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Jim Cramer joins me on the floor of the NYSE. I'm Katherine Ross with The Street. All right, Jim. You just sat down with Larry Kudlow ...


... to talk GDP numbers.


What's going on?

Geeze. First of all, Larry was my partner for three and a half years at CNBC on a show called Kudlow & Cramer. Larry is very good economist. I think people don't understand he was an economist for Reagan and the Federal Reserve, so this is not a talking head. He's talking about all the good ways that the GDP is actually going higher and how it can continue to go higher. Now he talks about the policies. I know that for people who hate Trump and watch the Michael Cohen hearings and said, "Well, this is exactly what I thought about Trump, that he's bad," forget whether the Democrats overplayed ... They have to listen. See, because it's not like Larry is saying, he's cheerleading. I've seen Larry say, when the economy is not so good, he'll say it's down in the dumps. Now he's a preternaturally gentlemen ... He's bullish. He's sanguine around the clock. Okay? But what he does is he gives you the right breakdown.

He said, "It's amazing. Dividends are still good. Capital gains are still good." He corrected me.

I said, "We should tell people about how it's not just the money is going to capital gains and dividends. It's also being spent."

He said, "Listen, Jimmy, the truth is I like dividends." He knows I campaigned for the dividend tax to come down. We all thought we had something to do with it. Now I think it actually needs to go up because I'm worried about the deficit.

It was a remarkable interview because for two reasons. One, I think he definitely explained what's behind the GDP spurt, but second, that it might not be a spurt. By the way, how about the fact that he said there's going to be a China deal? Yet the China stocks are down today. I think that's ill-advised selling. He also said there was going to be a China deal the way that my friend Peter Navarro wants, which is kind of distancing from the 2025 world domination plan, maybe a little bit less Belt and Road. He said the financials might be able to have their own division. This is what American Express has wanted for a long time. It would be finally something that would make the bank stocks go up.

I thought that the market, which rallied on his comments, should have stayed up. If you're worried about a China deal, after that interview, that was the most I'd say positive series of statements about China and the talks yet. He confirmed that one of the things that's helping is that our economy is ascending ... it's stronger than almost every economy in the world ... and their economy is declining. That matters. It's the trajectory that matters.

Speaking of economies, I'm looking at CNBC right now. Our market has been up and down, up and down. Now we're down again.

I know, geeze. Yeah. Wow. Look, the NASDAQ is getting hit pretty hard. It can't go up everyday. I was talking to Bruce [inaudible 00:02:55], our fabulous technician. Bruce is very worried about the market. I see the pocket ... Look, the financials are down. The healthcare stocks are really getting killed. Fang had really flat lined. The industrials, people are starting to downgrade it. Retail is hit or miss. I don't want to cheer lead for the market because we've been up for nine straight weeks. Even though I did a piece saying ...

I was going to say. You sleep soundly.

Obviously if the market goes down, it's an opportunity is what I'm saying. Now, the market is over bought and I don't like that it's up for nine straight weeks. It needs to rest. My writing partner Matt Horween and I frequently talk about resting. This is the equivalent of resting. Resting is JP Morgan going, say, 106, 102. Resting is Coco-Cola hang here. Resting is Merck trying to get through 80, maybe not. Resting is Caterpillar stuck in the 130s. It might go down to 128. We just have to accept the fact that when it's resting that's not bearish. When it's resting, it's not bullish. When it's resting, it's fine.

I'd have to go back to the late, great ... Not the late great. He's alive. He just doesn't talk ... Peter Lynch, who always said, "Look, you've got to be in during these periods because there's only very short periods," today nine weeks, "Where the market makes up so much performance." Look at the nine weeks, the two months. 11% gain in NASDAQ. 30% in NASDAQ. If you were to have sold after Christmas at the low, or the day before Christmas, you would have missed this gain. Therefore, what he would say, Peter Lynch would say ... He ran the Magellan Fund. It's where I put my money for my IRA. He would say point blank that those were the weeks, that if you weren't in you missed the performance.

Don't sell. Let the market rest. Let the market go down. Then we'll look at opportunities. If Goldman goes to 199 on the Maxine Waters hearings, I don't know, March 12th ... Maybe by ...

What about JC Penny because that stock ain't resting?

Now, that's stock of the day. We're going to have to ... I'm not allowed to talk about dollar stocks when they have money. What happens if she pulls it off? What happens if she turns it? It would be shocking, especially because it's in the mall, but anything can happen. I think she's doing a lot right. She's getting out of bad businesses, spending more money in the good businesses. It's the balance sheet though.

