europe could mean for our companys earnings. In fact many of our industrials have been trading down for weeks on end off of europe thanks to a combination of slowdown fears and a weak euro that makes the Companies Less competitive, but how about china now . If you have the gigantic decline in the chinese averages and theyre owned by Retail Investors and sometimes i see numbers as high as 90 and many of them borrowed right at the top. The most margin used in the history of the New York Stock Exchange and it will grow slower. The market has shot the usual suspects. Iron plummeted 16 in one week. A hideous move. We know that coppers been humbled and the commodities are simply a terrible place to be and thats because of china and it doesnt bode well for Companies Like cummins and joy global although theyve been punished plenty but they can go lower. The significant worry and the one thats impacted this market for the last 48 hours is the slowdown in consumption of americanmade products and lets start with autos. Our Auto Companies have made huge inroads in china and none better than General Motors and thats why that stock has just been destroyed. I thought that gms 4 yield could cost the small position because the stocks seemed undervalued and gm sliced 4 like a hot knife through bet butter and looked cheap how much the chinese have fallen and im kicking myself every minute about this one. Mcdonalds, yum brand, starbucks, nike and theyre all big franchises in china and only nike thought enough that consumption might slow and even if yums stop and china represents half its business. Yum has been doing much better than china of late and no reason to panic although people are and nor is there a reason to worry all that much about nike and those sales dont include since the big rollover and the Chinese Market got started and hey, you know what . A little bit . Why not . Which leaves the biggest potential victim. Apple. Chinas been one of the brightest spots in the apple galaxy where it sold 16 billion worth of equipment in the First Quarter and thats up an astounding 70 year over year and the expanding chinese middle class loving apple products and particularly the iphone 6. Analysts expect the iphone 6 sales will surpass u. S. Sales handily and that might be in question with the crash and i use that term any time thats fallen to 3500 in more than a month. I dont use the crash term here. I never use it. Mostly about the chinese about slowing, and slowing watt sales. I dont know. I guess i have to buy 10,000 gold bands to get the analysts get cracking on it. Its not just apple that suffered. The Semiconductor Companies that make cell phone components, skyworks mxp semi, were all pretty much in freefall all day. China, i think these stocks will all be guilty until proven innocent and theyll be subject to the swings that many of you cant handle. Among these stocks an cell actually cheap, 13 times earnings and you can argue its cheap because of the chinese exposure. I like to own highquality stocks and apple is one of them but at least you know why these tech stocks are under pressure and you may not have figured it out. I wish i could offer more solace. Thats not my job. China is an issue for all these companies and its not an issue, its still baked in yet or meaning discounted by the stocks and until it is until people recognize the damage to the commodities and the chinese sales that might be occurring, you can expect more days like today for every single one of the stocks they just mentioned. Hey, why dont we take a call from gerald in florida. Gerald . First, thanks for all the years of advice and most important, Market Wisdom you have imparted to me. Well thank you. On a day like today, im thrilled to hear it, honestly because sometimes this business is tough and this 3 30 a. M. Weakup call and now i have to get up at 1 00 for china. When do i go to bed . Caller thanks jim. Heres my question on top of all of the other things going on, what can happen to my stocks bonds and savings account . Should the imf decide to add the chinese yuan to the worlds reserve currency list on october 20th . I dont think you will actually be impacted . As a matter of fact, the main thing you have to worry about with our stocks and bonds is sellers from other countries who actually need to raise capital. The chinese, maybe they have to sell their bonds. Theyve got a trillion dollars worth and maybe they need to prop up their markets by selling treasurys and otherwise were the strongest market in the world. Ill keep saying that you know why . Because its true. No way around it china is an issue and its not baked into prices just yet and expect days like today with plenty of american stocks. Still ahead on mad money, the future is looking bleak for one market and its not one portfolio that will shock you and the ceo that kicked off earnings season and find out what it means for the rest of the market and its not negative. Remember, its buy low and sell high and the market would give you an opportunity with one blockbuster stock and ill reveal it next and why