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:
- What makes this market so hard for sellers to keep up
- Why FANG is irresistible to this market
Click here for information on RealMoney, where you can see all the blogs, including Jim Cramer's -- and reader comments -- in real time.
Cramer: Sellers Can't Keep Up With This Market
Posted on Nov. 11 at 6:55 a.m. EDT
Could it be more all over the map? Disney's (DIS) bad, no it's okay, hold it, darn thing's strong with CEO Bob Iger calling a bottom for ESPN in the Q&A. Nvidia's (NVDA) off a couple with the rest of the semis, set up for a shortfall or a disappointment no matter what, and then the call begins and the CFO's talking numbers that make this thing look like Intel (INTC) after the 386 hit the ground running. As we say in Fantasy, Nvidia went off. (Click here to read the best piece on Nvidia you will read.)
Then, while we thought that Macy's (M) and Kohl's (KSS) were simply not as bad as expectations, Nordstrom (JWN) after the close just nails it, nails it better even than Matthew Boss said it would be, and that JP Morgan analyst has the hottest hand imaginable. Nordstrom is coming in hot to the holidays, with little inventory and the right product.
All in all, it was a fitting evening capping off a rotation that's so vicious that no one wants to get in front of this freight train unless they own FANG -- Action Alerts PLUS holding Facebook (FB) , Growth Seeker name Amazon.com (AMZN) , Netflix (NFLX) and Alphabet (GOOGL) --where the freight train is off the rails.
Who needs high growth from consistent growers on the side of Clinton when you can get metal benders like Parker-Hannifin (PH) and Boeing (BA) and Arconic (ARNC) for peanuts? And yes, that's Arconic, the better half of the smoke show that is Alcoa, a stock that's taking off on the back of the 14-day upwards streak in copper, the longest skein in the books for the red metal.
You know I had West Point cadets in town for Mad Money last night--hence my sparse filings--and off lone we were all marveling about the improbabilities of this rally and how it's going worst to first. There's the suddenly liquid Freeport McMoRan (FCX) .
There's the spring-in-the-step rails that carry coal and the concomitant crash in nat gas as the EPA's heavy hand now ends.
But the real irony of this Trump rally? Wells Fargo (WFC) . Now, I know Trump doesn't bank with Wells. In fact, in another ironic windfall, Deutsche Bank's (DB) his lender, but a week ago we were thinking of a House ruled by Elisabeth Warren with a President that would use Wells as the ultimate whipping boy.
Now, though? Wells is the golden boy, the one that everyone sold that's behind the group and about to get a rate hike that puts it in front. It's the ultimate worst-to-first.
I was asked if it's a buy and I said simply that at this point there are so many people who have given up on it because of the ethics issue, that it's probably under-owned.
And then the next four questions were all about equally under-owned stocks.
Which made me think that the hallmark of this rally is its "under-ownedness." Sure, Nvidia may be the exception, but yesterday's rallies came from under-owned sectors: retailers, banks, materials. These had killed your performance and could only get worse.
Now, there's not enough supply to go around. And the short-base didn't bother to cover. Where are those sellers of Wells Fargo, the ones who annihilated it down from $48 to $45, hitting it endlessly? Where are the sellers of Freeport? Boeing? Caterpillar (CAT) ?
These act like small-cap stocks, for heaven's sakes.
Somewhere, there must be supply. Somewhere. Maybe today?
But we keep blowing through levels--check out Bruce Kamich's stuff--and I keep thinking that there will be profits taken, but the issue is that the stocks are moving so far so fast the sellers don't even seem to have a chance to come the table.
It will be interesting today to see if Nvidia can't spark a reverse rally in the beaten-up techs.
In the meantime, if its under-owned--including Disney, by the way, where all of the smart money was saying ESPN's dropping like a stone--it's still spiking until that supply is at last brought out. If there is any.
It's likely that we see some by tomorrow afternoon. I wouldn't sell the opening, because there are too many still on the wrong side of the trade.
But ask yourself, after this improbable, one-for-the- books record breaker, you have to believe there's someone who bought Wells at $45 and now wants to exit. Someone who has Boeing at $135 or CAT at $84--remember that short?--who wants to take profits.
