More Squawk from Jim Cramer: How Will Stocks React to Paris Attacks?

Following the deadly terrorist attacks in Paris this weekend, stocks are mostly unmoved but Jim Cramer doesn't 'see anything fundamentally to drive the market higher.'
By Rachel Graf ,

NEW YORK (TheStreet) -- At least 129 people have died from the terrorist attacks in Paris this weekend, but the stock market is not reacting as negatively as it has during past global tragedies. 

"With an event like this in Paris - it's a glum event, and you end up thinking, 'OK, what am I doing thinking about stocks?'" TheStreet's Jim Cramer said on CNBC's Squawk on the Street this morning. "With that attitude, you don't go buy a stock." 

You don't sell stocks either, he added. There has been an economic pause this morning.

The tracker industry is in "disarray" and Dillard's (DDS) stock is plunging after an earnings miss before the open, but there was not as much pre-market activity around these stocks as might have been expected, Cramer noted.

Although the attacks appear to be weighing on oil prices this morning, Cramer contended that supply fears are likely overblown. Global oil prices are impacted by Saudi Arabia, which will not stop production, he said.

"I think people felt that there has to be a geopolitical risk here - that something is going to happen in Saudi Arabia or Iraq," he added. "We're very egocentric in this country."

Perhaps unsurprisingly, one industry that is decidedly lower this morning is the travel and leisure market. "I'm looking at that whole group going down, and I'm thinking, well of course travel is gonna be down by this," Cramer noted.

Shares of Delta Air Lines (DAL), American Airlines (AAL), Southwest Airlines (LUV), Hilton (HLT), Priceline (PCLN) and Expedia (EXPE) all are falling in morning trading on Monday.

Separately, TheStreet Ratings team rates DELTA AIR LINES INC as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:

We rate DELTA AIR LINES INC (DAL) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its increase in net income, solid stock price performance, growth in earnings per share, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. We feel its strengths outweigh the fact that the company shows low profit margins.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Airlines industry. The net income increased by 268.3% when compared to the same quarter one year prior, rising from $357.00 million to $1,315.00 million.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • DELTA AIR LINES INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, DELTA AIR LINES INC reported lower earnings of $0.75 versus $12.29 in the prior year. This year, the market expects an improvement in earnings ($4.63 versus $0.75).
  • The debt-to-equity ratio is somewhat low, currently at 0.85, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.35 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • Net operating cash flow has significantly increased by 52.20% to $2,067.00 million when compared to the same quarter last year. Despite an increase in cash flow of 52.20%, DELTA AIR LINES INC is still growing at a significantly lower rate than the industry average of 136.48%.
  • You can view the full analysis from the report here: DAL

Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.

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