Cramer: What the Industrials Need

NEW YORK (Real Money) -- The rollover in the industrials is almost lockstep. It doesn't matter how well a company did, its stock is acting just like the others.

I didn't even realize how closely coordinated they were until I hit up the chart of Parker-Hannifin (PH), the excellent industrial with tons of aerospace and thought for a moment that I had actually punched in Boeing (BA). That's how much they looked alike.

But I might as well as hit up United Technologies (UTX) or Honeywell (HON), they are that identical.

This is an important concept to grasp, because they didn't all report the same kinds of numbers.

Honeywell, for example, blew the numbers out, raised the range and took off, only to come flying back to earth in the last week.

United Technologies gave you a good, not great, quarter and sold off immediately. It continues to do so right now. Boeing gave you what looked to be an amazing quarter, one that caused the stock to gap up before the opening only to plummet pretty much daily. Everything, from execution on a big defense project to order degradation versus Airbus, rocked the stock. Neither Boeing nor United Tech gave you the kind of big operating cash flow numbers that make you feel they are standing there buying back shares because they are brimming with cash.

Parker-Hannifin was just mystifying. People simply couldn't figure out why the company didn't make more money, given across-the-board robust order growth.

Now you can make a case that PH, UTX, HON and BA were all hurt by one aspect of their businesses: defense. When I read through these calls, it is pretty clear that the sequestration hit all of these companies to varying degrees and the street just hadn't figured out the amount and was genuinely unpleasantly surprised by the numbers. Boeing compounded it by some errors in execution. PH seemed to be faulted for poor communication about its issues. I don't even think that UTX did that badly in defense, but nothing seemed to make up for it. Honeywell's was as expected.

But the common ground here seems to be one thing and one thing only: the buyers and holders of these stocks no longer believe that the aerospace cycle is a tailwind. Whether it be because of a fear factor -- MH-17, rockets over Israel or Ebola -- or because of increased insurance rates -- the airlines are being viewed askance, and that's translating into a belief that the cycle's not pausing, it's just over.

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