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.

By Jim Cramer Jan 16, 2013 10:06AM

TheStreet logoArrow Up Photodisc SuperStockAs 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.

 

Cramer's face

 


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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77Comments
Jan 16, 2013 10:44AM
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The money in Arbitrage.  The long term outlook of most Americans has already been determined.  We are now a part of the world arbitrage.  Our economy is now dependent on the worker in China, India, Korea, and Mexico.  What ever country will allow their citizens to be coerced to work for is now a World wide program.  Did you see the pic of the air quality in Bejing last week.  Yes the quest for profits is now the sole detereminor of quality of life for citizens throughout the world.  We have  all the pressure literally of the workers of the world coming down on our work force.  Just how far will Americans have to fall before the gamble our Corporatist Political Representatives have signed us up for comes to fruition?  At some point our debt  spending to curb massive social unrest will indeed unwind.  The gamble of course is that eventually the minimum wage will be forgiven so these Internationals can indeed continue on and then as our economy goes throught the Arbitrage of realigning itself with the previously mentioned economies we will see Manufacturing and production return to America.  The gamble of course is will we have a country any of us can recognize at that point? So as excited as you can be Jim the pall of this Arbitrage process still exists, and will for some time be clouding our economic view much like the smog we see over Bejing.
Jan 16, 2013 11:02AM
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Comcast, Jim really.  Talk to a young person.  I do and soo many are dumping cable as it is pricing itself out of the regular working persons budget.  Notepads are so much cheaper than Comcast high speed internet.  I see cable becoming as extinct as hard line telephones.  When you pay for 1000 channels and you may watch 20 how long will people continue with this nonsense. Look for piece meal marketing to return to this Industry.  As budgets tighten cell phones and cable entertainment will be the first to be readjusted.  JMHO
Jan 16, 2013 1:17PM
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It is classic politics in a dead beat society.  Talk about anything but what they should really be talking about.  Did you see the feds are raiding the federal employees pension fund for 170 billion to keep the lights on in DC under the guise of making social secuity payments.  Now get this,  raiding their employees nest egg while we have massive corporate welfare.   But they pass it off as okay because they will repay those earned dollars with fiat dollars.  But then again no wonder they want gun control.
Jan 16, 2013 1:11PM
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I had a friend who was a hog farmer and when he needed to pay bills he would sprinkle a little corn in the bed of his pickup and let ten hogs climb in for a snack.  I'm sorry but this market right now seems to be very similar.  I am not taking that ride Jim.  JMHO
Jan 16, 2013 4:12PM
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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.?

Jan 16, 2013 3:54PM
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Ever heard that all boats rise in a bull market.  Well every once in a while someone comes along that seems to have all the answers about how and what to invest in during a bull market. .  I had such a friend who I totally admired and listened to intently every chance I could talk to him.  In the late 90's when we all waited for the Fed to do the interest thing every couple months none of us could even imagine the carnage that eventually happened.  Well getting back to my friend. He could see what was going on and at one point felt the time was right to take a rest and couldn't continue battling the bear so he looked for the safest place he could find and weather the final storm until things would finally turn around.   He lived in Texas and had attended many functions where Ken Lay was a speaker. He also had many contacts inside that company who swore up and down all was well and he felt totally confident he had done his DD.  To make a long story short he let his guard down for but a moment and had 450,000 shares of Enron at an average cost of 10 dollars a share when the truth was let out.  The man came down with Cancer and died.  He could never recoup at his later age and his pride and self respect were destroyed. So the moral being never ever let your personal discipline weaken to where you ever allow yourself  to believe what anyone tells you about any stock EVER!
Jan 16, 2013 1:11PM
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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.

Jan 16, 2013 10:36AM
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there's no "departure" going on.  there's simply a return of people into the market who were on the sidelines for years.  the "cash" is likely coming thru the mutual funds, so call up your buddies and ask them "why"?  it's likely due to the basics such as companies like Eaton or Emerson or Danaher being fundementally strong companies that MAKE SOMETHING.
Jan 16, 2013 12:23PM
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Nostredumbazz.....Now that is funny..eh.
Jan 16, 2013 12:01PM
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Can't wait to see the turn around today.So far this week the market has started off in the red every morning and by the end of the day back in the green.    What BS !
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 !


  
Jan 16, 2013 10:41AM
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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.

Jan 16, 2013 12:59PM
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Prez and Vice Prez speaking about Gun Control.....Here we go...??
Jan 16, 2013 4:37PM
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I think I've figured this Wall Street thing out.
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.

Jan 16, 2013 2:38PM
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Obama should have had the children sing "Dear Leader" at the news conference.
Jan 16, 2013 12:16PM
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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....

Jan 16, 2013 12:05PM
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More retro active "analysis" from nostredumb*ss cramer .......what next ...are you going to tell us who married prince william and what it means for us vis a vis the euro pound trade .....

Does msn pay for this or does cramer pay to get wall space on msn? 
Jan 16, 2013 1:28PM
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Own an index.  You don't have to screw around with flip floppers.
Jan 16, 2013 4:05PM
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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....

Jan 16, 2013 10:52AM
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"""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......

 

Jan 16, 2013 1:50PM
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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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