Behind us, we can go back to our regularly scheduled earnings. No, we cant. Ill give you explicit instructions about how to handle the stock, but overall the damage i expected from the too hot opening meaning an opening that was much hotter than i would have liked wasnt that threatening to the rest of the market. The average is worth much more in anticipation of alibabas open bug it wasnt that unhealthy. Not that much Collateral Damage given the deal speculation on the floor of the stock exchange. Which brings me to the game plan for next week because i think we can focus on events at hand and not just ipos. Although theres an intriguing now we take it for granted because credit is so hard to get and the average person cant take advantage of the low rates the trawl rich hedge funds managers cash in on. Id like to see the number that tells us the recent dip in ratespurred sales. We also hear from auto zone which has a history of selling off after it reports and almost instinctively rallying lazarus like the next day as people realize the old the cars on the road the more we need auto zone. I expect well hear it continues to buy back stock aggressively and thats amazing given that auto zone is among the most voracious crunchers of its share count. In other words, by the dip. After the close on monday we get the results. Heres a chain thats been putting up disappointing numbers. I expect cnet stop like kohls. I wonder if this quarter wont show the same upside surprise we used to get all the time. If so, its a buy just like kohls, tjx turned out to be. Companies can also benefit from the huge dedplien the cost of cotton which has been a boon. How about bed, bath and beyond . That reports tuesday. Its a place i like shopping even has azt Company Ended in the culdesac of heart break. And get rich carefully, i detail about how the coportfolio manager of my actionalertspl actionalertsplus. Com bought this for my Charitable Trust. Didnt rally back but we gave up on it. Here we go again. I expect nothing good from Bed Bath Beyond although theres chatter it might attract equity money because its gotten too darn cheap to stay public but i think the private equity guys feel theyre too easily hurt by amazon so i think the stock will most likely continue to twist in the wind even as i spend a fortune at one of its divisions. Z sometimes stocks signal changes before that happens. I think that will map with carnival cruise. The stocks have been going up quietly the rest of the players in the cruise sector, as if the tragedies are finally being left behind it. If we get a decent number, i have to tell you, its not done climbing. It can go higher, much higher. I also expect to hear about the pricing of the Citizens Financial Group ipo, philadelphians know the bank, thats citizens financial. This is being spun off from the world bank of scott land. Banks have been red hot and while this is no ali ban baah be ill give you the parameters for it. Wednesdays chock full of earnings. I like to get the skinny from pay chex but the stock has been flat lining, thats because i believe Small Business formation has taken another step down, perhaps because were coming closer and closer to the penalties of the Affordable Care act and thats making it much more difficult than what your payroll should be. Alsoing a censure. This is a stock thats had a history of disappointing. Yet it finds itself trading above where it was by the time the next someone recorded. This is a classic dip bought equity. Thursday we get nike. Once again, remember, we here in a red hot bull market from what i can tell. Weve heard from Companies Running shoe lines delivering smoking results. We know underarmor put up great footwear number. The only problem is that nike stop has run up too much because of how great decker is doing and how great underarmor is doing. Micron also report there iss a real tugofwar going on with micron that doesnt involve demand, which is robust. It involves supply. Mainly a potential for too much supply from korea where the two other companies that make the same semiconductor are located. I havent liked the action of micron of late. Finally friday, blackberry. I think company is in a longterm decline accentuated by that new apple iphone. I would be very careful about speculating blackberry because its been inching up too much for my liking. I know many of you cant resois if you feel compelled to own this thing, ring the register if the number seems strong because i expect analysts will distance themselves from the stock. Heres the bottom line, its back to business as usual with alibaba behind us. We survived it and wednesdays fed meeting without much damage and i think barring any more geopolitical catastrophes that we can be in for decent sailing from here until the real earnings season begins a fort night from now. Lets go to irwin in my home state of new jersey. Irwin . Caller how are you, jim . Im good. How are you . Caller my question to you is in the not too distant pass remember some third world country that said the price of gold would spike 20 to 30 an ounce. Ive had groeld the 1800s and now the world is in turmoil and the price of gold has dropped down to 1200 level. Is the play on gld done . I dont think it is. Im telling people you can have up to 10 of your none gold. My retirement money is like that. Dont expect the insurance of gold to make you money any more than the insurance right now of your auto or house but thats all we have it for is insurance. John in arizona. John . Caller jim, thank you for hosting such a great show. Thank you. Caller my question for you today is about aflac, symbol afl. Its near its 52week low and i wanted to get your thoughts about that. Im not crazy. It doesnt have earnings momentum. It yields 2. 