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.

By Jim Cramer Dec 7, 2010 9:11AM

jim cramerYep, 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.


Jim Cramer is co-founder and chairman of TheStreet. He contributes daily market commentary for TheStreet's sites and serves as an adviser to the company's CEO.

 

Follow Cramer's trades for his Charitable Trust.


Related Articles

0Comments

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. 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 Morningstar Inc.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

116
116 rated 1
284
284 rated 2
461
461 rated 3
671
671 rated 4
628
628 rated 5
618
618 rated 6
615
615 rated 7
495
495 rated 8
347
347 rated 9
115
115 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
DYNDYNEGY Inc10
TAT&T Inc9
VZVERIZON COMMUNICATIONS9
EXCEXELON CORPORATION8
AAPLAPPLE Inc10
More

VIDEO ON MSN MONEY

ABOUT

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.