dont you stay with cramer . Want bladder leak underwear that moves like you do . Try always discreet underwear and move, groove, wiggle giggle, swerve, curve. Lift, shift, ride, glide hit your stride. Only always discreet underwear has soft dual leak guard barriers to help stop leaks where they happen most and a discreet fit that hugs your curves you barely feel it. Always discreet underwear so bladder leaks can feel like no big deal. Because hey, pee happens. Get your free pair and valuable coupons at always discreet. Com jarring day. Totally jarring. We had to shut down the New York Stock Exchange. There were many other changes that picked up the slack nothing makes you more uncertain about the Stock Holdings than the system where they were initially purchased failed to work. It was such an unfortunate anomaly for the New York Stock Exchange which i can tell you having been involved with it since the 1980s and working there every day for the last three years is a tote low topnotch place in every way. When the computers broke down its not conspiracy theorists overwhelm me and two totally isolated incidences could really be happening on the same morning unless they arent isolated. Although no one disagreed with tom harley when he said in a classic understatement, it wasnt a good day. If it were just for the trading halt which mercifully ended at 3 11 we would have had a not so hot day anyway. Europes seemed sanguine in the wake of a greek economy. Im worried big. The china implosion finally hit home. Undeniable. The chinese economy will slow and thats all from the place where we expect to see a turn and it might have been turned down. Europe stalled and china had it done and those arent good. Not good for earnings and you know me though. Ive got a bull market somewhere and excuse me for thinking anyone positive when gloom ruled the day and punctuated by moments of fear from unseen hands that might play havoc with the machines anywhere. Did you notice what wasnt talked about . A fed rate hike. Whats what. Think about the discourse two weeks ago, when will the fed raise and will the fed come out at the end of july and we were in an all systems go economy and thats what dominated the chatter and it was all about how fast how high . One look at the screens and all i can say is wait a second and china is in fullon crash mode . You want to tighten when we might be choppered in to greece . You want to raise rates when copper is down more than i ever thought possible in the last seven days, grains going lower and chinese is will issing everything that isnt nailed down signals another deflation. Most important do you want to raise rates causing the dollar to soar with a Late Comeback of our economy . I dont think so. You know what happens when you put the fed on hold . Ill tell you happens. Many stocks are breaking down you get buyers scooping up the stocks that offer good yield and youre back in the great search for yield. When the fed is on hold we saw buyers of all sorts of bond market equivalent stocks and utilities and packaged goods. We saw a remarkable turn in the latter group of todays session and you saw a minor rollback of the likes of kimberlyclark be and pepsico which reports tomorrow morning. Now we know with the computers down for much of the day on the exchange and the looming declines and so many expect to continue in china, it was a tough day to follow up more falling and after wave after wave of Standard Poors washed over the market and lets be up front about something with commodities declining and rates falling some of the stocks will be okay. Restaurants, retail utilities and Real Estate Investment trust. They wont be hurt by china and europe and i like the consumer goods after i get the quarters. So lets go over the setups and the dollar is stabilizing today because the resolution in europe is on hold and no cessation to speak of except for exports and you have interrelated markets for the fed to take action which warned for the fed not to raise rates. You know i havent liked the setup for ages. I still dont, however i could argue that the rotation into domestics and yield plays which took a breather today was no more than just a breather. I think you should start using this downturn to buy the stocks of High Quality Companies that you like at your prices. I do like that setup. Were in a volatile market where youre getting a chance to do that. Yesterday, for example, everyone was hot to trot to own disney. Alltime high. Today the stocks start sinking and shanghai reopens next year and byebye disney. I think you should be pondering and maybe ill be given a chance to buy disney at 4 or 5 from the high because of the shortterm china issue. That happens, pull the trigger. Isnt that what investing is really all about . Say youre too worried about shanghai and disney and all about those redhot retailers and maybe you buy crowing or the way down and costco a little bit of asia here. My bottom line let me ask you when the stocks of the highquality Companies Come down do you look the other way or do you buy . I think you know what