Aerospace Could Be Getting Ready for Liftoff

Is a silent stinker getting better? I am talking about one of the other elephants in the room: aerospace. When we survey the landscape of beat-up stocks, we tend to skip over one sector that had been on fire at another time: Boeing (BA - commentary - Cramer's Take) and its siblings.

The drubbing this group has taken has brought down a whole bunch of once-solid players, everything from United Technologies (UTX - commentary - Cramer's Take) and Parker-Hannifin (PH - commentary - Cramer's Take) to Honeywell (HON - commentary - Cramer's Take) and General Electric (GE - commentary - Cramer's Take). Not to mention smaller but good players like BE Aerospace (BEAV - commentary - Cramer's Take), Precision Castparts (PCP - commentary - Cramer's Take) and Allegheny Tech (ATI - commentary - Cramer's Take). This group's lack of oomph, coupled with a strengthening dollar, has created landmines galore. The fact that there are also defense overtones (and that the Obama juggernaut seems relentless) has also made for some miserable stock activity. The declines have been enormous and hideous.

But today things are actually looking up for once. Maybe someone is paying attention to the EgyptAir order this morning? Maybe others are realizing that if oil isn't going back to $145 anytime soon, there will be some airlines that will make it and can order? Perhaps there is simply replacement demand?

I cannot emphasize how important this group is to the health of the market. We are in a strange moment where many sectors are recovering because the price of fuel has gone down, but a lot of it is on a leap of faith. Take a look at Darden (DRI - commentary - Cramer's Take) -- it was making a nice move off the decline in oil, and then we found out the truth. When we find out the truth, we don't like what we see. Same with many of the airline stocks themselves, which have made big moves and then retreated as the Street relentlessly goes to sells.

I think the airline and aerospace group bottomed in mid-July like so many others when oil peaked, but aerospace had no catalysts to go higher, particularly Boeing, which you figure has to lose some orders to Airbus now that the dollar looks like it is going to get stronger.

I sense there are orders lurking, though, for both aircraft companies, and perhaps the cancellations won't be as great as some think.

What to watch? I will feel better -- and I'll believe that the move today in Boeing and Honeywell and Precision is justified -- if we can see a move up in Genesis Leasing (GLS - commentary - Cramer's Take) or Aircastle (AYR - commentary - Cramer's Take), which correctly forecast the huge declines in these stocks.

It will help to some degree if John McCain gives a strong presentation and jumps in the polls, as part of a defense industry stock revival. But the main thing is simply seeing oil not going up any more. That's a huge positive. (Someone must be thinking that -- Lockheed Martin (LMT - commentary - Cramer's Take) just hit a 52-week high! Boy is that stock ahead of the group.)

Boeing's very well run and a joy to own when the cycle is good, but this is one of the worst moments in a downturn I can recall. Fortunately, Boeing is flush; I have seen downturns where it wasn't.

Maybe, just maybe, the group is stirring, adding one more S&P sector into the mix of upside that could portend well for the fall.

Random musings: Do you think FirstFed (FED - commentary - Cramer's Take) knows it can issue 10 million shares right here and do itself well right into the squeeze? Or are they too dumb? Probably the latter. ... I rarely put UBS (UBS - commentary - Cramer's Take) on the critical list, because I guess I am too U.S.-centric, but it is nice to see that stock rally even for a moment. It is extremely capital-challenged, and it remains to be seen whether it can survive despite its size and great asset management business. ... The trick with Goldman (GS - commentary - Cramer's Take) is to realize that there are tons of analysts who have to go under the $1.50 EPS forecast, and I still expect someone to say, "I see a loss for the quarter," a la the piece I followed last night . ... Doug Kass continues to own the Fannie (FNM - commentary - Cramer's Take) and Freddie (FRE - commentary - Cramer's Take) story, and he is totally required reading, better than anyone else in the world on the subject. ... Do you sense how underweighted people still are in retail? Look at Urban (URBN - commentary - Cramer's Take), TJX (TJX - commentary - Cramer's Take), Ralph Lauren (RL - commentary - Cramer's Take) and now Sears (SHLD - commentary - Cramer's Take). Sears has really put in a nice bottom when no one was looking. ... Check out Bob Marcin's natural gas posts in Columnist Conversation. He is raising a number of good points. Glad to be on the side of truth and justice with him!

At the time of publication, Cramer was long Goldman. Jim Cramer is a featured commentator for CNBC, which is owned by General Electric; as part of his contract, Cramer holds restricted shares in GE.

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