NEW YORK (TheStreet) -- 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 rally in banks, and
- Dealing with end-of-the-year bewilderment.
Click here for information on RealMoney, where you can see all the blogs, including Jim Cramer's -- and reader comments -- in real time.
The Real Banking Rally
Posted at 2:28 p.m. EDT on Friday, Dec. 5, 2014
Is the bank move real this time?
I think it is, and not just because they correlate with better-than-expected employment numbers.
It's real because the money has no place left to exploit. Right now, the banks are so far behind the market, you can find quality companies that have sat out almost the entire run.
What I like about today's rally in the banks is that it seems to be taking into account something other than just net interest margin (NIM).
For ages, since the Fed had decided to keep rates to a minimum, investors had focused on how much banks were making on their deposits, and pretty much nothing else. Except, perhaps, government investigations.
This time, though, the rally seems to be centered on which banks actually have growth, or at least have the best growth prospects, if employment keeps rising.
This brings me to SunTrust Banks (STI) . We've liked SunTrust for ages now, for the charitable trust. The simple reason is that STI does have among the best growth prospects for any bank, because it is in the southeast, and that area's been growing much faster than most other areas of the country.
However, that has meant absolutely nothing until, well, this week. It's almost as if people suddenly flicked a switch and decided, you know what, growth matters now, not net interest margin. If that's the case, who has the best growth? Well, it's SunTrust!
Given how closely correlated the banks are, I don't want anyone outthinking this: the group is making its move. That means the high-quality growers like Wells Fargo (WFC) and U.S. Bancorp (USB) , the two natural money magnets, will stay strong.
But before the obsession over NIM took over, you did tend to buy the banks that had the most robust geographies. And if that is the case, let me just say, on Suntrust's behalf, it does dominate lending in an area that has really begun to accelerate. Oh, and if you think you missed this once high-quality, high-octane growth juggernaut, it did trade at $90 before the Great Recession.
No, I don't expect STI to revisit that level any time soon, but it wouldn't be a stretch to think that it could see half of that in the not-too-distant future.
At the time of publication, Action Alerts PLUS, which Cramer co-manages as a charitable trust, was long STI.
There's a Lot Going On Under the Hood
Posted at 3:59 p.m. EDT on Wednesday, Dec. 3, 2014
Take some time off. Sit on the bench. Let someone else play.
That's one of the defining moments of the final month of the year, at least of a good year like this one. And while it's playing out in what seems like a bewildering fashion, it is actually anything but.
So let me explain. Here's a primer about what you see on your screen.
For days on end this market's been led by the stocks of companies with very little economic sensitivity. We have seen tremendous leadership from PepsiCo (PEP) , which has had a remarkable stealth run from the $70s, a move that picked up speed as the stock recently galloped from $90 to $100.