i would do. Youre getting the fed out of the picture and that is positive. Its not unreasonable to sell stocks of highquality companies because of worries imported by foreign lands that, get this, may not even matter six months from now. Charlotte in maryland charlotte . Yes, jim. Love your show. Thank you. I want you to know ive owned Emc Corporation since moses was a recruit, and i want to know should i sell it . Hold it or what . Emc, not a fan. I know theres value there, but i have to tell you the technology portion of this market, i just dont like it that much and emc is part of the group that i dont like. These stocks, they feel broken. Remember you wait for opportunities like this. Opportunities to buy highquality stocks with Companies Like good earnings and dont turn your back on them as they come down and dont buy them all at once. We know thats a mistake. Stay tuned and earnings season is kicked off and my exclusive with the ceo of alcoa is coming up. Ive got some stuff to say. Coming up burnt out . The rail group rallied in the first half of the year but has since fallen off the tracks. Does red in the rail sector means its time to depart or should you give them more room to ride it out . Cramer is on the case. Jim cramer youre one of my heroes. I look forward to your show every week night. I thank you so much for helping beginning investors like me. When you talk about the market, i just believe that youre spot on. Oh i love it. Thank you so much. Every night we watch you. I have learned and earned. When youre not confident your companys data is secure the possibility of a breach can quickly become the only thing you think about. Thats where at t can help. At at t we monitor our Network Traffic so we can see things others cant. Mitigating risks across your business. Leaving you free to focus on what matters most. All aboard on anning leigh day like today a lot of things went awry and probably still going to go awry but i have to address something thats a long standing problem. I have to talk about the railroads. A major component of the transports, or as i tell you is one of the most important sectors, specifically i have to figure out what the heck is wrong with the rails. Any way you slice it this has been a tough year for the publicly traded railroads and csx down 12 Norfolk Southern down and Kansas City Southern down 12 and most were trading at alltime highs since last november with the Group Leading the market lower yet again as part of todays chinadriven slo selloff. Some of the big of the cargos have been plummeting in volume especially coal which seems to be a longterm secular decline and also crude oil which is now too cheap to ship them by rail in many chases and even agriculture and west coast slowdown did not unpack these issueses and help you understand why owning a railroad has been such a bad bet and why i dont think that will change any time soon. And we know Coal Production has been steadily fallen year after year after year in the u. S. And the decline had been gradual and Coal Production fallen by 2. 5 per year. Coal was bad, but it wasnt so bad that it would wreck the earnings of the rails that shipped the stuff, but since 2015 began, the decline in Coal Production has sharpened dramatically. According to the Energy Information administration Coal Production has dropped 8. 8 year to date and thats three years worth of decline packed into six months. Why is that a problem for the rails . Much less coal being produced and much less coal cargos for the rails and it is the only way to ship the darn stuff and its not just that were extracting less coal from the growth fund. Weve also seen a pretty drastic decline in the number of operational coal mines and coalbased plant mines, 17 of them closed last year and 84 of them would have closed this year. Thats a 15 reduction to the number of destinations for coal to travel to. Another serious negative for the rails and thank you, epa and to add insult to injury and our countries are importing less coal. Coal imports are nonexistent and the end result is that the rails are exporting less coal to and from our ports. How much damage has this downswing in coal done to the rails . Union pacific coal down 14. 4 causing the companys total revenue to be down 1 instead of up slightly. What a delta. Kansas city southern is only 7. 6 coal and its a 27 decline in coal revenue in the First Quarter again, taking their overall sales from positive to negative. Norfolk southern is 17. 7 of the business and which translated into a 5 decline in revenues year over year and 21. 