Jim Cramer fills his blog on RealMoney every day with his up-to-the-minute reactions to what's happening in the market and his legendary ahead-of-the-crowd ideas. This week he blogged on:
- the beating financial stocks are taking;
- the innovation of U.S. CEOs; and
- how the extension of unemployment benefits will help retailers.
Owning Financials Just Got Even Harder
Posted at 12:50 p.m. EDT, July 23 How much harder can they punish these financials? How much worse can they make owning this group? It is almost as if they have become worldwide pariahs, stocks that simply can't be touched, that have to be written off and written off worldwide. As I see the stress tests unfold in Europe, you have the worst of all worlds: Half the people think they are phony and not tough enough, and half the people want to sell them because they are too tough and are going to force capital raises left and right. We know from when that happened in U.S. that you get hammered quickly, and who wants to get hammered? I don't know if they are tough enough or not; they don't seem so to me. But it doesn't matter. There's a split, and that's negative. > > Bull or Bear? Vote in Our Poll There are certain stocks that you need to have go higher in order to have a sustained move. You need tech, you need health care, and you need financials. Why? Simply because they account for too much of the S&P and are considered too important to the capital formation that the world needs. Anyone who owns a financial right now is taking his or her life in their hands unless they own a couple of regionals that are deemed "safe," like Comerica ( CMA), even if, if I might add, they aren't any good. Plus, as Tim Collins showed in my "Off the Charts" segment on Mad Money, nobody's bothering to discern now anyway. Credit loss declines should matter; they always have. But the investment banks with appreciable declines are trading like the bank index because of financial regulation, but it isn't like the market loves the others too; it just hates them less. Yes, Wells Fargo ( WFC) is up from when it reported, but the market was up huge yesterday, and on a make-or-break performance day it did nothing for you. So the lesson is, unless you own nothing but multinational stocks, especially with business in Asia, nothing is forgiven. The inverse is true, too: We forgive a Bucyrus ( BUCY) for missing because of China. Owning something that can't be forgiven is totally treacherous. Hence the financials. You own them, they will take the money away. Or at least it feels like it. At the time of publication, Cramer had no positions in stocks mentioned.