Higher rates vs. job growth

There's a tug of war going on between rising employment and rising bond yields.

By Jim Cramer Sep 5, 2013 9:43AM

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A woman looking at a washing machine in an appliance shop © altrendo images/Stockbyte/Getty ImagesThe winners keep catching breaks.

Micron's (MU) been a monster, but it cooled amid talk of capacity being added in DRAMs and Flash. But then you take out a big factory with a fire own by Hynix, a big competitor, and all of the people who thought it was rolling over, especially the shorts, get a huge jolt and it goes higher. This story feels a lot like the Thai flooding that took out capacity for the disk drives. I think that Sandisk (SNDK) and Micron can go higher.

Best Buy's (BBY) similar. How many people hated this stock going into this year? How many people had given up on this company? Today, it's Merrill Lynch going to "hold" from "sell." What's amazing to me is that these people all held out for so long with their negative views. It just never came in.

Or how about Ford (F)? This stock's been lagging badly of late as people figured rates are going higher here and sales in Europe aren't that strong. After sales number and the raising of production, you have a stock that now just looks like it's recharging.

This process of stocks that have been pretty much written off for coming back on good news is very bullish -- but also very lucky. If you get rates to stabilize and job growth remains positive, then you can stay lucky.

I am not sure about the bonds. I think that the bond sellers can come in on a dime and bang down whatever they want to. They are absent today despite strong data.

We've got a tug of war between rates going higher and job growth. The latter makes it so the hard-goods sales of Best Buy can still be so strong so that the sellers have to change their tune.

Job growth also makes it so that auto sales can stay strong. You need a car to keep that job, or those two jobs or three.

Lots of luck and lots of jobs vs. bonds and Washington. They just keep going at it. When the government looks functional -- as it does on Syria -- and bonds are tame, as they are today, the luck and the jobs win out.





Jim Cramer is a co-founder of TheStreet and contributes daily market commentary to the financial news network's sites. Follow his trades for Action Alerts PLUS, which Cramer co-manages as a charitable trust and has no positions in the stocks mentioned.



More from TheStreet.com

Sep 5, 2013 10:15AM
Dang Cramer, did you give up on the idea of writing a coherant article today?  It's like you just jotted down whatever musings popped into your head.

Broncos win tonite, but they may not cover.

Sep 5, 2013 11:47AM

Hmmmm, had me going right up until the part about:


"the incompetent village idiot being far, far away."


Lemme see; He is the President of the United States at a G-20 Summit in Russia.

You are;...Some Hack in your Mom's basement, beating on a keyboard and maybe other things.?

Yup, I truly see the connection and comparison, sitting way out here; And the "true problems"

with the Youth in America.

RESPECT IS EARNED, never given freely..


Sep 5, 2013 10:20AM

Guess we could have a good day....All news blasé, jobs seem okay, maybe expecting more.??

Less people applying for U/E.

No shots fired into Syria..

G-20 Summit...

Oil up along with Dollar..

And Gold/Silver down a smidge..

And the Sun is shining....

The World has not ended....Once again.

Sep 5, 2013 2:06PM

Couldn't go Golf...No money and couldn't find key to safe...Miss Lilly gone.

Now go pick some Sweet corn and garden work...


BTW.....Mirage, interesting

Hope some day you might be able to List Bush's accomplishments or mis-accomplisments.

We may find that more interesting and certainly REFRESHING.

Sep 5, 2013 11:50AM
Well, I think I will go golfing, just for the hell of it....I can't sway the Markets.
Sep 5, 2013 12:11PM
Good lord are we in a mix here on MSN or what.  We have some ten headers one discounting or trumping the other.  Just look at the diverse opinions.  I have been following bill gross for a hundred years and think he is fair and someone who I have relied  on more than most.   
Sep 5, 2013 10:26AM

According to the Puppy Picks on Jimmy Fallon....The Broncos are in..

Will make my one kid happy....He's probably wearing his Orange today.

Sep 5, 2013 11:35AM
Be very cautious today, yes, we are up about 50 points but this is not yesterday..Scumbags in no mood to let this markets go higher...Will not be an easy day....Pay close attention, plus volume still not good....The good thing is that the incompetent village idiot is far far away..Oh well, we will see what happens.
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