The pain of the aftermath of mark-ups never goes away. We knew what was in store for us, as the mark-up folks don't like to play on the last day, especially with the newly vigilant Securities and Exchange Commission. I have to believe that this SEC will now become more interested in "the tapes," which would show clients asking brokers to take stocks up as much as they can, something that we know is against the law.
What comes up from mark-up must come down, and the most important "come-downs" should be in the industrials, because we have the least visibility in them. I do not believe the techs have as much to worry about, nor the banks, because both have excellent earnings prospects for the coming quarter. Why sell Apple (NASDAQ: AAPL) (Cramer's Take) here? Why sell Microsoft (NASDAQ: MSFT) (Cramer's Take)? And why dump Wells Fargo (NYSE: WFC) (Cramer's Take) or Bank of America (NYSE: BAC) (Cramer's Take) or JPMorgan Chase (NYSE: JPM) (Cramer's Take) when those have the best possibilities of good news ahead? I can see locking in some Goldman Sachs (NYSE: GS) (Cramer's Take) gains, but that's going to be the best quarter of all.
The oils are due for a hit on the price of crude, but they have just been waffling around here. I can see a further pullback to levels of last week, particularly with Chevron (NYSE: CVX) (Cramer's Take), Occidental (NYSE: OXY) (Cramer's Take) and almost all of the natural-gas stocks.
I would go back to the accidental yielders like Emerson (NYSE: EMR) (Cramer's Take) and Honeywell (NYSE: HON) (Cramer's Take), and I would look to build Paccar (NASDAQ: PCAR) (Cramer's Take) on some truck numbers that should be favorable next week.
The defensives, the Pepsis (NYSE: PEP) (Cramer's Take) and General Mills (NYSE: GIS) (Cramer's Take), remain incrementally positive for the quarter, so I do not foresee a lot of profit-taking occurring.
I figure we have to roll back prices a bit, but not that much, before natural buyers come in later in the week, given the tremendous performance for the quarter. Also, we could see an avalanche of new money seeking returns in stocks bolstered by lower mortgage rates that could spur another round in housing and an automobile build that could offset some but obviously not all of the unemployment ahead.
Jim Cramer is co-founder and chairman 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 Bank of America, Chevron, Emerson, General Mills, Goldman Sachs, JPMorgan, Pepsi and Wells Fargo.
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Reader Comments (Page 1 of 1)
7-01-2009 @ 1:16PM
Jeff Iedge said...
What is he really saying in this piece? It seems to be the typical hedge of "prices might roll back, but only a little bit". People clamor to hear the "experts" prognosticate and hedge at the same timeso as not to let on that they really know no more than anybody else what the market is going to do. I guess it is safer than to make strong calls(Bear Stearns) and have paople start to querstionwhy you are paid so much for saying so little.