While he doesn’t think stocks are cheap just yet – he thinks earnings estimates are still too high based on the weaker euro and the beginnings of a slowdown in China – the debate alone marks a new shift in investor sentiment.
Take Exxon Mobil. This stock has never been cheap, Cramer said, but it has recently dropped below its low during the financial crisis. Now XOM’s dividend yield is becoming increasingly attractive, as is the stock itself at these levels because of Exxon’s strong balance sheet, capable management and lack of exposure to BP’s spill in the Gulf of Mexico.
Cramer also noted how JPMorgan Chase has held up even despite having its price target cut by Rochdale Financial Securities’ Dick Bove. That, too, is a new trend.
“Every time anyone has said anything bad about a stock,” Cramer said, “it has just been hammered.”
Still, the flight to quality remains a strong trend in its own right, with today’s 3-year Treasury sale offering proof. Erin Burnett quoted research that, since the end of March, 5-year notes are up 3.5%, 10-years have gained 6% and 30-years have climbed 11%.
Cramer said that those numbers are a product of investors seeking security in this “treacherous market.” They want to own something, and US bonds are safe. Hence those strong returns since March.
Lastly, Cramer was bullish on AT&T’s potential push into India, saying the company’s balance sheet would have to be “pretty strong” to make such a move.
In fact, international is where the growth is, he said. The US right now is all but a zero-sum game, with companies simply taking share from each other and not from new markets. But overseas markets have barely been penetrated. That’s one of the reasons he likes Vodafone right now.
“The growth is not in America,” Cramer said.
When this story published, Cramer's charitable trust owned JPMorgan Chase.
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