JPMorgan Chase CEO Jamie Dimon confirmed to CNBC’s Dennis Kneale that his bank, like Citigroup , was profitable during January and February. That sent JPM’s stock into the $20s for the first time in over a week. While the move is one indicator that Cramer thought might help to sustain Tuesday’s rally, he still urged investors to remain cautious.
Cramer’s main concern was that problems could still lurk in JPMorgan regardless of that profitability. He was hoping for a change in mark-to-market accounting rules, which would take pressure off banks and give them room to recover. If that happens, Cramer said, “then I think what you’ll see is true profitability come through.”
That’s not to say there aren’t “lots of good things happening,” he continued. Goldman Sachs is in position to do an equity offering that would allow the company to pay down its TARP debt. But again, he wants investors to be careful right now.
Cramer pointed to unexpected strength in Whirlpool , with the appliance maker reporting at Raymond James’ Annual Institutional Investors Conference that the company was cash-flow positive and raw costs were coming down. WHR was up big on Tuesday and is up again today.
“This was a very big deal because Whirlpool had been counted out,” Cramer said, “and it shouldn’t have been.”
Cramer also said he agreed with most of Laszlo Birinyi’s suggested Dow component replacements. Birinyi, a respected Wall Street expert, recommended that many of the index’s longtime components should be switched out for Schlumberger , Goldman Sachs, Visa , Monsanto and Baxter . Cramer thinks Visa makes the most sense because it’s a financial that could take over for any of the beleaguered banks now on the Dow. He also said Monsanto’s market cap is big enough for it to qualify as well.
Cramer's charitable trust owns Goldman Sachs and JPMorgan Chase.
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