Why Dow 11,000 Matters So Much
Don’t discount Dow 11,000's role as a much-needed confidence builder in this still-shaky economic environment. With home prices down, salaries stagnant and little to no hiring taking place, consumers need every bit of positivity they can get.
“This is the hidden wealth effect and it does matter,” Cramer said during Friday’s Stop Trading!.
While it’s true there is more risk for investors up at the 11,000 mark, and there’s the chance the index could pull back 3 percent to 5 percent, Cramer said, “We’ve got some really positive trends” worth noting. Not the least of which is the low multiples on otherwise strong companies, including Apple .
Cramer thinks earnings estimates are way too low for many companies, too, including Ford , IBM , DuPont , Caterpillar and United Technologies . The “tailwind of currency” will add to those profits, as the euros earned overseas are translated into more dollars here at home.
If he’s right, if earnings are too low, and then these companies deliver better-than-expected quarters, Cramer said, “The market goes higher.”
Finally, Cramer thinks we’re about to get “very good news” about ethanol and the government’s “expanded use” of the alternative fuel. That means “the rally’s going to continue” in the agriculture sector.
When this story published, Cramer's charitable trust owned Apple.
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