5 , if it yielded 3 id take a shot. I think travelers and hartford is better and i know aig is better and that stock was down after the resignation of a key person. Were pitching to buy more. Were back to business. I think we could be in for decent sales until the real earnings season begins. From printers to paper clips, staples has you cover bud it could use Nuclear Weapon the growth department. Ill tell you how it can pinch a deal. Then alibabas record breaking ipo made a former english teacher one of the richest men on the planet. What can the stock do for you . Plus pier 1 is taking a beating after another weak quarter. I kell can ask the ceo if ther any hope for a comeback. Theyre custom made trains. You cant get any better than that. Siemens trains are not your grandparents technology. Theyre something thats gonna change the cities we live in today. I find it so fascinating how many people ride this and go to work every single day. Im one of the lucky guys. I get to play with trains. People say, wow, we still build that in the United States . And we say, yeah, we do for over 60,000 extra curricular activities help provide a sense of identity and a path to success. Joining the soccer team. Getting help with math. Going to prom. I want to learn to swim. Its hard to feel normal, when you cant do the normal things. To help, sleep train is collecting donations for the extra activities that, for most kids, are a normal part of growing up. Not everyone can be a foster parent. But anyone can help a foster child. Theres one thing that can keep stocks heading higher. Recordless of the pessimists out there who keep saying this red hot yaibl deal is signaling a top, im talking about consolidation, especially in sectors like retail where theres too many competitors and stores unlike china where alibaba thrives so the whole industry could benefit from taking a few players out of the equation. A couple weeks ago i suggested a massive merge saying gene see should buy vitamin shopp, an idea i stole from the deed of retail analysts at credit suisse. Sure enough, yesterday we started hearing rumors that gnc is exploring Strategic Options and vitamin shops shareholders are pushing for a sale, hence why both stocks rallied nicely. Although i bet the move is far from finished if theres any truth to the chatter. I think where there is smoke there is fire. Buy, buy, buy. In an increasing omni channel world where the biggest competition comes from the web, there are huge benefits from consolidating the bricksandmortar side of the business and the market recognizes these benefits instantly. If you look at mergers in hard line retail space, the stock of the acquirers average rallied 40 . Thats dramatically up from the s p 500 from the same time. No wonder theres so many mergers and acquisitions and thats why tonight i want to propose another retail merger. Once again borrowing an grd the great gary balter who is singing this is the end about sears and that seems to be resonating from the plunging stock of that company. He thinks its time to consider some consolidation among the Office Supply retailers and i agree. I think that staples, which has been a real dog lately, down 18 year to date, should buy office depot. Now, gary laid out his thesis for why this deal makes sense last month but since then the conversation, its fizzled. Ive taken some time to stud think analysis and after deep review i have to say a merger would be the best thing that could happen to staples and office depot. The synergies would be enormous and the combined company would be stronger than either player on its own. It makes a ton of sense both for the companies and especially shareholders. How do i know that . The n part because two years ago office depot announced it would require office max. Term time people said it was too drunken sailors trying to hold each other up. Wrong. This is the number two and three players in the Office Industry combining to form one larger competitor. The results of the deal . Theyve been fantastic. Office depot stock has doubled since the deal was announced. A double in two years, not too shabby. Just as important, by closing overlapping stores, shrinking their sales force and slashing corporate overhead, Office Depots acquisition of office max created 700 million in synergies. That was astounding. In fact, the synergies from this merger were more than six times greater than the combined earnings of the two chains before the deal. They were killing each other gigantic. Buy office max and then aggressively cutting stores and Closing Costs made office depot more money than they could have generated on their own. So given how well theyve done since acquiring office max, it makes sense for staples to turn around and snap up office depot. Especially since staples seems to be really struggling on its own right now. All right, so now i can hear you. Many of you are saying hold up, cramer, theres no way the government would ever let this deal happen. I mean, staples tried to buy office depot before and the federal trade commission shot them down in 1997 to which i say a lots changed since 1997. Dont take my word for it, heres how the ftc put it when they blast Office Depots acquisition of office max. The market for the sale of Consumable Office supplies has changed significantly due to proliferation of mass merchants and club snores the explosive growth of online commerce. The evidence of anticompetitive effects that caused the ftc concern in 1997 was simply absent in 2013. Translation with all the competition for the likes of target, walmart and costco not to mention amazon, all of which have gotten into this business in a major way, there was nothing anticompetitive about office depot buying office max and i think the similar logic applies to stay ps buying office depot. So assuming regulators allow the transaction to happen, how good would bit for staples and office depot to combine . They are both already out there Closing Stores aggressively. Staples has more than the 2,100 locations. What were they doing . Earlier they announced plans to shut down 225 of them in north america, including the one two blocks from me which i have to tell you was almost always empty. Heres what i thought of every time i went in there. It was a bowling alley. And back in may, office depot told us theyre planning to close at least 400 stores in the wake of office maxs transaction a little more than ten months ago. Both companies have embraced a shrinkingtogrow strategy. Office depot is expecting 100 million in synergies from their store closures. But if staples were to acquire office depot, i bet they could make even more money per