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Tech investors need to be innovative

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Mark Zuckerberg, founder and chief executive officer of Facebook Inc., smiles during a news conference at the company's headquarters in Palo Alto, California, U.S., on Wednesday, Oct. 6, 2010.

Mark Zuckerberg, founder and chief executive officer of Facebook Inc., smiles during a news conference at the company’s headquarters in Palo Alto, California, U.S., on Wednesday, Oct. 6, 2010.

Tech is a no brainer for investors. But a simple investment theme for the sector is being badly executed.

Investors are too narrow in their focus, chasing Nasdaq and FANG (Facebook, Amazon, Netflix and Google) stocks similar to how investors often play emerging markets in a simple fashion.

Investor sentiment is cautious, except when it comes to tech stocks — even a scandal doesn’t hurt for long. The scale of the Facebook data privacy issue is still being uncovered with new revelations about information shared with Huawei, a Chinese company that some American politicians and regulators want banned from government contracts because of national security concerns. Facebook stock continues to trade around records.

Apple recently got handsomely rewarded for making sense of tech disruption, its market value soaring close to a trillion dollars as it embedded all of the themes — big data, artificial intelligence (AI), augmented reality (AR), internet of things (IOT) and enhanced security — under the hood of its iPhone.

The problem is that the market now considers tech stocks a defensive play. How did a growth sector, trading around eye-watering valuations thanks to crowding, suddenly become defensive? Has everyone forgotten it also sold-off in the February meltdown and again in March?



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Investors should take a bite of this stock

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Workers assemble semi trailers on the factory floor at the Wabash National Corp. manufacturing facility in Lafayette, Indiana.

Luke Sharrett | Bloomberg | Getty Images

Workers assemble semi trailers on the factory floor at the Wabash National Corp. manufacturing facility in Lafayette, Indiana.

Finally, Cramer looked into why a top truck manufacturer at the “sweet spot of e-commerce” issued a wildly negative earnings preannouncement on Friday.

Between a lack of new workers, rising raw costs due to steel tariffs and slumping demand, Wabash National’s business is being squeezed, and the Fed’s plans to hike interest rates several more times don’t exactly help, Cramer said.

And while the “Mad Money” host understood why Fed Chair Jerome Powell was forecasting more rate hikes — rising labor costs, like those for overtime, tend to be inflationary — he thought some inflation was “a small price to pay for a strong economy.”

“Let’s call it a consequence of full employment. Why not just let those workers make a little more money?” he said. “Companies like Wabash and Thor [Industries will] sort it out. They got that big tax cut anyway. Meanwhile, the tariffs are already slowing down the economy, so the Fed may not need to take much more action anyway.”

But if the Fed doesn’t listen, U.S. manufacturers aren’t exactly left with a pretty picture, Cramer warned.

“We’re left with this situation where, just when a down-and-out manufacturer finally has some hope for a big year, it’s gotten hit with the triple-whammy of higher labor costs, higher steel costs and higher interest rates,” he said. “To me, these rate hikes seem like an awfully high price to pay to break an inflationary cycle that’s mostly government-made to begin with.”



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Adobe, JB Hunt and more

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People enter the Adobe Systems Inc. office in San Francisco, California.

David Paul Morris | Bloomberg | Getty Images

People enter the Adobe Systems Inc. office in San Francisco, California.

Adobe stock rose nearly 6 percent during after-hours trading after it announced its growth strategy on Monday at its analyst meeting. It estimates that its 2019 revenue to grow 20 percent year over year and its digital experience subscription bookings to grow by 25 percent. Thomson Reuters predicts its fourth quarter earnings per share to be $1.89 and its revenue to be $2.43 billion.

J.B. Hunt Transport Services fell as low as 3 percent during after-hours trading on Monday after the trucking company reported mixed third quarter earnings. The company reported earnings per share of $1.47, which beat analyst estimates of $1.38 per share. Revenues, however, missed expectations, with the company reporting $2.21 billion, coming in slightly below analyst estimates of $2.2 billion. J.B. Hunt stock later regained most of its post-market losses and traded positive.

Shares of Twilio, a cloud communications company, fell about 4 percent in post-market trading after announcing that it will acquire SendGrid in a $2 billion all-stock transaction. This equates to about $36.92 a share based on Monday’s closing price. The transaction is expected to close in 2019.



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Facebook removes accounts spreading military propaganda in Myanmar

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Facebook CEO, Mark Zuckerberg

Matt McClain | The Washington Post | Getty Images

Facebook CEO, Mark Zuckerberg

Facebook said it removed numerous pages and accounts linked to the Myanmar military that were being used to spread propaganda to approximately 1.35 million people, the company’s latest effort to crack down on the spread of misinformation across its network.

“We want to make it more difficult for people to manipulate our platform in Myanmar and will continue to investigate and take action on this behavior,” Facebook said in a blog post on Monday. The company said it removed 13 pages and 10 accounts that were “engaging in coordinated inauthentic behavior on Facebook in Myanmar.”

Facebook has been plagued by abusive activity over the last couple of years, as groups exploit the social network to spread propaganda, abusive content and false information, often in an effort to influence elections or stir up hate between different cultural groups.

In Myanmar, Facebook was used as part of a campaign that targeted the country’s Muslim Rohingya minority group, according to a report Monday by the New York Times, which cites unnamed “former military officials, researchers and civilian officials in the country.” The campaign included the creation of Facebook accounts and entertainment, beauty and informational pages that were used to push incendiary comments and posts.

Facebook announced in August that it wanted to prevent organizations and individuals in Myanmar from using its services to commit or enable serious human rights abuses in the country. At the time, the company said it was removing 18 Facebook accounts, 52 pages and one Instagram account that reached nearly 12 million people.

Beyond Myanmar, the company has been busy removing pages and accounts that abuse its community guidelines and policies. Last week, for example, Facebook said it had taken down 559 pages and 251 accounts that were being used to spam users with clickbait posts.

WATCH: Facebook says security breach affected 30 million accounts



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