You go back and read Larry Cope's letter. Fix the balance sheet and then play offense. You cannot play offense until you fix the balance sheet. By the way, Jeff Gannet, I know a lot of people are deriding Macy's. Macy's is a hard term. But what was the first thing he did? He fixed the balance sheet. I don't even think he's really played offense yet. I think the problem with Macy's is generational. That's really the issue. There's a new generation that buys clothes ... I think of myself. The new generation rents the runway. New gen-

I just signed up for Rent the Runway.

Did you really?

Yeah, I did.

Did you really? Why?

My boyfriend is constantly teasing me that I have too many clothes and I don't wear-

Is he from Texas, too.

... them. No, he's from New York.

All right. Good. good purse sense there. You don't have enough clothes, what, to go out?

I have ...

On a Saturday?

Yeah. I have too many clothes.

You have too many clothes.

Too many clothes. He's constantly trying to get me to sell my clothes or get rid of them. I decided, you know what-

Why? He just wants more closet space or ... No, honestly.


Here's why I ask this. Here's why I ask this. Because there's a landfill issue. My daughter is at Parson's. She's getting an associate's degree in business and fashion. We often talk together about this. We need sustainability. Maybe sustainability means renting the runway.

That's what I was thinking. Because there's so many clothes that I have in my drawers that I don't touch, I never wear them.

Right. I don't think that's uncommon.

No. I actually did the-

It's a train, but this is the anti Macy's train that I'm talking about.

It is because I had to choose Rent the Runway so I didn't spend so much money on the ...

See, this is what I mean. One of the reasons I'm so glad we work together is that my generation didn't have Rent the Runway so I don't know about this what I call an existential threat to Macy's. Because there was no existential threat to Macy's. When I got out of law school, what did I do? I mean, when I got out of college, what did I do? I did a lot of stuff, lived in my car. Blah, blah, blah. Only ended up in New York. The first thing I did was get a Macy's card because that's what you did. You got a Macy's card.

Did you, when you got out of college, ever think about getting a Macy's card?


There you go. We all got Macy's cards. I remember my friend Jill Abrams, she said, "Let's go get Macy's cards."

That's not ...

No. She encouraged me.

It's interesting.

Yeah. [crosstalk 00:07:34]

I still love my TJ Maxx, my Marshalls. I still love going in them and buying-

TJ Maxx by the way, TJ Maxx, there's a firm ... I don't want to mention which one because I don't want to pick on them. They have [inaudible 00:07:43] to sell on TJX. Go read Matthew Boss, JP Morgan. TJX may be the bargain in a group, maybe a bargain in the group.

Did you see this news that Martha Stewart is joining Canopy Grove, that they tapped her?

Yeah. What do you think that ... No, I have a piece this morning. I'm going to have to revise it later because Cory Booker introducing legislation calling for not just a decriminalization, but saying, listen, make pot legal and get those people expunged, their records expunged. This is so important, as someone who has hired people who have paid their dues for drugs and are fabulous employees. We have to have more of these people back in the workforce. They've paid their dues. It's ridiculous. It wasn't even a crime. Cory Booker doing the right thing.

What about Martha Stewart with the CDB products?

You know what, Martha is a friend, fabulous businessperson. I think that means that you ... This is a legitimized trend, like Larry Bosse said yesterday. I've been recommending Canopy and I've been recommending Kronos. Kronos is a little extended. Of course, GW Pharma I had it on last night. GW Pharma is in many ways my favorite because GW Pharma, it's a cannabinoid. It's an Epidiolex product just for children for epilepsy. Go read An Unraveled Mind by Kurt Eichenwald. What happens is children grow up and as they grow up they're not going to be saying, "Oh, I can't use it anymore." This is life saving. Mr. Gover, who was on the show, is the CEO. I was indeed trying to goad him to say all the uses. When you have a Martha Stewart get behind it, that matters. In the same way that it matters that Rob Sands and Bill Newlands, who was a great teacher we had, backed Canopy. This is very important.

You just mentioned ... I kind of slid past it ... that you need to revise your Real Money piece. Now why do you need to revise it?

Because if Cory ... I think you have to recognize that the next step ... The big issue with cannabis in our country, it's the patchwork. Only GW Pharma is officially sanctioned by the FDA. I think that's not right. Now Gottlieb is fabulous and he's approved 53 drugs this year. Gottlieb is an amazing FDA head. GW Pharma has the right dosing. One of the problems, when you try to get a prescription, a doctor is very reluctant to give you a mega ... Here, it's 50 meg, it's 70 meg. That's really important. What matters is if you decriminalize, more than decriminalize, if you actually make it so it's fine, then there are a lot of just kind of plain everyday pain issues where people get ... They'll get Percocet from their doctor. It's still prescribed. If you have knee surgery, the wrong doctor is going to give you ten Percocet. The right doctor gives you a bag of pees. That's what you use. I've had them both operated on. We've got to replace Percocet with gummies or THC, whatever, anything that's not addictive. That's what I want. If that happened, we could get people ... You can't get these people off of opiates. That's the real issue. The congresspeople who are fighting this have to recognize it's opiate versus cannabis. That's the fight.

