Market trends show stunning flip-flops
Investors love the very companies they disdained just 6 months ago, and this turn of events is just getting started.
As I looked through the charts, I saw a stunning departure from anything I witnessed in 2012, or even since the bottom in 2009, for that matter. What I saw was money coming in to new themes to supplant the old.
First, let me tell you what's working: Housing-related names, such as Weyerhaeuser (WY), Lennar (LEN), Toll Brothers (TOL), Sherwin-Williams (SHW) and Mohawk (MHK) carpets, are still going higher. Same goes for hospital plays like Tenet (THC) and Universal Health (UHS), Becton, Dickenson (BDX) -- they all look great, as do their acolytes. There's tremendous interest in the high-growth pharmaceutical names, as well -- ones like Celgene (CELG), Gilead (GILD) and Allergan (AGN). These have supplanted the slower-growth dividend plays.
The market remains gaga over names such chemical plays that are benefiting from lower feedstock, such as Westlake (WLK) and Georgia Gulf (GGC) and Eastman Chemical (EMN). This is a sign that the horrible action in the natural gas stocks is justified. The ancillary home plays, as well -- the cable companies and their content makers, such as Comcast (CMCSA), Time Warner Cable (TWC), Time Warner (TWX) and Discovery (DISCA) -- they are all red-hot.
But you know what is getting killed? Anything purely domestic -- with no international upside -- that can't be directly linked to housing or any of these other sectors. Venture into the utilities at your own risk. Try to buy a dollar store. Slow-growth foods? No thank you.
It's incredible how little money is coming in to those. But there isn't enough coming out to explain the rallies. That's purely sidelined money that had been waiting for the election and the fiscal cliff to resolve themselves. These investors clearly aren't daunted by the debt-ceiling talks, no matter how the media tries to scare people into thinking they should be -- including articles I am now seeing, shameless articles, about Social Security checks not being delivered. Can we spare the drama, please?
There are two themes, though -- two incredibly powerful themes that have joined the others I have been crowing about all year: agriculture and emerging markets.
The first we saw coming when Mosiac (MOS) didn't decline after reporting a terrible quarter. Then Monsanto (MON) unleashed a fantastic number and that sent the group soaring, including FMC (FMC) and now Deere (DE), with the latter looking a lot like it could go to $100. (Thanks fellow Real Money contributor Matt Horween for that observation.) The group looks like it is generating a huge head of steam even as others would say, "You missed it!"
But the other real eye-opener -- in fact, a total stunner -- is that, after a four-year hiatus that began with the Great Recession, buyers once again want in to emerging markets. Take a look at the charts. The trucking sector, for instance, benefits from North American Free Trade Agreement (NAFTA) and Mexican exposure -- an economy that has to be one of the strongest in the world. Then there are the freight forwarders and international financials, and just plain old industrials and techs, such as Eaton (ETN) or Air Products & Chemicals (APD) or Cisco (CSCO). These stocks have suddenly gotten gigantic adherents.
As well they should, when you consider it. If you have Europe, Asia and Latin America coming back, you have a lot to choose from. Don't forget who benefits from these comebacks. You have companies like Ford (F) and Magna (MGA) that set out to make a lot of money in emerging markets and Europe, and got whacked for it. That's over. You have companies like Emerson (EMR) and Danaher (DHR), which have worked hard to be international. The information-technology sector is working, as are the construction companies that are benefitting from what looks like a calming in the Middle East.
This is a remarkable and stunning move. The market loves the very companies it disdained six months ago, when it wanted to be a domestic seller of cereal or apparel. Now it wants the more overseas the better.
It's a remarkable turn -- and, to me, it's just in its infancy, and it has much, much further to go.
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 WY, ETN and EMR.
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DLH....That would be a show of his, I might want to watch...
NOT TO BE MEAN....or anything...?
But watching Jimmy (Bobo) get all lathered up yelling and ringing bells and whistles going...
Someone steps from behind the curtain and tasers him...Drop him like a frog.
I think that would be a hoot...
What say you Mr. Cramer...a new idea for audience share?? Real reality.?
Same old gun control talk.......Since Reagan, just enforce the goddamn laws we already have..
This shidt is so easy...And all they do is just keep talking.
About something, they think is NEW.
One headline says something about the "slowing global economy" dragging on the market,well it isn't hurting oil,back on its way toward $100/barrel. What BS !
Well I'm firmly behind your Housing issues.....They have done fairly well, depending on the pick ?
Guess Pharma is another to consider, but research needs to be complete...
I like Med Device makers and Generic producers, but I'm sure their are other good plays, I just don't like speculating on the next best drug trial...
And everyone has to eat...
But I am not willing to buy at 52-72 week highs.
As far as Emerging Markets.....I will settle for Internationals, I believe they are sounder,with divs.
It's all ran by casino owners in Vegas !! It is designed to ONLY allow you to win enough to keep you hooked and playing ! ! ! Just like Vegas,people are smart enough to know it's all rigged and manipulated,but are stupid enough to think they can beat it.
Yeah, Steve.....I've also noticed that many people, singles some couples are getting these prefab mini houses of about 300-400 sq. feet...They are different and very cheap to maintain, heat or cool..
I find them interesting, but think most of the Companies are privately owned?
Guess people that live under bridges in cardboard boxes, had a good(?) idea...
We don't have that luxury (well I guess we do, not to sound snide) we have an old large farmhouse, remodeled several times, our living room is over 450 sq. feet and a large country kitchen, with a dining area...I'm not bragging, it's just an old country farmhouse and we are empty nesters, and very seldom use, heat or cool the upstairs...It's too much for Seniors living on fixed(more or less) income...
But I guess we are never going to move....
NTU...That does sound like an Eggs & Basket....
Even if we had it, I wouldn't put $5 million into ONE Company....
Maybe Warren and a few others can....But there are damn few.
Another reason I didn't like a lot of Mutual Funds....If you dug deep enough, many had some of the same or similar holdings....
"""First, let me tell you what's working: Housing-related names, such as """"
it's funny coming here and seeing the names that follow the quote all covered in RED negative numbers......
NTU....We use to do that with cattle too, along with hogs in a large stock or Horse Trailer..
After about 3-4 days it was easy...And they all thought they were going to Granny's Place..?
Yeah, Granny's Restaurant.
Easiest way to train horses to "trailer" also...But they always got to come back after a Show.
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The solid report comes a month after the retailer closed all of its Canadian operations.
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