Perma-bulls take notice: The market is headed higher.
That was Cramer’s message for Thursday’s Mad Money. Sentiment has been so negative, the outlook from so-called Wall Street experts so dire, that the slightest good news propels stocks forward. Case in point: Wells Fargo’s earnings pre-announcement today, which sent the Dow climbing 246 points.
This once-troubled bank now expects to report record first-quarter earnings of $3 billion dollars, or 55 cents a share. The combination of a key acquisition – Wachovia – and housing’s bottom has put this company back on top, and that’s a game changer for the entire market.
Healthy banks are the key, Cramer said, to one of this recession’s biggest problems: toxic assets. Stronger firms like Wells Fargo and JPMorgan Chase could buy up the good assets of institutions that are buckling under the weight of their toxic paper, while the bad is sold through Treasury Secretary Geithner’s public-private partnership plan. Washington has had no place to go with the country’s failing banks, but now they do with the resurgence of Wells and others like it. Even Bank of America is back in the game, thanks to the rising need for mortgage money.
Add this great news to a string of events that point to a market rebound, Cramer said. Recently, we’ve seen good numbers from Darden and Brinker restaurant chains, strong earnings from Research in Motion, Best Buy and Bed, Bath & Beyond, and even better-than-expected orders from chipmakers Taiwan Semi and Xilinx . This evidence can’t be dismissed as merely anecdotal, either. In fact, it all adds up to what looks like a turn in the economy.
Today’s move wasn’t a rally in a bear market, Cramer said. It was more proof that we’re at the beginning of a bull market. So ignore the doomsayers who scare you away from stocks. Their negativity is just plain wrong – and it will cost you money.
Watch the video for Cramer’s full report on the market’s turn.
Cramer's charitable trust owns JPMorgan Chase and Wells Fargo.
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