Contrary to common belief, the "big shake-ups" at
, the good numbers from
and the better numbers from
are not events that are driving the market this week, Jim Cramer said on his
"RealMoney" radio show Tuesday.
It is actually the options on ETFs and how the various indices are working that are causing moves in the market, he said.
Cramer owns Bristol-Myers and Goldman Sachs for his charitable trust,
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This means "the normal rules of a good company plus good results equals a good stock price, are not applying this week," Cramer said. Instead, the rally is index related and not stock specific, he said.
Looking at housing, Cramer said that despite all the negative news on the sector, "homebuilding stocks are not going down." In fact, some such as
are going up.
"The homebuilding stocks are rallying furiously because two bubbles, that factor heavily in the housing sector have burst," Cramer said.
First, the costs of commodities that make up the material to build a home, such as copper, steel, nickel and oil, have gone down, he said. In addition, there is a slowdown in the number of homes being built.
"With the economy and jobs and the population growing -- that should take out the excess housing inventory," Cramer said, adding that the bubbles bursting is a signal that the
might be done raising rates.
Cramer said he is calling a bottom in homebuilders.
"SUV owners are doing a happy dance as they go to the gas pump because the price of gasoline has fallen dramatically. Consequently so has the price of oil," Cramer said.
But how far down will oil really go? he asked.
as an example, Cramer said that although the company delivers its numbers selling at nine times next year's earnings and growing at 13%, "if oil slides, British Petroleum isn't going to grow at 13% or even at all. Therefore P/E analysis is irrelevant."
In addition, BP is too big to be taken over, Cramer said. It's worth more as "a whole company than a fragmented one."
Cramer also does not feel the company can boost its stock with buybacks because "there's too much floating out there." Therefore the only thing for British Petroleum to do is to raise its dividend to create a bottom in its stock, Cramer said.
However, while a dividend boost might stop the slide in oil, he doesn't believe oil companies will do this until "there's a new age of profitability out there, which means a threat to the oil supply due to terrorism or some geopolitical trouble, coupled with an incredible decline in the reserves," Cramer said.
Under and Over
Many market players may believe that it's time to get out of
since the company "blew away its numbers" but followed up with cautious guidance, said Cramer. But Best Buy is doing what is called a UPOD (overdeliver/underpromise).
Therefore, depending on the company, Cramer advised his listeners not to sell a stock simply if the company is cautious about the future after reporting a great quarter.
The boost from Best Buy is also helping
, which experienced some inventory problems due to a glut of big-screen TVs.
Motoring on to
, Cramer said that change is working for the company.
In contrast to mid-July, when the stock was hovering around $6 and losing market share, Tuesday Ford is at $9, he said.
"The reason for the gain is the changes it has in store," Cramer said. Ford has "a brand new CEO -- someone from outside the Detroit realm, and it has a plan to offer early retirement, buy out white collar workers and cut down output by shutting down factories."
Ford's move to $9 is a big deal, Cramer said. After all, whenever a stock goes up after bad news, it's a sign the stock is bottoming. He believes this happening to Ford.
goes down a dollar from where it is now, Cramer told a caller that he would bless it as an investment.
When the next caller asked about
, Cramer said that the management at the company "has got to go" as it also tends to overpromise and underdeliver.
He called JDSU the "single biggest disappointment along with
," and said there are better tech companies such as
that are worth getting into.
Cramer advised another caller to play out
, a stock he owns for his charitable trust,
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Cramer said that the stock, which was recently trading at $154.74, is worth $170.
Responding to a call concerning
, Cramer said "everybody who owns coal and oil stocks is selling them right now."
He told another caller that
business model is "absolutely terrific and it is without a doubt one of the best-managed companies."
After having a couple of bad months, Cramer said the company is "roaring back" and worth buying.
When a listener inquired about
, Cramer said retail is definitely picking up and that as oil is coming down, there's a sense that people should buy retail.
Cramer told a caller to "just buy Apple."
"Literally, buy anything in tech right now, because money is going out of oil and going into tech, housing, retail and drug stocks," he said.
Although he would normally refrain from recommending a stock on a takeover basis, the fundamentals at
"are excellent," Cramer said.
"You can own the stock even up two points," he said. Starwood was recently trading at $59.51.
At the time of publication, Cramer was long Sears Holdings, Goldman Sachs and Bristol-Myers Squibb.
Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for
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