Who wouldn't want to go home with some winnings for the weekend, other than the people who have suffered through years of owning these stocks and aren't about to part with them after waiting in the wilderness so long for them?
It's just beginning.
Action Alerts PLUS, which Cramer co-manages as a charitable trust, is long FB, GOOGL, ARNC, WFC.
Cramer: No Matter What Happens, We've Got This
Posted on Nov. 8 at 1:03 p.m. EDT
Neither rain nor snow nor heat nor gloom of night will stay your Mad Money couriers from the swift completions of our appointed rounds.
What can I say? That's pretty much how I feel about tonight's election. It's an event, a big, bad one at that, but one that is manageable like everything else that has been thrown at me and at us as a country.
Why? First, I will give you a couple of reasons intrinsic to the stock and bond markets during this 61-year-old's lifetime of love for finance, and then we will speak about politics and the Republic to explain my expropriation of the U.S. Postal Service's motto.
Let's start with 1979, when I bought my first stock and the federal funds rate was 15%. Yeah, the one that's at a half of a percent now. The rates were high because we had terrible inflation. We have nothing like that now.
It was easy to throw your hands up and say nothing can work. You could have bought bonds. I found stocks, oil stocks. They were being taken over left and right and were a great hedge to inflation.
We killed it. Natomas. Gulf Oil. Conoco. A whole bunch of them. For the asking. There were a ton of mergers going on.
When I got to Goldman Sachs a few years later, the 30-year Treasury was at 14%. I bought a ton of them for clients because I sensed a bull market in bonds because the Federal Reserve decided to crush inflation. Those bonds recently came due. The investment of a lifetime made right when many thought we were dancing on the edge of the Weimar Republic and were going to go to Sears to get wheelbarrows to take dollars that lose value by the hour to the bank. They just came due. Who said the bull market had to be in stocks?
What about that nasty crash of 1987? I was in cash and then bought the heck out of the market. Doesn't feel like that to me now. Too much profit. Too low rates. Too middling valuations vs. the price to earnings multiple of 29.
Great Recession? Systemic risk. Banking system failing. Dominos of Lehman, AIG, Fannie and Freddie, Washington Mutual, GM, Citigroup. Usual cast of characters.
Dow gets cut in half.
We recommended cash to cash here before the crash back in 2008, saying to take your money out of the market. Gutsy. Good move. Then we said buy it back when the late Mark Haines, whom we respected beyond anyone else, said the market had bottomed. Why not crib from the best?
We don't have systemic risk. I don't see it under either candidate. But if we do, we will deal.
So, Exhibit A is that together we can handle anything the market throws at us. Does that mean we haven't screwed up? Far from it. Does it mean we will get it right this time? No.
What it does mean, though, is that in crucial turning points, we figured out where the bull market was in both stocks and bonds because we believe there is always a bull market somewhere and our job is to find it for you.
We will do so again. We will find things to buy and sell if the House and Senate go Democrat. We find things to buy and sell if Donald Trump is elected president. We will do that if Trump contests the election and refuses to concede if he loses.
We will do that because it is what we will do. It is what I have done since '79. I'm still around. Believe me, if I were a blithering idiot who hadn't made money for people since I was 24, I wouldn't be out here. Who the heck would listen to me? Oh, and you don't have to listen to me. I made a heck of a lot more money when I was buying and selling stocks for myself. I do this because I want to educate, teach and entertain. If I didn't, I've got a lot of other things I could do.
Now, for whatever reason, a lot of you will say, oh Cramer, shut up -- that gets said anyway -- we are talking about the Republic here.
Then let's review the Republic, let's talk about when we thought the center might not hold.
Want to start with the Great Depression? Like in The Sound of Music, that seems like a very good place to start. In September 1929, the Dow stood at 380. It broke down to 39 in July 1932 when we had demagogues trying to muscle into the White House and armed bands venting their frustration in ways we can only have nightmares about these days.
You got a quadruple in the Dow in five years while you waited for the center not to hold.
World War II.
