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TheStreet.com's Jim Cramer tells you he wants to own companies that make stuff that gets bought no matter what and that don't have outrageous raw costs.
We are holding by the strikes, so typical of expiration week. You get a floor on Intel (NASDAQ: INTC) (Cramer's Take) for certain, maybe catch a bounce. Obviously, people listened to Intel last night when it said PCs weren't a problem, but it traded at $42 last night and I fear that it could trade lower and would be trading lower if it weren't for the $45 tug.
I don't like the tape and feel that we are underestimating the CITs (NYSE: CIT) (Cramer's Take) and the Ambacs (NYSE: ABK) (Cramer's Take) and overestimating the power of a JPMorgan (NYSE: JPM) (Cramer's Take) or a Wells Fargo (NYSE: WFC) (Cramer's Take) to make a stand.
Here's what I am watching, though: Coke (NYSE: KO) (Cramer's Take), MO (NYSE: MO) (Cramer's Take) and the Drug Index, the DRG. As soon as everyone knows we are in a recession, then these will be bought again. I pick those because they have the least inflationary pressures. Allergan (NYSE: AGN) (Cramer's Take) holds up and Schering-Plough's (NYSE: SGP) (Cramer's Take) trying to bottom; good signs, again.
I am also watching General Mills (NYSE: GIS) (Cramer's Take) because it has a good yield but has high inflationary costs. If it can hold, that again shows that you can play some defense while we wait out the bear.
And I am watching BUD (NYSE: BUD) (Cramer's Take) to see the potential worth of SAB Miller as it becomes unstuck from Altria.
Need to find some bull markets within the bear maw. The stocks that work in a deflationary environment are those that make stuff that gets bought no matter what and that don't have outrageous raw costs. The fact that GIS/BUD can stabilize shows that we are struggling to a recession consensus that can only help things while everything else in finance goes kerflooey.
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 Altria and Schering-Plough.
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Reader Comments (Page 1 of 1)
1-17-2008 @ 3:06PM
Scott Cacciatore said...
Scott Cacciatore says sell the financials:
Citibank again is trading lower today along with JPM and almost all of the financials. Citibank has lost almost 5% and is trading at $24.93. Technical analysis says keep selling Citibank because there isnt any support until maybe the $20 level, and there isnt even that much resistence at that level. If we combine technical analysis along with the fundamentals its obvious that any investor or trader would want to stay away from Citibank.
JPM is in better shape compared to Citibank because their risk due to the mortgage crisis is far less then Citibanks. JPM did announce a decrease in earnings by over 34% as compared to the same quarter in 2006 but compared to the other banks, JPM actually performed better. JPM did announce that they expect losses from credit card defaults to be much higher then expected in the coming quarters. The problem for JPM is that everytime a company in the financial sector releases bad earnings it will in turn knock down JPM's stock price. Today Merril Lynch announced a net loss of over $12 per share and analysts predicted it was expected to announce a loss of $4.57. These of course are analysts that get bonuses of multi millions of dollars to make these types of estimates. I mean if an analyst can make millions of dollars to make estimates that are off by over $7 per share, thats a job that I would love to have. I think I can throw a dart at a board and come closer then most of these analysts. The bottem line is that with all of the financials missing their estimates by so much I just cannot see any of their stock prices rise in the near future.
JPM keeps testing the $40 support level. Once JPm breaks down below $40 on strong volume, I would expect the stock price to drop to $33-$35 rather quickly.
Scott Cacciatore signing off until tomorrow