1 of the business which meant the companys overall revenue was flat and thats just the biggest problem in the industry take oil. Its never been as large as a business in coal but the decline over the past 12 months has been pretty ugly and this has hurt the top line of many of the rails and theyve been improving the bottom lines and last years collapse include a bit of a wash for the rails and now they have geez no. If oil goes below 50 its not going to be a wash. The other big headwind was the west coast slowdown and that should not be over and you can see the effect of the intermodal rail numbers and the big corrugated metal boxes that can be moved from container ships to trains and trucks and it was down an astonishing 5 . And csx down 5 and saw an increase and of course, with the ports of the west coast getting sorted out and on the other end, if we start to see fewer exports and that will hurt the intermodal business. Ag products are another major cargos for the rails and theyve been getting slammed. Ksu, ag and mineral down 7 phosphates and fertilizers are down 6 . Food and consumer revenue declined 2 . Fertilizers down 3 . If youre running a railroad coal is bad, ag is bad, where does that leave us . Given that coal has declined does that mean its price individual this weakness and that was an upgrade of Kansas City Southern yesterday. I dont think so. I disagree. On the one hand the west coast port slowdown its over. Intermodal business could get back to normal and however oil pulled back dramatically over the last week and pipe is the cheapest way to transport oil and definitely a negative Going Forward and what concerns me is coal. Coal is not coming back. Its a dying industry. Of all of the coal plants in this country, 94 of them were open before 1990 and by 2021 23 of those existing coal plans will be shut down because theyre so plants for the environment and the natural gas is cleaner and cheap and natural gas is entirely shipped by pipe which means the railroads could be permanently losinging a major chunk of the business. While theyve come down of late remember theyve declined from alltime highs and the fact is the whole group aside from Kansas City Southern is still trading above the median valuations over the past five years. I can make a strong argument that they can trade at historically average levels so let me give you the bottom line. For the moment we have to view the railroads as an industry thats in a secular decline along with coal that has 15 to 20 of rails and ill be watching the upcoming quarters during earnings season, but i believe the railroads have to come down lower and perhaps a good deal lower. These companies are all incredibly well run, but they can only do so much and be as strong as their cargos and right now thats not strong enough. You really want in . Union pacific and wait to see the quarter and here is the guide now, and i think they do and only then after we get the numbers slashing should you Even Union Pacific as an investment. Mad money kwot is after the break. Global narcotics markets getting more volatile. They have temporarily traded in all is imbomb bell ones and Additional Information will follow as soon as possible. Whatever the market throws at you next cramers got you back. What youio need to know before tomorrows trade on last minute mad. Verizon say neversettle. Tmobile agrees. Never settle for verizons overpriced gimmicks. Try the uncarrier riskfree for 14 days youll love it, or well pay for you to go back. Want bladder leak underwear that moves like you do . Try always discreet underwear and move, groove, wiggle giggle, swerve, curve. Lift, shift, ride, glide hit your stride. Only always discreet underwear has soft dual leak guard barriers to help stop leaks where they happen most and a discreet fit that hugs your curves you barely feel it. Always discreet underwear so bladder leaks can feel like no big deal. Because hey, pee happens. Get your free pair and valuable coupons at always discreet. Com it is time it is time for the lightning round on cramers mad money. Rapidfire calls [ indiscernible ] play until we hear this sound and are you ready, skeedaddy . Its time for the lightning round and start with cline. Hi big guy. How about you, partner . I lover you, you, and i have one question and i know theyre going to cut me off. Broadcom, i own it forever. Youve won, man you just got the takeover bid. Congratulations. Lets move on. Adam in iowa. Adam . Adam hi jim. Whats up . Okay. I recently bought into a company with the yearoveryear earnings of 160 . Yet its pe is sitting around 15. Its still 22 off its highs and what do you think it 8 match . Its an acquiring Pharmaceutical Company and those stocks are all being hit right now and if you have to wait three or four days in the decline. I agree with you, fastgrowing and filling the right stuff. Phil in new jersey phil . Im calling in regard to First Republic bank and the company, stocks are going backward, and im thinking of buying more of it and should i buy, sell or hold this for the long term . First republic. Im not recommending bank stocks that are up right now because the yield curve is not where they want to be. You have to wait until after the quarter. Lets go to ross in new york. Booyah, jim now youre talking. Im calling from new york. How are you doing . All right. How about you . Excellent. I want to know about footlocker. This is the stock i pray for a decline because it is doing incredibley well. This is the kind of stock when it goes down im going to say its got to come down first. Lets go to derek in alabama. Derek largely involved in drones and robots and power controller and chip manufacturer ixys. I know. Youre absolutely right and manufacturing chips and the chip industry is coming down pretty hard and i like am ryllo, but i see that one getting hammered. I would be careful. This market does not like semiconductors. Lets go to suzette in florida. Hi, jim. This is a bucket list booyah from lakeland florida. On your way. I love your broadcast, your brains and your books. Whats on the horizon for verizon . Verizon yields is 4 point. 