store closure. Because theres much moror lap between the two chains. How much . In addition to the locations theyre particular planning to shut down, a combined staples and office depot could close another thousand stores. Thats 300 million in synergies, or 300,000 per store. We have so many more we need. When you throw in that corporate overhead that could be cut, the consolidation of the two sales forces and the increased purchasing power of a larger chain, i think buying office depot could lead to over 1 billion in total synergies for staples. That could be conservative. Can you imagine how high stock would go . Instantly it would go. Instantly. What would it mean for profits . A billion dollars in synergies would represent a 50 increase for the earnings for interest access depreciation am orization in 2015 which would translate into 110 boost per share. Buying office depot would let staple doubles its earning power. No wonder gary thinks they could pay an 80 premium and still make a killing. Heres the bottom line, the numbers speak for themselves. If staples wants to turn things around in the midst of a challenge environment, if staples wants to nick its stock off by 50 , the easiest and smartest try do that is by acquiring office depot. I think the deal would be a win for both companies and more important a win for the shareholders. If staples drags its feet, i wouldnt be surprised if an activist or two forces the issue. It just makes too much sense not to happen. Larry in massachusetts. Larry. Caller jim, sincere compliments to you, david, and carl this morning on your respectful, efficient, and probing interview of jack mott. Sometimes in life youre fortunate to be a journalist. How can i help . Caller his plan to help money to help young people succeed reminds me of bill gates and warren buffett. Major kudos to you. To a favorite other subject of yours, beer. With asb miller unsuccessfully approaching the heineken family monday, theres been speculation about other possible spiritual consolidation. The growth is slowing by almost half and various others tap are being suggested as either buyers or sellers. Monday on half time i expected stephanie to at least mention cramer fave constellation. Is it getting lost in the shuffle . I think that a whats happened is people feel that if molson coors were able to buy miller, it forces the sale of miller that would make it so molson coors is a better performer than constellation. If youre just looking at earnings, constellation is a better play. Basically what im saying is constellation is probably two down and seven up. I like that, but people think coors can be gigantic. Merger mania, listen. Sometimes consolidation fixes things. If staples were to turn itself around i wouldnt be surprised if an activist comes in. Much more matt money ahead including what could be the hidden secret behind alibabas success. Then pier 1 missed the quarter. Can the ceo rite the ship . Ill find out in my exclusive. Plus, big tech news that has nothing to do with apple. Stick with cramer. If energy could come from anything . Or if power could go anywhere . Or if light could seek out the dark . What would happen if that happens . Anything. In a we believe outshining the competition tomorrow quires challenging your Business Inside and out today. At cognizant, we help forwardlooking Companies Run better and run different to give your customers every reason to keep looking for you. So if youre ready to see opportunities and see them through, we say lets get to work. Because the future belongs to those who challenge the present. My Immediate Reaction this morning when i met jack, the man who built alibaba which just became public today into what may be the most lucrative fast growing company. Not just z not just the ecommerce. I figured alibabas stock would be red too hot and thats what happened with its opening, a huge gap up from its 68 pricing. And i thought it would sour the whole fair with excessive exuberance. I know it would meaning deals like facebook which dishearten investors or the dotbombs from 1999 and 2,000 that ended in such heart break. I wanted to point out that you could argue alibabas valuation is too high. You know what . A few minutes into the conversation of the new york stock exchange, i found myself quite taken by this mildmannered 50yearold gentleman. Frank frankly, his humility aastounded me and not just because overnight hes become the richest man in the peoples republic of china, yet he acted as if he were one of the gang of hundreds of thousands of teammates with whom he works. It was when i asked him who his here rewas who he aspired to be he positively took my breath away when he answered. The hero i had was forrest gump. 14 years ago you know hes a fictional character, though. I liked that guy for coming to new york. Because i watched the movie again telling me that that a few years ago i couldnt earn that. Theres more too lifetime than anyone in history but he carried himself like the humblest man on earth. What a perfect man this fellow just might be when he pulled out a present for us in neatly ribbon tied golden box. All i could think was he was about to pass it the candy box from forrest gump because for ma life is just a box of chocolates, i wasnt disappointed that the box contained a alibaba tshirt, but the chocolates would have been a fitting gesture after the revelation of his true gold model. Wow. Forrest gump as your role model. Ive read the coverage and i regard much of despairive the. Theres mugness basically suggesting the companys ipo could represent the key dmard the house of cards that is the stock market. Im bracing myself in the stories that say it marks the beginning of the end, another dotcom bomb from china, i know the cynics wont be able to resist the story line of the ipo, how can they not . I mean, put it this way, whos going to remember that you called the top of f the marquee goes higher. No one, free pass. But you can be the sage of wall street for years if you say that the largest ipo of all time was the death nell for the bull and you turn out to be right. Hey, i wasnt happy with the deal, i was hoping the stock would open ten points lower, you watch the show, ten