The wrong stocks are going higher and I think that's taking us down the wrong path, says Jim Cramer
Speakers
Jim Cramer
— Host, Mad Money
Summary
Jim Cramer says the stock market is sending a troubling signal because leadership is coming from the wrong stocks even as the major averages are mixed. He contrasts this with a healthy bull market, where growth stocks lead a broad rally, transports and banks participate, and high-growth names like Eli Lilly keep rising. Cramer warns that the current leadership is taking the market down the wrong path.
- Dow slipped 42 points, S&P 500 fell 0.53%, and Nasdaq dropped 1%.
- Cramer says the wrong stocks are leading under the surface and he does not like it.
- A healthy market would feature a broad rally led by growth stocks, with cyclicals still higher.
- Transports should rally as a signal of economic health.
- Banks are especially important because their strength signals expanding businesses, credit demand, IPOs, and M&A.
- Eli Lilly's GLP-1 diabetes and weight-loss drugs are cited as a positive high-growth force.
- Cramer describes last year as a jovial bull market and says today looks different.
Ideas
Wrong leadership harms market path.
Cramer warns that the market is developing a bad thesis because the wrong stocks are going higher under the surface. He says this is not good and is taking the market down the wrong path, contrasting it with the healthier broad bull market of last year.
Transports signal economic health.
Cramer likes to see transports rally because they represent the health of the economy and are a key part of a healthy bull market.
Banks lead healthy economic expansion.
Cramer most likes to see bank stocks go higher because when banks are winning it signals expanding businesses, demand for loans, companies coming public to raise capital, M&A activity, and individuals borrowing for houses or renovations.
Eli Lilly GLP-1 strength positive.
Cramer says he does not mind when high-growth stocks such as Eli Lilly keep moving higher, citing its GLP-1 diabetes and weight-loss drugs as a positive.
