Jim Cramer looks at what lead Walmart to record highs today

My mission is simple, to make you money. I'm here to level the playing field for all investors. There's always a homework at Summer, and I promise to help you find it. Mad Money starts now. I'm Kramer. Welcome to Mad Money. Welcome to Kramerica. Other people make friends. I'm just trying to make you a little money. My job, not just to entertain, but to educate. I got to put this all in perspective because it's that crazy right now. So call me 1-800-733-CBC. Greetings, I'm Kramer. No one wants to say, hey, the market's down because Vladimir Putin might defend himself with nuclear weapons now that Ukraine's firing long-range missiles to Russia. But let's do some buying anyway. If something dreadful happens, oh, you might look like a genius for two seconds today, until we all start worrying about the prospect of World War III and total nuclear annihilation. If you make that warning and nothing happens, well, you know what? At least for the moment, you get what happened today. With the Dow dipping 121 points, and the Nasdaq gaining 1.04%. As traders shorted the market in the morning, betting on Putin following through with his nuclear threat, but then ended up covering or buying back their shorts when nothing happened. Explosion. When you get something as worrisome as nuclear threat, investors turn cautious. And what do they do? They buy Treasuries, U.S. government paper. It's known as a flight to quality. We've had a bad bond market of late with rates going up. And this Russian new concern changed the direction of bonds as these flight to quality buyers drove bonds up and interest rates lower. The fast traders out there know that when long rates go up, what do you do? You're supposed to buy tech. You know, it doesn't even matter if those rates are going down because people are reaching for Treasuries, that's a flight to quality, or because inflation is cooling or the Fed's about these. It doesn't matter. As long as bond prices rally and bond yields go down, it's axiomatic. No, it's automatic that you're going to buy tech. And that's what happened today. It was terrific to take a break from the endless reaction of President-elect Trump. Even if we instead are worrying about what President Putin will do. Oh, and next time nukes are threatened and you see a flight to quality, remember this. The highest quality is the Magnificent Seven because we know six of them are doing well. We just got the reports. It's the seventh, NVIDIA. It was the most quizzical. We don't get numbers until tomorrow. People are unwilling to wait to see until after the close. I mean, to me, that's just plain strange. We will find out how smart or dumb they are tomorrow at this point. But I'm consistent. NVIDIA, own it, don't trade it. Now, it wasn't just big tech, though, that recovered nicely from that hideous sea of red opening. There's a stock, a stock that captured the entire zeitgeist of the moment today. And that stock is not Microsoft or Alphabet or Apple or even, heaven forbid, Tesla. No, that stock was the most prosaic of all stocks. Walmart. Now, this company had a stupendous quarter, one of the best I've ever seen. The secret? Is it the tremendous growth in e-commerce? Oh, that helps. Is it turn in advertising and e-commerce? Whoa, is that ever lucrative? And it is inflecting positively. As advertisers begin to see, there's a terrific return on investment by advertising with Walmart on their e-commerce site. No, though. The real reason Walmart roared is that the company has rolled back prices on 6,000 items, including 3,000 in grocery. And they've converted nearly 2,000 price rollbacks over the past year into long-term price reductions. Look, I'm not kidding. It sounds like it's hokum. It sounds like it makes us go there. You will actually see they have rolled back prices. Walmart's got more food that's high quality, under five bucks, than anybody I know. And it's packing them in. If you offer people good value in this environment, they will spend their hearts out. That's what they do. Only Amazon and Costco have the ability to bring down prices like a Costco, like a Walmart. Costco can do it because they have a club, though. It's just, it's too costly for almost every other retailer. Why is that? What happened to the luxury buyer? I think she's either gone, or at the very least, gone into hibernation. Households earning more than $100,000 made up 75% of Walmart's market share gains from the third quarter. That is simply extraordinary. North of 100,000. I've never seen anything like it. It did happen at Costco. It did happen. There's a lot of Beamers in the Costco lot. A lot of, you know, a ton of Mercedes. But if these people with six-figure incomes, they're supposed to, they can go to Costco. But they're not supposed to be shopping at Walmart. To be fair, though, I happen to love shopping at Walmart. I have three different Walmart locations that I go to, and they're all very special. They're all different. Prices are insanely low. The apparel styles are incredible and incredibly cheap. These Walmarts are so much better than the old Walmarts that it doesn't shock me too much. If, look, if I weren't a regular shopper at Walmart, I guess I would be astounded, too, that there are people who make North of 100,000 who go to Walmart. I'm not. Neither is my Parsons daughter. I mean, my literally educated design Parsons daughter likes to go to Walmart with me. But there's something going on underneath, something that's hurting every department store, every dollar store, every mall store, that's just, and it's just, there's not enough value. There just isn't. You just don't get it other than Walmart, at Costco, and Amazon. I don't want to go political here, but this is something I am also kind of miffed by. It's not mystified. I think that the Republicans sweep, forces you to analyze its impact on the market. I wouldn't do it if it was just like an MSN, but we're talking about politics. It's the impact on the market that I care about. To me, people are going to Walmart and Costco and Amazon because they can't really afford to go anywhere else. Yeah, they got priced out. Prices have just gone up too much. It's hard to extrapolate the price increases to the stocks