Jim Cramer: The Achilles Heel of the Market Is Financials
What should we be watching throughout July as coronavirus cases in the United States keep going up, and we head into earnings season?
Jim Cramer gives investors insight on what he'll be watching.
"Throughout July, we're gonna have the regular earnings. So we'll finally have some data. I think that, I'll give you an example. Wells Fargo, okay, so Wells Fargo is up right now, all right? Now should it be up? Well, let's see, it's down from 54. It sells at eight PE. But I think it could be decimated by this move. Should it be down, if they cut the yield to four, I think the stock goes to 20. Or maybe 22, and that's an example, of when we start seeing the real numbers, I think that the fear is, and I said this last night, the real numbers, the fear is that the Federal, the Reserve says, You know what? Wells Fargo is a precursor about what's gonna happen. And so what we're gonna do, is we're gonna strip away the dividends, And we're gonna just have these companies just preserve capital. And if they do that, then these stocks are gonna go lower. And I've always said that the Achilles' heel of this market is the financials. So I am gonna be watching the financials like a hawk. Their report's July 14, 15. If they don't have really unbelievable things, good things to say, then you're gonna see the government say, you know what? You're not paying. And if that's the case, it's obviously very negative," said Cramer.
Watch the video above for more.