Jim Cramer -- Banks Could Survive the Bear Going Into Earnings
Analysts have been warming up to certain sectors such as the airlines, and it will be interesting to see if they upgrade commodity companies such as Freeport-McMoRan (FCX) - Get Report , said TheStreet's Jim Cramer, co-manager of the Action Alerts PLUS portfolio, on CNBC's "Stop Trading" segment.
Why is this important? Because if analysts start upgrading companies like Freeport, banks start to look good in the loans made to such companies, Cramer said. The bear thesis against the banks has been credit quality and the loans to companies such as Freeport-McMoRan and Cliffs Natural Resources (CLF) - Get Report .
But if these companies in troubled sectors are upgraded and the strong employment outlook continues, banks could have some upside going into earnings, Cramer reasoned.
He noted that this would be despite the low net-interest margins the banks have as a result of continued low interest rates. So the billions of dollars worth of loans made to these companies may be better of than investors assume.
If that's the case, the bank stocks could clear a big hurdle, Cramer concluded.
At the time of publication, Cramer's Action Alerts PLUS had no position in companies mentioned.