Tax deal is terrific for stocks
We needed a compromise on tax cuts and unemployment benefits for the market to go higher, and we have it. Now go grab some stocks.
Yep, this tax deal is terrific for the market. No doubt, though, someone will immediately sell on the news, saying it was "in the stock market." That it is the reason the Retail HOLDRs (RTH) is so strong or the industrials have been signaling it the whole time.
Ask the people who say this, "What is your exposure to the market? What percent net?" I am telling you that it will certainly be nowhere near 100%. Or 90%. Or 80%.
Not only is the deal good for stocks, it is bigger than even I (Mr. We Will Have a Deal) have been saying. It is truly better than expected. It is great, in particular, for the consumer-spending stocks and fantastic for gold, because it will cost the government more than $400 billion. That's what the two-year extension of the cuts and a payroll tax break will do to the budget.
You can see gold climbing huge on that, as anyone who was thinking there would be some sort of fiscal discipline with the Republicans in control of the House is just plain wrong.
I have been saying that we needed this tax and unemployment deal in order to go higher from here.
Now that we've got it, I am not going to turn around and say we are done for the year, even as I can already hear people say "Fade it" or "It is all phony" or "It is too inflationary."
Here's what I say.
There are still plenty of stocks that are not at all-time highs. There are still plenty of stocks that are not at yearly highs.
Get off the sidelines.
Pick some up.
And hope that the bearish investors and commentators can scare someone into selling so you can buy before they come in and cover.
Random musings: I want to thank, as always, my friend and colleague Matt Horween, who repeatedly told me there would be a deal, judging by the action in the market. Especially the Retail HOLDRs. What a call! Please put in for the Citigroup (C) offering. This is the growth bank, because it will be less than 50% domestic by the next reporting period.
At the time of publication, Cramer held no positions in the stocks mentioned.
Follow Cramer's trades for his Charitable Trust.
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Try as the bears might, they couldn't break U.S. stocks. But investors still face frothy prices and considerable headwinds.
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