A Financial Rally Lifts All Boats

When the financials lead, much can follow. Think of it like this: If financials are doing well you can buy companies that need credit, you can buy goods makers that thrive when people get credit. You can buy stocks related to retail.

And, most important, you can buy long-dated asset stocks, stocks that are growth stocks that will pay you dividends down the road, because when the financials rally, that means there is less inflation in the future.

You can look at it in stocks. If you can buy JPMorgan (JPM - commentary - Cramer's Take) then you can buy companies like EMC (EMC - commentary - Cramer's Take) and IBM (IBM - commentary - Cramer's Take) that sell into the financials. Because JPMorgan Chase is a big credit card company, you can buy American Express (AXP - commentary - Cramer's Take), Capital One (COF - commentary - Cramer's Take) and General Electric (GE - commentary - Cramer's Take) (the latter is viewed as a big lender, like it or not.) You can go buy companies like Black & Decker (BDK - commentary - Cramer's Take) -- look at that stock fly -- and Whirlpool (WHR - commentary - Cramer's Take). You can maybe if you want to get down and dirty and buy a 5% yielder like Masco (MAS - commentary - Cramer's Take).

Now you can also buy companies that could be taken over by a European that sees the writing on the wall that the dollar has bottomed. This has been my thesis so far, that companies like BDK and WHR can be bought by Electrolux, but it hasn't panned out because the dollar hasn't bottomed. I think, short term, what has happened is the dollar has stopped going down. Longer term, I am still very concerned about the dollar because of our out-of-control spending.

All of these things, but most particularly the growth stocks -- think Procter & Gamble (PG - commentary - Cramer's Take) -- get a real boost because we now see that inflation will not erode the value of that dividend stream.

Yep, financial leadership is the best for what it signals, which is why the rally is so darned powerful.

At the time of publication, Cramer was long Black & Decker.

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