On Betting Against the Bonds and Panicking off the Fed: Jim Cramer's Best Blog

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:

  • How you can't bet against the bonds
  • How you shouldn't panic off the fed

Click here for information on RealMoney, where you can see all the blogs, including Jim Cramer's--and reader comments--in real time.


Cramer: You Can't Bet Against the Bonds
 
Originally published June 16 at 5:58 a.m. EST
 
I don't know about you, but I am so sick of arguing with the bond market. Every time we get a strong employment number like Thursday's weekly claims, I think to myself, the bond market just have to be wrong. Every time I speak to the big regional banks and hear about the strength in commercial lending, I think, the bonds have to be wrong. Every time I see all the economic activity around me, I say, they are dead wrong.

And, most important, every time I see the economically sensitive stocks go higher, I think, the bonds are out of their minds.

But then I remember what I learned my first week at Goldman Sachs: the bonds are the score. The score is never wrong. Whatever you may think about the work you put together, whatever you may wonder about how good your own mosaic is, you can't bet against the bonds.

We have seen so many swirling rotations in the last few days, but the only one that is really starring after this five-day rollercoaster is the money going into the foods and the drugs, the one that started as the minor chord of the rotational symphony and is now the major one. You know that's the bonds calling the tune.

How can you be sure? These days I like to double-check what's ever crazy enough coming out of Washington. Yesterday, the whole day, all I heard was that the President was going to come down hard on the drug companies.

But there were Johnson & Johnson (JNJ) and Eli Lilly (LLY) and Action Alerts PLUS charity portfolio holding Abbott Laboratories  (ABT) working their way up all day, as they have pretty much every day since this rotation began. These stocks have been incredibly strong. They plod, they don't jump. Yet, even when something fails to shine within the pipeline, like what's happening with Bristol Myers (BMY) , it still works higher.

It's been the most consistent trade of the week, and the bonds gave it to you on a silver platter. With the futures up today, it's a great place to look for something to own for a trade or, at this pace, an investment.

Action Alerts PLUS, which Cramer co-manages as a charitable trust, is long ABT.
 

 
Cramer: Don't Panic off the Fed
 
Originally published June 15 at 12:15 p.m. EST
 
If the Fed is being really tough, why is Boeing ( BA) going up? How can IBM ( IBM) be climbing? Why is Caterpillar ( CAT) finally breaking out?

I will tell you why. Because it has nothing to do with the Fed. It's the rotation: The rotation out of the highly valued, over-owned stocks that are temporarily overbought and into the stocks that do better in a global growth economy.

It is so tough to get people off the idea of the Fed as an arbiter of stocks.

I totally get the idea of the Fed perhaps selling its bonds first. That makes sense to me. But the idea that a quarter point rise with a decent menu of rate hikes is a problem with employment at a 40-year low?

I have no problem with that.

So, don't panic off the Fed. Understand that it's a long day. There are many cross-currents affecting this market--especially Kroger's (KR) stunning disappointment and Nucor's  (NUE) lapse. Although the latter, I love. (See our bulletins). NUE is a holding in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio.

But it's going to plan for the moment--the plan I laid out before the opening.

At the time of publication, Action Alerts PLUS, which Cramer co-manages as a charitable trust, was long NUE.

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