The market spoke in tongues on Tuesday, Cramer said, though the message was dark and sinister. The 332-point Dow decline, and even worse action in the financials specifically, left little room for interpretation. Wall Street doesn’t believe President Obama can save our economy, and this recession we’re in will be much deeper than expected.
There were four specific tongues, Cramer pointed out, that spoke the loudest: banks, oils, gold and tobacco.
The sell-off led by State Street’s two-for-one stock split spread even to healthy banks like PNC Financial Services , which lost about $16 just in today’s trading session. Clearly, the bears are in control of this sector right now. For that reason, the bank stocks will continue to suffer, even though Cramer thinks the selling is overdone. One counter to these bears, he said, would be the elimination of ultra-short exchange-traded funds. Mary Schapiro, you watching?
The outlook from oils was just as bleak. Let’s face it, the declines we’re seeing in this sector don’t happen unless people are expecting the worst. Think double-digit employment and shrinking gross domestic products across the globe. These stocks are screaming for Obama’s stimulus package, Cramer said, a big one that happens soon.
And the move to gold only further proves the point that Wall Street fears the worst, as investors increasingly favor this traditional safety play. With the financials taking a huge hit, and the steels, coals, oils and the other hard-asset stocks not far behind, people are hiding in gold.
Don’t forget about Altria’s rally, either. This tobacco stock is the ultimate anti-Obama play, Cramer said, and MO’s movement Tuesday was a bad omen. What we wanted to see was a surge in stimulus-related stocks, not in a recession name like Altria.
Agriculture, tech, housing, the entire S&P – they all carried the same depressing news: Things are ugly. The question is whether or not President Obama will meet our high expectations and get us out of this mess. Today, the market didn’t think so.
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