Stock charts show consumer pulse
Discretionary-income stocks like Williams-Sonoma and Best Buy are far more telling than consumer confidence surveys, and their charts say good things about this market.
By Jim Cramer, TheStreet
Whenever I hear the term "ailing consumer," I cringe. No choice. I am a stock guy, and while I can see data that certainly show weakness in the macro, data from stocks -- not the government -- inform my view.
That's all I could think about as I perused chart after chart this weekend. The strength in these charts is remarkable. Among the best names in the book are some of the most discretionary: Williams-Sonoma (WSM), for fancy housewares; Coach (COH), for expensive handbags; Starwood (HOT), for high-end vacationing; Ralph Lauren (RL), with top-notch apparel; and Best Buy (BBY), which hasn't quit since that good quarter.
There are others that could be considered "pulse" plays, meaning they show the consumer with a pulse, like Direct TV (DTV), Viacom (VIA.B) and Discovery (DISCA), three entertainment entities that you could live without.
It does not explain the high-end spending.
I think these signal a level of confidence that isn't talked about, that no one seems to think is possible, given tax hikes and unemployment and a housing market in which the pundits would have you believe 120% of homeowners are "underwater."
The movement in these stocks is far more important, for example, than any of these consumer confidence surveys that come up. People can tell surveyors anything. What speaks louder is all the money spent at places where people don't even think of going if they aren't doing well, like Williams-Sonoma, Coach or Best Buy.
With the exception of a couple of industrial skyrockets like PPG (PPG), Eaton (ETN), Crane (CR), Freeport (FCX), Eastman Chemical (EMN), Parker Hannifin (PH), Cummins (CMI) and Joy Global (JOYG), as well as the techs that are rising on takeover rumors -- mostly the security plays -- the charts of these high-disposable-income stocks bode well for this market's future.
At the time of publication, Cramer was long Cummins.
Click here to follow Cramer's Charitable Trust trades.
MORE ON MSN MONEY
Copyright © 2013 Microsoft. All rights reserved.
Quotes are real-time for NASDAQ, NYSE and AMEX. See delay times for other exchanges.
Fundamental company data and historical chart data provided by Thomson Reuters (click for restrictions). Real-time quotes provided by BATS Exchange. Real-time index quotes and delayed quotes supplied by Interactive Data Real-Time Services. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by SIX Financial Information.
The market's cheap money addiction is laid bare. No one knows how it will end.
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.