Thursday might have been a lousy day on the markets, but Jim Cramer said that does not mean investors should forget about all of the tremendous moves that occurred this week.
In the middle of the terrific rally on Wednesday that was triggered bythe Fed announcing it would raise rates, four very important stocks quietly made their way higher. These stocks did not rally because of the Fed—they did it all on their own.
“I think that action tells you not just what companies are doing well, but also what the market loves, which is very important to know on a day like today when it seems like the sellers have come back in droves to take profits on everything,” said the “Mad Money” host.
Stocks of General Electric, Honeywell, CVS and FedEx all flew higher Wednesday because of commentary from company management—not just because they were relying on the crutch of the Fed euphoria.
“I just wish that even a few more companies could say the same”
All four companies pointed out in their commentary that global growth is intermittent at best, and downright disconcerting on a day-to-day basis. Only domestic CVS did not need to focus on international weakness and its stock went to $97 a share from $92 partially because the drug store business is non-cyclical in nature, which is a great thing in this environment.
The second thing Cramer noticed was that these companies did not offer huge upside surprises versus expectations. GE, Honeywell and CVS simply confirmed what was anticipated for 2016. FedEx was the only one of the four that actually beat the quarter, but it didn’t increase next year’s forecast.
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Cramer believes that the reason why FedEx rallied was because it was downbeat in commentary back in October. It under-promised on pricing, and then over-delivered.
As for GE, Cramer regarded the move to multi-year highs after its analyst day was more of a celebration than a revelation. Now that it has removed GE Capital from weighing it down, investors realize that sans finance it is a beautiful stock to behold with wonderful organic growth.
“I think investors were generally thrilled to hear that in spite of the step down in the U.S. economy over the last quarter, GE was affirming what it said it could do the last time it reported. With this backdrop, that’s a win,” Cramer said.
Finally, Cramer found Honeywell’s monster stock run on Wednesday confusing. CEO Dave Cote was cautious about the economy at the company’s analyst day. But it did reiterate its organic growth forecast of 1 to 2 percent, and that was greeted with its biggest one-day gain in three years.
But the real conclusion that Cramer reached is what the market wants to hear from companies these days. It wants autonomy from the global slowdown, and the sense that it can triumph over the strong dollar, Chinese weakness and an overall sense of gloom independent of the Fed’s actions.
All four companies were simply applauded for putting out good numbers, which in this environment makes them part of an elite group that delivers no matter what.