Would you give Martha Stewart's line of CGC products to your dogs?

I don't know. Xilinx is almost out of obedience training.


I hope he comes back and stops eating my pens.

Yes. I hope that, too.

He's so dumb.

Okay, Jim. I also want to talk to you about the Tesla news that we're going to see later today from Elon Musk.

With the [crosstalk 00:11:27]?

We just don't know. He said that he's got news and then he's going to announce it via Twitter.

I'm hearing it's two billion dollars. By the way, Forbes numbers are really bad in China. One of the things that's happened, China has got ... Million people die a year of respiratory illness. They need plug-ins, they need electrics. They need every electric they can. 60 Minutes featured one that I mentioned ... I mentioned it in my Real Money piece. China loves anyone who can cut the number of respiratory illnesses, particularly because a lot of their companies are so horrendous, coal, steel. They're belching. Anybody who's an antidote, even if they're [inaudible 00:12:05], is fine. It'd be a good sign for the trade talks, too.

We saw this incredible GDP number and I'm wondering, how can investors trade that today?

I think that the GDP number and the Chinese, what Larry Kudlow talked about makes it so that you want to go buy the stocks that they're throwing away that have good fundamentals that have to do with China. I would look at Emerson. It's still not too late to buy some Honeywell. Technologies. Not going to go buy Apple off it because yesterday Best Buy talked about cell phones being bad. You've got bad cell phones here, bad cell phones there. You got to hold off buying. Even though I don't want you to trade Apple, you've got to hold off buying. United Technologies is down. I'm beginning to think that that's silly. Rolls-Royce pulled out of the engine contest between United Technologies and GE. United Technologies figures prominently in a lot of the plane orders and there was an upgrade today at Boeing, 450 to 500 price target boost. You got the big British Airways buy. You have the Vietnamese buy. Just buy United Technologies.

All right, Jim. We got to head over to Action Alerts Plus because I got to talk to you about J&J.

Oh my, it's going to be very exciting.

Yeah. You can find us over on Thank you for joining me, Jim. Thanks for joining us, guys. We'll see you tomorrow.

It's almost Friday...

Good Morning, GDP

The U.S. economy slowed to a 2.6% annual growth rate in the fourth quarter, as the stimulus faded from President Donald Trump's late-2017 tax cuts and consumers reined in spending amid nagging uncertainty over his policies, from the trade war with China to the longest-ever government shutdown.

The latest report was delayed by a month due to the worker furloughs caused by the government shutdown, reported TheStreet's Brad Keoun.

J.C. Penney's Beat

Real Money's Stock of the Day, J.C. Penney (JCP - Get Report) , posted stronger-than-expected fourth quarter earnings Thursday and said it expects to be free-cash-flow positive in the coming year.

J.C. Penney said earnings for the three months ending on February 2 came in at 18 cents per share, down 68% from the same period last year but 7 cents ahead of the consensus Street forecast. Group sales were pegged at $3.67 billion, the company said, down 8.9% from last year and just shy of the $3.78 billion consensus collected by Refinitiv. J.C. Penney also said same-store sales fell 4% from the same period last year, a figure that beat the 4.3% analysts' estimate.

Related. These Japanese Brands Are Beating U.S. Rivals in China's 'New Retail' World

Canopy Growth's Bringing on Martha Stewart

Canopy Growth (CGC - Get Report) announced Thursday that Martha Stewart would be joining the cannabis company in an advisory role to help drive interest in hemp-derived CBD products.

Canopy Growth said it hopes to tap into Stewart's "deep understanding of what consumers in the United States and around the world want," as the Canadian weed company pushes itself into the mainstream, TheStreet's Tony Owusu reported.

"As soon as you hear the name Martha, you know exactly who we're talking about," said Canopy Growth Chairman and co-CEO Bruce Linton. "Martha is one of a kind and I am so excited to be able to work alongside this icon to sharpen our CBD product offerings across categories from human to animal."

Related. Jim Cramer: My Best Stock Picks for Cannabis and China

Over on Action Alerts Plus, Cramer broke down his thoughts on Johnson & Johnson JNJ and whether or not he's ready to add more Lam Research LRCX to his portfolio. Watch Cramer's exclusive Daily Rundowns on Action Alerts Plus when you sign up here

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