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Market players got what they needed from the
, and the market rallied today, Jim Cramer said on his "Mad Money" TV show Tuesday.
The Fed decided to keep the interest rate unchanged at 5.25%.
It's actually reassuring not to hear from Fed that things are falling apart, he said. At some point after Cramer shouted at chief Ben Bernanke to "open the discount window" and cut short-term interest rates on
"Stop Trading!" last Friday there was a shift. "We are now creeping toward a rate cut," Cramer said.
The Fed knows there's a problem, he said. "It's no longer in denial, and that is a pretty good thing to hear." It's a good thing the Fed acknowledged that the downside risk is higher and that credit situations have become tighter, Cramer said.
The market heard what the Fed said, and even though the Fed might not act for a while, the market now knows it will act.
The Fed also hinted at government intervention, he said. Cramer believes that the Treasury secretary -- or even the president -- can ask
( FNM), which was set up to relieve tight credit conditions for some households, to take action to avert a disaster. Cramer owns Fannie for his charitable trust,
Action Alerts PLUS.
Further, come October, the Fed should give a rate cut, he said. In the meantime, however, people still have to stay away from the three crisis points: the banks, mortgage lenders and homebuilders.
What should work now are the
, Cramer said.
He also likes sectors that are internationally levered, such as oil, infrastructure and agriculture, he said.
In tough economic times like these, it's necessary for people to pick up a defensive stock for their portfolios, Cramer told viewers.
is one such stock people should consider.
As the stock is up, Cramer advised against jumping all over it right away, recommending instead that market players wait for it to settle down before buying.
Unilever, one of the largest global producers of packaged foods, manufactures products that people are not going to stop purchasing even if the economy is bad, he said. Plus, because it's based outside the U.S., it's even less levered to the current domestic credit problems, Cramer pointed out.
The stock has a cushion -- a 3.6% dividend yield -- so in case the stock goes down, the yield will go up.
Moreover, Unilever is also a great turnaround play, he said. It reported a great quarter recently when the market was down, and no one noticed. In addition, more than a third of its sales come from emerging and developing countries. "It's a play on people getting richer around the world," Cramer said.
Companies that make people look good are companies that can make you money, no matter how bad the economy gets, Cramer told viewers. "Vanity is a constant theme on this show."
Growth stocks are back because the economy is slowing, he said. However,
hasn't been hot in 2007.
Monday the company came out and reported a better-than-expected quarter and raised guidance, but today it was "hammered," Cramer said.
On the pipeline side, Syneron is collaborating with
Procter & Gamble
to develop noninvasive skin treatments; separately, it's working on a fat-removal product. Plus, competitors have disappointed left and right, he said.
To make sense of why the stock is getting hit despite all the favorable news, Cramer welcomed Syneron's CEO Doron Gerstel to the show.
Gerstel said he believes that now is a "great opportunity" for investors to get into Syneron. "We see plenty of growth opportunities in the U.S. and in the international market," he said, as doctors and physicians are increasingly jumping on the "aesthetic wagon."
"The main concern the market has is that it's looking at the competition, and more and more companies are doing initial public offerings," Gerstel explained.
"They're worried about saturation in the sector. But we've seen a different situation."
Cramer called this a "real worry" and suggested that people wait for IPOs to happen to see if it puts more pressure on ELOS.
To view Cramer's interview with Doron Gerstel, please click here.
During his "Mad Mail" segment, Cramer read two emails he received from viewers thanking him for speaking up during last Friday's "Stop Trading!" and talking about the humanity of the mortgage situation.
"Thank you for your support," Cramer said. "I know I was
... but still am very proud of it."
Cramer was bullish on
Las Vegas Sands
Level 3 Communications
Cramer was bearish on
For more of Cramer's insights during the Lightning Round, click here
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At the time of publication, Cramer was long Fannie Mae.
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