Should the technology and financial sectors see continued strength, Cramer on Monday said the overall stock market could rally. Given a few indicators, it seems that could very well happen, too.
Although both tech and financials were among the worst laggards for the latter half of 2011, the two sectors have been acting like leaders in 2012. Nevertheless, nobody expects much from either and the average analyst on Wall Street has incredibly low expectations for tech and financial companies, not including Apple , U.S. Bancorp and Wells Fargo . The expectations are so low for these two sectors that Cramer thinks most companies will actually be able to beat on earnings.
It would be hard for stocks to rally without strength in the tech and financial space. After all, tech is the biggest component of the S&P 500 , accounting for roughly 17.5 percent of the index. The banks, a major part of the financial sector, make up around 12.4 percent of the S&P.
So what’s the bottom line?
“The biggest surprise of 2012 could be that the financials, the most hated group out there, can actually soar,” Cramer said. “If that happens, the leaders, like USB and Wells Fargo can really romp, particularly now that the largest market cap bank, and the de facto winner, is Wells.
“Apple and Wells Fargo, they are the purloined letters of this market, hidden right in plain sight and ready for the grabbing.”