Mad Money

Employment Fears Scare Investors Out of Cyclicals


A sector rotation is underway in the markets, Cramer said during Tuesday’s Stop Trading!.

Investors are selling their stakes in cyclical plays like Caterpillar , Bucyrus International and Joy Global and buying defensive names like Clorox , Johnson & Johnson and Kellogg instead. And these latter companies haven’t exactly performed well enough to warrant the buying, Cramer said.

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What’s at the heart of the move?

Fear. Fear that the US economy will continue to lag without job creation.

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“Right now, people so worried about [unemployment] claims on Thursday and so worried about [the] employment number next week,” Cramer said, “they are already ringing the register” because “there’s no employment growth.”

“Anyone who’s on these conference calls knows the truth,” Cramer said. “We are the worst, most slow country on earth.”

One problem the Mad Money host sees is that while other countries are pouring money into infrastructure building, which boosts business for many companies and therefore creates jobs, the US is not.

On a more positive note, though, Cramer did praise DuPont for its most recent quarter. Particularly he took note of the company’s seed business. Where once he considered Monsanto the only play worth watching in this space, he said, “From now on it’s DD.”

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