Cramer: Rates Will Go Up Rapidly... Right After This Event
In Wednesday's Stop Trading!, Cramer gave calls on the auto industry, plays on changes in airport security, and perhaps most importantly, his perspective on when interest rates will be raised.
Interest rates to go up this year, or will the second half of the year, are rates set to go up? Cramer's predicting that once the Federal Reserve is finished buying mortgage backed securities, "interest rates will go up pretty rapidly." He also thinks that for anyone who hasn't locked in a mortgage rate, now is the time to refinance for a fixed rate, as a hike is clearly in the future. He also suggests that if investors have gains in long-term municipal bonds, now is probably the time to take some money off the table, "right here, right now."
Cramer predicts that mortgage rates could climb to 6% in April, and suggests that home owners do not want to be subject to such large increases.
Moving on to autos, Cramer is highly bullish on Ford . He's extremely optimistic about their quarterly numbers, which could potentially have investors bidding up the stock price. Off strength in the major automaker, Cramer has picked out some suppliers he thinks could ride an upward trend in the wake of Ford. He recommends Magna, Johnson Controls , Tenneco, and Lear as a speculation. His reasons for liking these companies rests in the fact that there is not a great deal of inventory in the auto pipeline and with the troubles surrouding Chrysler and GM there are "not a lot of stock plays associated with autos," he says. Cramer sees this as an opportunity to buy "a diminishing number of stocks in a segment that many portfolio managers want to be overweighted in. That's why Ford can go up for so long," he says.
After the recent increases in safety measures at airports, Cramer has identified a company that may be poised to benefit from the change in the status quo. He suggests Nice Systems Ltd, which produces camera, fingerprint and other technologies that could increase efficiency and effectiveness for airport screeners. Cramer points out that the systems already in place in Israel are proof that the company's products could be implemented on a wide scale in the US.
On the news that AT&T has just finished upgrading its 3G towers, Cramer picked out a few stocks he likes in the sector. Namely, SBA Communications, Crown Castle and American Tower are a good play for the development of new tower installations.
Cramer's charitable trust owns Johnson Controls
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