Congress and crude prices have “squeezed the life out of this market,” Cramer said Friday. Investors have reacted so severely to the seeming bad news from these two areas that all the good news is being ignored. And that’s why stocks are down.
Need proof? How about Wall Street yawning at a number of bank upgrades? How about the continued low prices of health-care stocks, despite the fact that we now know many of them will escape President Obama’s proposed reforms? How about Novellus Systems closing only 22 cents higher today even though two analysts upgraded the stock and predicted an upside surprise for Monday’s earnings report? Instead of seeing these bullish reasons to buy, buy, buy, fearful investors have brought us back to October’s lows.
Feel free to blame Washington for much of this trouble, Cramer said. If it isn’t some anti-business proposal from the White House, then Nancy Pelosi is doing her share to slow a much-needed economic recovery. If the government took a timeout for just awhile, Cramer thinks the Dow would jump a few hundred points, especially with what he expects will be a stronger-than-expected earnings season.
Oil has caused its share of problems as well. People seem to think that with crude prices coming down everything else will, too. But Cramer finds issue with that for two reasons: First, $147 oil hurts way more than $50 oil. Cheap gas puts money in consumers’ pockets, and lower fuel costs boost margins for the companies that use it. That’s good for everybody. Second, we know that speculators bid up the price of oil to artificial levels, so it has to come down to its true market value. If that’s the case, then there is no point in using oil as a barometer of worldwide economic health.
Cramer doubted this investor negativity would last much longer. As we said, he’s bullish on the coming earnings reports. And with stocks as cheap as they are right now, investors probably want to start buying. Honeywell is $23 off its high and yields 4%. Home Depot is another Mad Money favorite, and it also yields 4%. Wal-Mart is just $1.27 from its low, making it a good buy for investors who aren’t as bullish as Cramer. And then there are the tech specs – AMD, ON Semi and Ciena – which are just too cheap right now.
“The market’s ennui may not make sense,” Cramer said, “but it’s giving you a real opportunity to buy stocks for less than you should have to pay.”
Cramer’s charitable trust owns Home Depot and Honeywell.
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