NEW YORK (TheStreet) -- The nonfarm payrolls report for the month of February was better than economists had expected. The 175,000 new jobs bested estimates of 149,000, although the unemployment rate did rise to 6.7% from 6.6% in January.
However, according to TheStreet's Jim Cramer, co-manager of the Action Alerts PLUS portfolio, investors should "beware of an unemployment number that is strong" when that is the very reason the stock market was rallying in the first place.
Some investors may be wondering why aren't we higher? Well, said Cramer, although the S&P 500 is roughly flat on Friday, it's higher by nearly 5% in the past month and almost 2% since Monday's close. So the markets were anticipating a better-than-expected employment number.
Cramer suggested that a slight selloff from these levels wouldn't be surprising, and the big growth stocks would be the first to go since those are the go-to names for investors in a sluggish economy. However, in an improving economy, which is generally accompanied by higher rates, the bank stocks are where investors need to look.
"As the yield curve gets some inflection and the 10-year [Treasury yield] trades to 3%, the financials are going to be the place to be," he concluded.