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What do people want, a Fed rate cut and great business results for U.S.-based companies? The reason we are getting the rate cuts is how bad American business is. The whole premise of the darned cuts is that the Fed finally grasped what we knew: Housing and retail and autos and hiring are all awful.
That's why it should not be a surprise that Target (NYSE: TGT) (Cramer's Take) and Lowe's (NYSE: LOW) (Cramer's Take) and Lennar (NYSE: LEN) (Cramer's Take) -- and I am sure Sears (NASDAQ: SHLD) (Cramer's Take) -- are all terrible.
Why is this revelatory?
Throughout the next six months, there will be many disappointing earnings. The cuts won't work their magic for that long, but there will be mucho gun-jumping. The reason I am profiling consumer companies that have moved their business overseas is because of this lag. These kinds of companies will continue to disappoint.
Lowe's blamed the weather. I would have rather blamed the consumer. Target? No blame. Lennar? Everything. Everything is to blame, with the new negative that existing homes are going down in price.
You need to steel yourself and protect yourself during this period. Ask yourself: Does the company you are investing in have growth or does it need the Fed to spur growth? If it has growth, then the growth will go for a higher price than it does now.
If the company you are investing in doesn't have growth now and needs it, you will have to trade around the position -- take profits on a little when the stock rises a bit, buy those shares back when they slide again -- or you will get hit upside the head with the kind of shortfall we got last night and this morning with these names.
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Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. At the time of publication, Cramer was long Sears Holdings.
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Reader Comments (Page 1 of 1)
9-25-2007 @ 10:30AM
Buffer said...
JUST RECENTLY MR. CRAMER WAS TOUTING A ROBUST MARKET.
WHY THE SUDDEN CHANGE?
9-25-2007 @ 10:29AM
investag8ting said...
They can cut rates to 0% but if people have lost home equity and can't sell their homes for what they owe on it, there will just be more forclosures. Add to that people with no excess cash won't be shopping anymore so it will effect our whole economy, not to mention it's effects on the global economy. American consumers are the most important data for our economy and for many other countries that export to us. The American consumer is tapped out and many are going under, the economies will follow the problem down.
9-25-2007 @ 11:07AM
W. B. Wilhite said...
Why don't the top few percent decide that their value is so awesomely wonderful that they deserve all of it? Why don't they just leave us in the sewer to grovel at their brilliant feet? We could build temples in their honor. We could sacrifice our first born. We could become the world. All they must do is command us to kneel. That's what is required before we may again rise.
9-25-2007 @ 11:55AM
michael schneider said...
Jim Cramer was just trumpeting retail stocks and then saying to buy everything and last night said to let the market pull back and buy nothing and now saying to watch out in retail. This is not the 1st time he got too excited about retail too early-- last year also being a bad call. However he has brought some of the stocks in niche areas-- my conclusion is to look at some of the stocks and then wait for the right time to pounce. There is a list of retail stocks recommended on Jim Cramer's Lightning Round at http://www.Barrelomoney.com. Moreover, I just posted a synopsis of this morning's comments by retail guru Dana Telsey and another analyst who provide some retail names that they think are attractive-- at (top of page, toward the right) http://www.Barrelomoney.com.
9-25-2007 @ 2:45PM
Don Clou said...
Friday, Cramer said he was looking at bear droppings; now everyone is looking at bull s::t. Yesterday, he told everyone to switch from savings to investing because even the hedge funds wanted in. If he wants a spike in consumer confidance and a consumer driven economy, he has to do two things. First, admit that thanks to a higher cost of living and stagnant wages the consumer is not willing to take on more debt(not even the 0% deals - i.e. rate cuts won't work.) Second, get his buddies on Wall St. to tell Congress to double or triple the personal exemption and standard deduction rates effective immediately. This will give everybody an immedite increase in take home pay and start a cycle of sustained growth. How about it? A tax cut to stimulate the economy. What a noval idea!
9-25-2007 @ 5:21PM
CoffeeandCigsNow said...
Outsourcing and war mongering has bankrupted America. Face it, tell the truth. It's our trade deficit and national debt(borrowing for war). We're sunk. No one is safe in this economy.