When Stocks Talk, Cramer Listens
By James J. Cramer
8/4/00 2:23 PM ET
Why do the banks matter? Because there are tons of older guys like me who sit
there and say, "I love it when the financials go up because it says that inflation is
under control, interest rates are benign and credit risks are manageable and
reasonable."
That's a mouthful. Let me hash it out a bit. Stocks speak. Sometimes they speak
loudly. Some stocks speak for more than themselves. Let's take Citicorp
(C:NYSE - news - boards), which we are long. Let me tell you all of the things Citi
encompasses for the market.
If interest rates are about to go wacky on us -- spike radically -- you might be able
to see it coming by watching the action in the stock. It tends to give you a
heads-up on rates. But it also gives you a heads-up on stress. If there is some
area of the world that is shaky, this stock signals it. Same with the consumer. If he
is about to take a dive, Citi's stock might give you a hint.
Conversely, a rally in Citi speaks loudly. It says that things are OK for financial
assets. It lets you feel better about all stocks. (You sure wouldn't feel that way if
Schlumberger (SLB:NYSE - news - boards) or Unocal (UCL: - news - boards)
spiked, would you?)
So, when we see Citi go to a 52-week-high, that's a clarion call, a bellwether for the
rest of the market.
Hence our more bullish stance.
thestreet.com
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Starting to keep up on news of this company.
Jack |
