Cramer spent Wednesday’s “Stop Trading!” talking about a theme that’s common for the “Mad Money” host, namely the gap between the media’s outlook on the economy and market’s take on it.
Look no further than this Wall Street Journal article about the inevitable decline in industrial stocks, as those companies have offered cautious guidance this earnings season. But while the companies may say that they can’t maintain their present level of growth, Cramer said, “The market is saying these stocks can.” Hence the dominance of green arrows, indicating positive gains for the sector, on stock screens across the Street on Wednesday.
China is a big driver for the industrials—and the rails as well—carrying Caterpillar , Cummins , 3M and others. Cramer pointed to a bull market in aerospace and the trucking business as well. So despite the press’ negative talk, he said, these themes are boosting the sector.
If you didn’t like China’s move to tighten interest rates on Tuesday, now’s the time to sell these China-related industrials, Cramer said, “because … you never get one tightening. It’s going to happen again.” He thinks the stocks right now are “cheap,” and it seems as though the market agrees, “but I just want people who are these terrible shareholders, who are hair-trigger shareholders, to recognize this is when you sell [a stock like] Bucyrus if you don’t like it.”
“I happen to like it,” Cramer added. “I think it’s very cheap.”
Among the banks, Wells Fargo is a “breakout name,” Cramer said. But here’s another company that’s been flogged with bad press, though WFC proved them wrong with a strong third-quarter report. And yet again, the market disagrees with the media and has taken the stock higher. Cramer thinks the market is right.
He also defended Goldman Sachs , which also reported a good Q3, taking issue with analysts who hated the stock at $133 but still dislike it at $159. He said their problems with GS were part of an “ideological bias,” and that regardless of how Goldman performs they will pan the stock. Why? Because right now they think all “banks are bad,” Cramer said.
“It’s not about price. It’s not about fundamentals. It’s about ideology,” he said.
Cramer considers telecommunications stocks the same as utilities. They trade like utilities, he said, and offer similar dividend yields.
And lastly, in tech, whoever sold Juniper down to $27 on Tuesday after the bell following its third-quarter earnings report was “stupid as wood,” Cramer said, as that stock has rebounded to $32 and change.
When this story published, Cramer's charitable trust owned Cummins.
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