because they were subtle and they took place over multiple years. But let's do this. Let's go over the numbers since 2019 before COVID because I think these not only fell to Democrats, they also explain why Walmart, Amazon, and Costco sales keep going up. Almost everyone else is disappointing and why you need to buy one, if not two, if not three of those stocks. Here they go. Since December 2019, motor vehicle maintenance and repair prices up 39%. Food away from home up 29%. Food at home up 27%. Housing up 26%. Admission to movies, theaters, and concerts up 21%. Household furnishings and operations up 20%. There it is. That's it. That's the economy. That's the simple reason why only the big three value-oriented retailers are thriving. There's just not enough money left after you spend it on this stuff. Sure, people, they pay for Netflix. They like Spotify. But they get that money by cutting the cord. They cancel their cable subscription. When they go out to eat, what do they order? They order the $11 offerings from Chili's and Texas Roadhouse, not more than that, because they know that represents value. When you look at the motor vehicle maintenance and repair number, you have to recognize that your auto insurance bill has to go higher too because it just costs more to repair. When you see housing up 26%, that means mortgage rates make it even more expensive, and we do not know how to make them cost less in this country. Cars have gone up huge in price, and we can only conclude that the car companies have lost control of their costs. They simply aren't in sync with what's happening. Maybe they just want to make more expensive cars, but they're not going to make more money. There's a reason why Carbon is up over 370% for the year. It's perceived to offer value with its used vehicles. It's incredible how much scale you need if you want to be able to give people lower prices. It doesn't feel like Lowe's or Home Depot will have been able to roll back the prices. Ford and GM can't do it. Lenar and Toll can't do it. But Walmart, lots of rollbacks in every aisle. Costco, nothing but rollbacks as they pressure name brand after name brand to lower prices or get the hell out of our stores. And Amazon, perhaps the best, or it wouldn't have 200 million Prime members. Is there anything more stark than the fact that the Democrats chose to attack Amazon when it is the greatest inflation fighter out there? It's so out of touch, it's painful. I do think Republicans have to be careful. Today, John David Rainey, Walmart CFO, said his company may have to raise prices because of pending tariffs. That would be a bitter pill for the American consumer. Now, I'm going over these increases from 2019 because I think they hold the key to so much of what's happening in the stock market. Unless you can demonstrably show that your prices have come down, which is quite obvious from any trip to Walmart or Costco or any perusal of any page at Amazon, particularly on an Amazon Prime special day, you won't be able to generate the kind of numbers that can send your stock higher. So let me give you the bottom line of a really important thesis that I am going to spend a lot of time on this year. When I talk to the retail execs I know, they're constantly asking me, is this a cyclical or a secular trend? Will we get over what happened with inflation or will it stay with us? To which I say, I don't know, beats me. I shop at Walmart and Amazon and Costco, so I don't even know what the heck you're talking about. Let's go to Jim in Florida, Jim. Give me chill, a big sunny Les Chateaux, Naples, Florida booyah to you. Well, man, that is one complicated booyah that I will agree with. How can I help you? I'd like to, first of all, thank you and your staff for all the years of help you've given me. My questions on CVS, buy, sell or hold. I've wanted to buy it for years, but I've held back. I know you had not recommended Walgreens and you kept me out of that and I appreciate that. This is a tough one. I think that David Joyner is doing a very good job. I happen to like to see the chairman too, Robert Farah. I do think that they have a lot of work to do. That's why it sells at only 10 times earnings. So what I'm gonna do is do something that we should only be doing playing bridge, but I'm going to take a pass and I'm going to do that because sometimes things are too hard and I'm not going to do that. This one is too hard and thank you and the staff thanks you. Let's go to John also in Florida, John. Mr. Kramer, buh-buh-booyah. I want you to know you always put me in a good mood. Your energy is unmatched, friend. Do my best, do my best. Got up at 3.30 today. Jim, the trainer comes over, beats the heck out of me and I say, hey, you know what? This is, I feel like I got the worst part of the hardest part of my day over with by 5.30. Let's go to work. Fantastic, unreal. My question is about Uber. That's probably one of my biggest holdings. At these prices, it seems like it's taking a hit and Tesla's affecting it somehow. Would you buy, sell, or hold? I would buy, sorry, and I would buy Uber periodically. You get these chances. It's really incredible when you get them. I can't believe it. We had it, you know, we had one in Cava. We have one in Sweetgreen. We have one in Reddit. They're so hard to come by. When you get them, you must move. You must pounce. Don't be scared. In this environment, if you're a retailer and you want to send your stock higher, you have to demonstrate that your prices have come down. Right now, we're seeing that only from Walmart, Costco, and Amazon. I made money tonight. Rockwell Automation gave some light guidance for the year ahead, but could the industrial be positioned, maybe, for a turnaround on the heels of some new partnership announcements, including Nvidia and Microsoft? I've got the CEO. Then, how could Trump-driven tariffs impact the tape ahead? I'm actually pulling off the history as part of what we just did at the top of the show, taking a look at what happened last time. And later, I'm checking in with a big one, to hear where the defense name stands in the current geopolitical landscape. Remember, they're a drone company, and they just bought something that can be anti-drone. Soup to nuts. Stay with Kramer.