75 and the stocks that dont have earnings risk they are okay to buy because Interest Rates are going down. I will bless verizon if it hits 45. Lets go to jake in new york. Jake . Hey, jim, a big booyah from albany, new york. What are your thoughts on American Airlines . Imf im worried about the airlines except for delta. We need to see delta report and we need to see numbers get cut and only then can you buy these stocks. Remember, amr does have a problem with integration that could happen because theyre putting together those two together. Us air and amr. It does make me a little bit nervous, tim in north carolina. Tim . Jim, thank you for what you do. Youre quite welcome. Im a retired baby boomer. I want to know about caterpillar. Too high. Its still too high. No this ones got to go back to its 52week low. Its got to go back to 78 before i touch it because its got a 3. 75 yield caterpillar and that is just not high enough to be able to save it, and that ladies and gentlemen, is the conclusion of the lightning round the lightning round is sponsored by td ameritrade. Ll the time. Sup jj . Working hard . Working 24 7 on mobile trader, rated 1 trading app in the app store. It lets you trade stocks options, futures. Even advanced orders. And it offers more charts than a lot of the other competitors do in desktop. You work so late. I guess you dont see your family very much . I see them all the time. Did you finish your derivative pricing model, honey . For all the confidence you need. Td ameritrade. You got this. Everyone almost got lost in the shuffle and earnings season kicked off after the close with alcoa, the aluminum maker that gives you terrific insight to anything related to air, trucks packaging and heavy industrial machinery. I like alcoa long term because the ceo has been transforming this company into a manufacturer of high valueadded aluminum product, but that doesnt make it immune for the worlds economies and theres also an acquisition thats putting immense arbitrage pressure the stock causing it to tumble 34 year to date including a nasty 56 cents or a 5 decline in todays session and while the earnings 19 cents a share excluding special items missed wall streets estimates by 3 or 4 cents and nonetheless, the company did deliver respectable revenues and lets check in with charles kleinfeld. Welcome back to mad money. Hello, jim. You had a crazy day, and the market was down 7 . We were very worried about greece and worried about what could play out this weekend, but the company that i see alcoa thats in front of me is moving to be labored to Big Industries that are in america that are doing well and im talking about construction doing very well aerospace doing very well and cars and trucks doing very well and the alcoa of 2015 and 2016 will be more american than chinese. Should i be less worried about china after i read this quarter than before . Yeah. Thats exactly right, and we are working on it tirelessly and you see it reflected in this quarter. You see the outperformance on the value add. The highest quarterly performance on the products and solution business. Nice profits in growth in the midstream business and the integration of the acquisition going well and on the commodity side where obviously these types of macroevents matter and on the increase on the commodity side you see nice resilience on the headwinds and the aluminum business in the first better than the first half of 2007 and the primary business was resilient in spite of 20 , and then you see a nice productivity and you see good good cash flow, right . So thats what youre seeing and i agree with you. Were moving along the line of what ive always talked about the transformation of alcoa andmore value add and becoming a lightweight metals expert while we are increasing the compiveness of the commodity business. Were in the final lengths of the rti acquisition. I know you talk about 2017 accretive gain but what i need to know is say youre using 2014 revenue mix and aerospace is 51. When you close rti could aerospace, which is regarded even i know you had to downgrade it by a percent, but aerospace is still in the major secular growth mode. What percentage of alcoa at this Time Next Year will be aerospace . Thats hard to judge, jim, because youve seen where weve come from. With the rti well have as a performer of 5. 