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In Friday's nonfarm payroll report, investors learned that the U.S. economy created 271,000 new jobs in October, bringing the unemployment rate to a 7 year low of just 5 percent. Jim Cramer was stunned, as economists were only expecting 180,000 jobs and this could give a green light to the Fed to raise interest rates soon.
But does that mean it is time to sell stocks?
Cramer had a warning for investors on what to expect in reaction to the blowout jobs number.
"There will be a rotation in the market, and that will make those unfamiliar with the profession of money management very uncomfortable owning certain stocks even as there are plenty of opportunities to make money in others." (Tweet This)
According to the "Mad Money " host, the Fed has to raise rates this year, because all of the reasons that prevented it from doing so previously are all gone.
The Fed was waiting for a strong unemployment report that showed wage growth, and it got it. It was waiting for turmoil overseas to calm, and it has. Even China's stock market is once again in bull market mode, up more than 20 percent from its bottom in August.
The only horrible economy that remains is South America, but Cramer thinks America is strong enough to brush past that.
So what stocks will be impacted from a rate hike?
"Given that I think the first hike will simply inspire talks of more hikes—even if the Fed issues a one and done statement—you are going to see housing cool down," Cramer said.
Higher interest rates will also prompt the U.S. dollar to strengthen, which will hurt the earnings of U.S. companies with international business such as the consumer packaged goods, pharmaceuticals and manufacturers. That means these groups will be sold by big money.
The one group that could really benefit from a rate hike is the banks. This group has done nothing for years relative to the rest of the market. With higher rates, banks will finally begin to make money from customer cash deposits.
Read more from Mad Money with Jim Cramer
"In short, it's now the banks' turn to rally. The biggest winners will be the ones with the biggest deposit bases, and that means JPMorgan, Wells Fargo and most of all Bank of America, " Cramer added.
The one bank on Cramer's radar with the most leverage to higher interest rates is Bank of America, and he says it is still way behind the market.
The group that will be penalized the hardest is healthcare. At this point, Cramer thinks these stocks are over owned. Ultimately, Cramer expects more volatility down the road for international companies that could be hurt by a strong dollar.
"All I can tell you is that the big boys will be buying banks and selling health care stocks for the next month, and you have to adjust accordingly or accept the consequences of the brutal rotation that has just begun to occur," Cramer said. (Tweet This)