Cramer's TheStreet.com TV

Return to Article

Cramer's TheStreet.com TV Recap: Retail Rollover

TheStreet.com Staff

"Yesterday something happened that is contrary to everything I have ever learned about the market," Jim Cramer said on TheStreet.com TV's Wall Street Confidential video Webcast Tuesday.

The market fell on two pillars -- oil and tech -- Cramer told Aaron Task, the host of Wall Street Confidential.

While Cramer seemed less concerned with tech because it has been up and because a lot of people feel that December is the time to take profits in this sector, he said that "it's almost as if when oil goes down the market looks bad."

The market witnessed Chevron (CVX) lose a couple of percentage points in a very short period of time, after it took forever to put those percentage points on the stock, Cramer said.

In addition, a lot of people were betting that Oracle (ORCL) wasn't going to perform well, and it turned out to be a good call, he said.

Moving on, Cramer said "the rollover in retail" was surprising to him because the products are "hot." However, the retailers aren't making any money, he said.

Task commented on how Circuit City (CC) reported "a loss for the quarter that surprised everybody" and asked Cramer why the fact that people weren't short Circuit City is making the stock's decline worse.

When Best Buy (BBY) had a "so-so" quarter and announced a big guide down, Cramer said he thought investors would have bought puts on or been short Circuit City, so that when the stock went down a couple of points, these market players would have to cover it.

"It looks like that trade didn't happen," he said. "It looks like the short-sellers aren't creating that trampoline cushion underneath by having to come in and buy."

Cramer said he's also hearing bad things about Federated Department Stores (FD).

There was a perception that a lot of big-screen TVs were going to be sold, and even though they were, retailers are not making money off of them, he said. But this doesn't mean people should avoid big-screen TVs, Cramer added.

"There are probably some components that would work," he said.

But in general, he said the play on big-screen TVs "has been a bad bet." And the worst part of the bet is that Costco (COST) has come in and "disturbed" the pricing, Cramer said.

He believes that Costco is where people are shopping, as it is the only retailer that had a good quarter.

Emerging Issues

"Today Thailand is getting crushed because the government is instituting controls on short-term capital in the country," Task said. "Is that the kind of thing that reverberates out and becomes a bigger issue for emerging markets?"

Cramer said he believes that emerging markets have been "uniquely buoyed" by two "equally stupid" forms of money, leveraged hedge funds and retail, which have come in "very aggressively," seen the big returns and thrown money at the markets.

"These are both hot money, and I hate to be where the hot money is, because you make money one day, like today, and then, boom, it's out," Cramer said. "This will cause the reverberations."

There is a trial going on in Colombia, which was on the front page of today's New York Times and could be bad for the government in the country, Cramer went on to say.

Looking at Bancolombia (CIB) up here near $31, Cramer said he would sell it.

Cramer said he wants to be a trader of emerging-markets stocks.

"People don't realize many of those stocks are bought with borrowed money," he said. "You can't get comfortable with those markets, and if you are, you're going to lose money."

When Task commented on how there seems to be a lot of data suggesting that the Fed is not going to ease rates, yet the market is hanging in pretty well, Cramer said there are usually a lot of short-term "gyrations" that take place in the market during the last 10 days of the year.

He also said that the market is "thinner" than it should be here, and Cramer urged people to take advantage of dislocations in the market provided that the fundamentals are good.

"Look for collateral damage and buy that," Cramer said.

In oils, it is natural gas that is pulling things down, said Cramer. He advised people to buy stocks that are only levered to oil and not natural gas, as they are more likely to "come back quicker."

Cramer also said he likes Chesapeake Energy (CHK) better than Anadarko Petroleum (APC), calling Chesapeake "very well run."