Count on China to do it right
It's applying the brakes to lending, but have faith: The country knows how to manage its economy.
By Jim Cramer, TheStreet
The world is not in good shape for a Chinese hard landing, but when you read about a total lending halt in a country that's growing at a 10% clip, you have to be cautious.
That's today's setup, and given the grand theft of the Scott Brown rally, you could see why we have the right to sell off and repeal some of the rally we had in the more cyclical areas.
It makes sense. Anyone on the Parker Hannifin (PH) call
Tuesday knows that the good numbers -- and they were very good -- were driven
In fact, that was really the only strong area for this worldwide manufacturer of heavy industrial parts, save life science. I think much of the positive guidance presumed a nascent recovery in the U.S., Europe and Latin America and a continued strong recovery in Asia, led by China.
Without that the big guidance, the bump might not have occurred.
So why not join Doug Kass in saying "Sell the news"? First, I was a believer that health care Johnny-come-latelies would come in and buy. They did that Tuesday, which is why I said to sell the drug companies. But second, I actually have tremendous faith in the Chinese to do it right, to slow it down right. They deserve that faith. They are very good at managing their economy.
So I expect that we will, after a momentary hiatus, come back to a world of a price-to-earnings raising stalemate out of Washington and some earnings that are going to be better than people thought that will be strong enough to overshadow China going from 10% gross domestic product to 8% to 9%, which is the targeted rate anyway.
At the time of publication, Cramer had no positions in the stocks mentioned.
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As geopolitical tensions threaten to spin out of control, investors are wondering how best to position their portfolios for the global turmoil.
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