In May 1940, when Germany invaded France and it was clear the French would fall almost immediately, the Dow was at 147. In April 1942, the Dow hit 92 when it was clear that the U.S. was going to suffer its worst military defeat in history, when it lost the Philippines, while the Nazis had some success in their spring offensive against the Russians, once again threatening to beat the only other opponent left besides the British and U.S. forces.
Tremendous buying opportunity. When it was clear we were going to win the war a year before it ended and we were already planning for the peace, the Dow hit 145 and it was off to the races.
How about Watergate, the worst presidential crisis of the previous century. The Dow fell from a height of 989 in June 1973 when we first figured out President Nixon was probably a goner, to 773 when he resigned in disgrace in August 1974 and then to 576 in the first seven months of President Ford's reign. It took out the August '74 resignation level a year later in July 1975.
Why go into all of these? Simple.
Because they are reminders that when the nation faced systemic economic collapse, political insurrection and instability at the White House and defeat militarily at the hands of the Axis Powers, there were opportunities.
I don't see any of that stuff happening. None of it. No matter who wins. No matter who contests. No matter how much anger and rancor there is.
How about this? You take it down enough, then sure.
So the appointed rounds await and we will deal with them swiftly and they aren't going to stop us from doing so.
Action Alerts PLUS, which Cramer co-manages as a charitable trust, has no positions in the stocks mentioned.
Cramer: The Market Just Can't Resist FANG
Posted on Nov. 7 at 2:39 p.m. EDT
Can you believe they come right back to FANG? It is amazing to me that a last-minute Hillary Clinton surge on the eve of an election--even if it is provided by an FBI green light--brings buyers right back to the Fab Four.
Let me tell you how incredible this really is. Two of the four had quarters that people thought were downright disappointing in their guidance. One of the four surprised you with decent earnings and some okay top-line growth but no boost in the forecast. The final one simply did the number and that's all there was to it.
And they were the first to be reached for. The first to be bid up.
Let's take them one by one, starting with F for Facebook (FB) . Last week, Facebook reported a stunning quarter with growth with a 59% increase in advertising spending. This is off a $4 billion base, not some small change amount. The Street was looking for $0.97 in earnings, and it gave you $1.09. Revenues were sharply higher than expected, $7.01 billion vs. $6.92 billion in an era where all we hear is that revenues are so hard to come by.
But the stock went down 5% after it had already dropped 4% from its high because the company wants to preserve the viewer experience and spend substantially to improve on video and next-generation technologies, which requires hiring the best people.
Now enough time has passed since that report last week that people realize no numbers were cut and things are looking pretty darned good for the company. In fact, I think people forgot why they sold it. So they come rushing back.
Amazon (AMZN) ? Same story. Miraculous revenue growth. Sales up 29% to $32 billion. But the company said it would be a spend year in order to conquer India. That sent the stock into a tailspin, plummeting $82 to $755.
Now we see the stock quietly coming back. Why? I think that when we look back at the earnings period so far we are blown away that a company that could make $140 billion in revenue could grow at that scorching pace.
Netflix (NFLX) went from $100 to $119 when it reported its quarter and then rallied for four days straight before peaking at $127. It then meandered down to $122 on nothing, no reason other than the market. It's an oddity here but, unlike Facebook, this company got a huge amount of credit for saying it was going to spend more than people thought. For some unfathomable reason Netflix is "allowed" to do so and can see its stock climb while Facebook can spend and get clobbered. No matter, this one's within striking distance of its high. It was the most damaged of the FANGs going into the year, so it stands to reason it has the most to catch up on.
Alphabet (GOOGL) , formerly known as Google, handily beat the estimates, $9.06 vs. $8.63 but it happened to report just in time for the Trump surge so its stock, rather than going up, actually rallied a tad and then went down, from $822 down to $781. I would put this one in the category that says it should never have gone down as many of its businesses, especially its mobile business, are very strong. The market took it lower.
Isn't all of this crazy? The answer is two-fold: One, absolutely yes. The market's ability to forgive and forget is legion. Second, though, in my 35 years of picking stocks I have always found this phenomenon to be the case. The favorite growth stocks stay favorites until they stop growing. None of these in retrospect stopped. They all shocked the Street. Their forecasts left something to be desired, but there were no number cuts. There was just a tailor-made selloff to buy.
And that's just what happened today.