“I think that the big open question for 2011 is labor,” Cramer said. “And that has yet to be addressed.”
While General Motors has reworked its contract with its union employees, and therefore eliminated a good-sized portion of the benefits costs that were weighing on the company, Ford has yet to. This could be a big problem, putting a halt to Mulally’s success if it is not addressed, and therefore make General Motors a more attractive buy next year.
That being said, though, Cramer still recommended Ford, particularly its preferred shares , for the time being.
“I think this may be one of those situations where like Verizon [and] AT&T,” Cramer said, “depending upon where it is at a given moment, you like one more than the other.”
In earnings news, Cramer called Verizon’s report a breakout quarter, saying that “while there may be some envy for the iPhone, the Droid is just blowing off the shelves.”
He said VMware announced “one of the best quarters of this whole earnings period.”
Meanwhile, FedEx today all but reversed its guide-down from June 16. Cramer attributed the move then to “the psyche of the country during that June period,” saying he endorsed FDX’s decision. But “the mood is better now.”
Finally, Cramer pointed to statements from Wells Fargo on its most recent conference call, where the company downplayed the importance of the first-time homebuyer tax credit. According to Wells, home affordability and low mortgage rates make this market attractive and predicted a “very big upswing in housing,” Cramer said.
“I think this was an excellent conference call,” he said, “and they made you feel better about housing.”
Also on the economic front, Cramer said both AutoNation and Ford speak to a rebound in autos, while retail has been enjoying a rally of its own over the past four weeks. But few people seem to be talking about it.
“There is a lot of things that are happening that make sense for the market to go higher,” Cramer said. “Although, obviously, unless employment improves, this move can be repealed.”
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