“I want to stipulate that I am not ignorant of the big issues. I’m constantly checking every European bond auction and I am well aware that our taxes are going up, maybe, as is the case with some of us, up big,” he said Thursday. “But I keep going over these quarters that have been reported, we’ve heard from about one-fifth of the companies already, and I see three things.”
Cramer detailed three factors to watch.
Union Pacific noted that cars have been a big driver of rail traffic, a footnote that many people might have missed.
There is a possibility the U.S. auto industry will build more than 14 million cars this year, but the strength in General Motors and Ford is obscured by poor performance internationally.
“We don’t want Ford or GM to pull back from Europe or Latin America. That would just be stupid,” he said. “But I have to tell you that Ford, U.S,. Ford, would be at $15 by now. General Motors? Call it $25.”
The housing market: “How strong is housing? We’re now in the phase where even the most wildly inconsistent housing plays are working,” Cramer said.
A 3-point run in Whirlpool stock was “remarkable,” he added.
Although it might be tough to recommend home builders such as Lennar, Toll Brothers, Pulte and Standard Pacific at the moment, the right timing could make them smart buys.
“When we get pullbacks, you have to pull the trigger,” he said. “We have a developing housing shortage. These are the guys with the homes.”
“It’s so easy to dismiss these stocks because of worries about the finances of airlines and the slowdown in China,” Cramer said. “But take a look at Textron. Amazing numbers from Cessna. Go listen to what Dave Cote, CEO of Honeywell, told us last night—he made it clear that the aerospace cycle has fits and starts, but it is in long-term ascendance.”
Cramer said it was “a little ridiculous” to say the cycle is done at this point, especially with Boeing’s customers beginning to take delivery of its Dreamliner.
Investors would do well to keep an eye on these three drivers that are working in a rocky economy, Cramer said.
“Who knows what would happen if things ever got better? In the interim, when we get our pullbacks, these are the themes that have our backs and can be bought into any weakness, provided that you don’t put too much emphasis on the international players and you stick with as much domestic security as you can muster,” he said.
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