Sectors on the cusp of big breakouts
7 financial and homebuilder stocks to watch for, plus a bonus one.
It's all on the banks and the homebuilders. Both groups are on the cusp of what looks like some serious breakouts, and the bulls need them both to get over these humps if we're to see the broader market punch through to the highs.
The leadership is challenged right now, because it is no longer a united front. All the foods and beverages and drugs had gone higher since the year began -- but now, when we see the quarters, we don't like the coloration of many of them. We have decided, for example, not that the environment is hard, but that it's harder for Procter & Gamble (PG) than it is for Colgate (CL). We like Bristol-Myers (BMY) and Pfizer (PFE), but they are not immune to valuation or drug denials, especially after they have outrun their yield protection.
Do you really want to pay $50 and change for General Mills (GIS)? Wouldn't you rather the company first put on another good quarter?
But the banks? We look back and we think, "How bad were they?" We begin to wonder: Have they gotten too cheap, given how strong housing is? The housing shortage is becoming so palpable that people are beginning to say, "Wait a second -- this group keeps putting up the numbers. Maybe the valuations aren't so wacky."
I know the charts look fantastic for the banks, and I am drawn to PNC (PNC), which has put in a terrific quarter, as well as JPMorgan Chase (JPM), which we are buying for the Action Alerts PLUS trust, and KeyCorp (KEY), which looks like it is going to go about $10. I think Wells Fargo (WFC) is resting for its next move, and Lennar (LEN) and Toll Brothers (TOL) are way too cheap. Pulte (PHM) may be the best in show, and the stock has rested from its mighty move last year.
These are the stocks to watch going into the end of April. New leadership should emerge now, or the market will not punch through those highs anytime soon.
Here's one other to watch (heads up to bearish Doug Kass!) -- Berkshire Hathaway (BRK.A/BRK.B), both a financial and a homebuilder, looks ripe to go higher. It's a nice hybrid that will have to be repulsed at the gates if the bears are to have any luck rolling back this move.
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 is long JPM.
More from TheStreet.com
how's housing going to boom when jobs and job salary's are still pathetic?
are you saying "we" should hope that 1% of the population with the cash should start (continue) buying up alll the home inventory for rentals? therefore we should become a rental home society?
Why we all need to stop listening to Cramer...
Let's assume all business sectors are on the verge of break-out boom times. If so, every single one of them is grossly under-staffed and incapable of sustaining any type of tangible activity (inspite of what any administrator claims). The cost of on-boarding, ramping up coordinated efforts will be expensive. The threat of global blindsiding in any ramp-up is expensive. The cost to convert negativity and distrust is expensive. In short, the stock prices we see today will succumb to natural gravity and compress at a hellish pace. It's inevitability, not a forecast or speculation. When you read about how cardboard cut out business platforms are ready to do this or that... look out your window. Everyone who could would and should be working right now-- isn't. All you have is the administrative shell that is incapable of doing--- because it isn't a doing body, it's an administrative one. FACT-- when you tackle a cardboard cut-out, it folds up, it doesn't withstand the tackle. Jim... take a few days off and have your head examined.
The consumer is the king and with most having less buying power today the future is not looking good.The government and wall street can twist it anyway they want to but it is not going to make a difference until we get REAL growth. We have been told for months that the consumers were back,housing was picking up,corporate earnings are up,unemployment down and out comes the GDP at 2.5 and we all know it will be revised downward.Ben and friends better rethink their current plan if this is the bang we are getting for all those bucks.
CONgress, having been warned that stalled air travel might strand
them in D.C for too long, has finally passed a bipartisan bill to allow
the FAA to be able to adjust their internal budgeting enough to resume
traffic control at the towers.
Hooray for you CONgress. Always ready to do the right thing
so you can get a head start on your vacations. Its nice to know
there is consistency somewhere.
Happy weekend all.
Blow'em.....Why are you on here today??
I figured you and your friend (cough,cough) Mr. Brucey would be at the Club..
Frolicking in the Indoor Pool and Sauna...(cough,cough)
Then having Watercress sandwichs and Crabcakes, washing it down with Ripple 1999 vint...
A hardy har, to you; Have a nice weekend...
Cramer Cramer Cramer
Housing is not going to go boom as no one can afford to buy a new house nor qualify for a new loan on an existing house as most of those jobs that we have created since 2008 are minimum wage jobs with the people living on food stamps.
Also the current boom is coming to a halt as the government just announced that Fannie and Freddie are not loaning money unless it's on your primary house that you are going to live in. So they have decided to shut the gate to investors they opened earlier this year to jump start the housing sector.
Expect housing to drop to zero soon.
As far as the banks go. Hmmm their life line is still the Federal Reserve buying $85 billion of stocks and bonds each month. But soon QE3 is going to come to a crashing halt. The rest fo the world is either now trading in Chinese RMB or soon will be at which time the dollar dives to just about zero value.
Expect the banks to go bankrupt soon and this time there is no bailing them out.
Jimmie...Has a tendancy to do that every few days...
Gives you a few "hot tips" that are "no brainers."
But as always; The research, decision and money is YOUR'S to make or lose....Not HIS.
"DETROIT (AP) - General Motors said Friday that a base model of the 2014 Corvette Stingray will start at just under $52,000."
Four TIMES the average wage in Detroit right now. Weren't we running out of gas in 1999?
Strange end to the week. A few bucks here, a few bucks there. Probably mow the lawn this weekend. Nascar race is on Saturday night instead of Sunday in the day, so probably watch that and barbecue. And have a few glasses of ice cold delicious Carlo Rossi Sangria. Hopefully the President won't make any speeches this weekend, we all need a break from that.
Good luck. See you all back for the next Jubak / Cramer / Mirhaydari article. Do they have to spend their weekend writing an article? <eerie background music>
Although I may not agree with some of the picks..? I believe he is right, that over the next couple quarters some of these will do well...The "big if" is a correction, a small "short lived" recessionary trap.
Others, are such things as "shadow inventory" or "foreign investments."
We are already seeing, money and wealth buying up some properties, along with realtors trying to increase prices, by touting demand for some of the foreclosures, that are better properties..
I have yet to figure out, the demand cycle for "newly built" homes, while we still have a glut of empty homes setting here and there.
Throw the TV....Yeah, a couple near us for years, very efficient..
But going back a few thousand years, we just called them Caves..
But now they have prettier windows..
The South Western Indians called them Cliff Dwellings..
Steve....Those really sound more like "Bunkers" to me...
You all have a nice weekend.
Yup not too bad of a day...Yes COP was cool....overall ports Dropped a little today maybe ?, but it was a great week.
Toodles for now..
Copyright © 2014 Microsoft. All rights reserved.
Stocks drift lower and bonds are hit as investors await the Fed. Prepare for higher volatility this week.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.