Cramer on Friday focused on one of the biggest forces behind market sentiment: the media’s obsession with negativity.
Think about it. Newspapers and magazines need to keep you reading, radio needs you to listen, and, yes, cable channels want you watching. So they take a doomsday stance to capture your attention. This week alone we were bombarded with talk of rising Treasury and commodity prices, threats to an economic recovery.
Of course, no journalist revisited the Treasurys story when yields dipped right back down by Friday. And the commodities increase was just a product of hedge-fund bidding. The actual demand didn’t warrant those higher prices at all.
Sadly, investors are missing out on the good news, Cramer said, as these invented dramas hog up page space and airwaves. To counter the trend, he highlighted 10 untold yet still important stories everyone should know.
The weak dollar is great for the U.S. economy. It grants foreign markets more purchasing power, allowing them to buy more of our goods. So while pundits and analysts alike extol the virtues of a strong greenback, Cramer knows better. So, too, does the market apparently, considering this week’s 3.6% gain despite the dollar’s decline.
The housing bottom is coming. Just today The Wall Street Journal ran a story about California’s resurgent real estate market. Plus, the demand for mortgage money is strong and on the rise across much of the U.S., even as interest rates trend higher. Funny, though, that people seem to talk only about foreclosures and declining home values.
Shoppers are shopping. Consumers are still spending money, but they’re being smarter about it. They want value given the current economy, and they’re finding it at outlets like J. Crew, which jumped 26% on Friday.
Virtually the entire tech sector is rallying right now, which is why Cramer has been recommending the stocks for weeks. No matter how many gadgets hit store shelves, people snatch them up. But instead of hearing this story, the media reports on a supposed smartphone glut.
Stocks are embracing bad news. Procter & Gamble on Thursday significantly lowered its 2010 earnings forecast, but the share price climbed anyway. Something similar also has happened in NYSE Euronext, Coca-Cola and Monsanto .
Commodities are not driving inflation. While Cramer fears rising oil, and the higher gas prices that would come with it, crude’s increase hasn’t hurt retail sales just yet. Remember: It is hedge funds that are manipulating these prices.
The market did a great job of absorbing $70 billion in new bank equity. Firms that were destined for bankruptcy or government ownership raised billions and billions of dollars, increasing the overall stock supply – but still we went higher.
Foreign markets seem unstoppable. Some are even up double digits. And if that’s the case, is the US far behind?
Commercial real estate is not the next big crisis. Despite all the talk that this industry is a bomb just waiting to go off, the real estate investment trusts seem to be holding up well. Cramer even went to far as to recommend the iShares Dow Jones US Real Estate.
Lastly, mutual funds are starting to receive more money from eager investors. The huge piles of cash that have been sitting on the sidelines are getting back in the game. And the strong month for stocks that we just had will only entice more people to join in.
Read back over the 10 positives, and ask yourself, can you really say that none of these matters as much as rising gold prices or a quarter-point move in interest rates?
“Don’t be misled by the endless misdirection plays,” Cramer said. “There are plenty of positives in this market.”
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