6 billion of Aerospace Revenues right . But obviously this will grow much, much more given on what we have in store from the organic growth side and dont just focus on the acquisitions and thats a good thing for us on the jet engine side and on titanium and now rti if all goes well which i assume and thats all good but its a nice market. It continues to grow and we saw it again and we saw it at the air show next year and were projecting 8 to 9 growth and in the next years its also nicely growing, but its not the only business and thats actually very important because i dont really would like to stand just on one leg. I mean look at what weve done in the automotive business and we continue to change the automotive business with the microtechnology which weve not commercially brought into the mix, but we put it out there and then you look at the other things, gas turbines coming back and Building Construction in the u. S. Coming back and the it has been more important and a lot of the investments that weve done have gone into the u. S. And partially into europe because thats really where the music is in those types of developed businesses. Youre of the ceos i know you know more about china than any i know so ill ask you both on the oneonone business you do have the production down 34 in heavy duty truck and there are some reasons why theres a strong pullahead demand from 2014. Yes. Youve also been to china. Im wondering whether the changes that are in china which is theyre trying to make it more demand oriented from the consumer point of view. Are these things that do they really matter to a company like alcoa . Well at this point in time they matter less than they did before. I mean before when we were primarily a Commodity Company and in the commodity space, every news out there influences the Commodity Prices and its less so about supply and demand and theres a lot of noise going into it and supply and demand is a longer term determined of the pricing. So youre right. It matters less and at the same time china for us is becoming, in my view potentially a very interesting market for value add products at one point in time. The presence that we as alcoa have in china is not in the upstream side and it is in the value side because china is moving more to value it and they need more value and product, so we want to participate from that move and we have already positioned ourselves in that way. So today we already have aerospace, Automotive Components in china that we manufacture in china and that we can use for the Chinese Industries to ramp up as well as lowcost opportunities for those kind of standard components to basically continue to be competitive and also on that end. One last question. This is the first time that ive seen you give a downtick in aerospace. Is that meaningful or is that just because of the way deliveries are . No thats actually more technical thing. What happened is there are two new platforms and 320 and the sirius and unfortunately, they havent been ramping up and its more an issue of the supply chain and they havent been ramping up through the first half as expected. So technically this moves into 2016 and 2017 so what weve done, weve taken one percentage point down in growth for this year, but we substantially ramped up the 2016 and 17 because in reality the numbers that you see there are higher than expected and its technically were moving over there and frankly, 8 to 9 compared to 9 to 10 and nine years with the backlog and 125 billion orders during the paris show and signed by the chinese right after this and both are the numbers even higher than last year at 116 billion, those are the numbers. Im hoping for the arbitrage pressure when rti closes and klaus kleinfeld, good to see you, sir. Wonderful. The stocks have been pushed down heavily by arbitrage pressure . It is a better alcoa. Mad money is back. It feels like i havent had the set up for ages because of europe and now because of china. We need more people worried about china before im going to feel more confident and the chieritiable trust highest cash position in a long time and put a little bit of money and cant get excited about it. The setup is still not great. Theres always a bull market somewhere and i promise to find it for you right here on mad money. Im jim cramer and ill see you tomorrow lemonis tonight on the profit. Miranda the lip gloss is a healing lip gloss. Woman its so smooth. Lemonis . A cosmetic company that uses a special ingredient. Miranda this is my original formula, and its got medicalgrade lanolin. Lemonis its a big idea with huge potential. Miranda and the companys grown from on my stove to a little over 3 million this year. Lemonis im impressed. But the owners wont stop developing new products. What is this . Miranda those are lightup tweezers. Lemonis products that no one wants. Layne these right here are all the bottles i cant sell. Lemonis all the way back here . Layne yes, sir. Lemonis and their branding is completely chaotic. Interesting . Katia mnhmnh. Lemonis interesting . Katia no, thats weird. It just feels all over the place. Lemonis if i cant get them to follow my plan. I dont feel like youre trusting me. And develop a whole new look. Miranda i see ls. Lemonis i see something that looks like a swastika. Things could get very ugl