Chemicals' Turn to Take Hit From Housing

Housing ripples still: this time chemicals. The other day I ripped into someone who was trying to tell me that Encore Wire (WIRE - commentary - Cramer's Take) had bottomed. Now it's PPG Industries (PPG - commentary - Cramer's Take) that's saying there are problems with PVC, another instrument of housing.

Frank Mitsch from BB&T, who has been recommending PPG forever, downgraded it today because of a glut of PVC. It is amazing how we went through this cycle where housing peaked, the homebuilders plummeted and then the finished-goods makers -- Fortune (FO - commentary - Cramer's Take), Masco (MAS - commentary - Cramer's Take), Sherwin-Williams (SHW - commentary - Cramer's Take), Black & Decker (BDK - commentary - Cramer's Take) -- got crushed.

Now it's the chemicals' turn to get smashed.

All of this is happening exactly when it should, because today we saw the "grim" housing starts number. This number makes tons of sense, because inventory workoff is always two ways: a cutback in supply and an increase in demand because of rates being low or demand being stimulated by lower prices.

So, of course, the chemicals get smashed today.

But remember, like Fortune and B&D, they will bounce back in time, too. Not worth holding -- but not worth buying, in the case of PPG, until it has yield support.

At the time of publication, Cramer had no positions in any of the stocks mentioned in this column.

ALL JIM CRAMER BLOG ENTRIES | POST A COMMENT | READ COMMENTS  

---

Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for Action Alerts PLUS. Listen to Cramer's RealMoney Radio show on your computer; just click here. Watch Cramer on "Mad Money" at 6 p.m. ET weeknights on CNBC. Click here to order Cramer's latest book, "Real Money: Sane Investing in an Insane World," click here to get his second book, "You Got Screwed!" and click here to order Cramer's autobiography, "Confessions of a Street Addict." While he cannot provide personalized investment advice or recommendations, he invites you to send comments on his column by clicking here.

TheStreet.com has a revenue-sharing relationship with Traders' Library under which it receives a portion of the revenue from Traders' Library purchases by customers directed there from TheStreet.com.