Cramer: There Are Powerful Themes in Several Bull Markets

 | May 08, 2017 | 6:27 AM EDT
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You look at the highs taken out in the last week and you are astonished at the breadth of success in so many sectors, including sectors notoriously antagonistic to each other. You see utilities and insurers running at the same time the biggest industrials are galloping higher. You see some health care stocks, but they are really only the devices and health insurers that could stand to do better under the repeal of the device tax. These would normally indicate that the consumer may have slowed down or a recession might even beckon. Until you see all the stocks on the new high list that are associated with making your home into a more valuable property.

Then there's travel and leisure coming on strong, which could be a sign that perhaps some people are either having all the material needs satisfied or they are seeking an experiential moment to put on their Facebook page or Instagram or Snap. Line those up with the beauty stocks, and you can see that going out and doing things remains hot as smoking machine gun barrel. We can include the casinos, now, too.

But so are the stay-at-home stocks, such as Domino's Pizza (DPZ) and Constellation Brands (STZ) -- buying beer for the home -- and the home-gaming stocks.

The data centers stocks are still strong, as are the tower stocks and the cloud-based enterprises. Same with the cybersecurity and semiconductor equipment stocks.

It's a motley group, but more importantly, it's an exceedingly broad group.

Let's go over some of the names to flesh out these bull markets and make it clear how powerful these themes are.

The biggest themes are the insurers, industrials and health devices.

It pretty much doesn't matter what end of the insurance business a company's in: you have classics like Chubb (CB) and Allstate (ALL) and Prudential (PRU) . But you also have brokers/risk managers like Marsh & McClennan (MMC) and AON (AON) . It really doesn't seem to matter. Ironically, the hedge fund favorite, American International Group (AIG) , isn't on the list.

I think I could pretty much list every industrial, the move is that broad. You have the largest like 3M (MMM) , Honeywell (HON) and United Technologies (UTX) . But you have tons of nuts and bolts companies, like Illinois Tool Works (ITW) , Eaton (ETN) , Parker-Hannifin (PH) (perennial there) Crane (CR) , Ametek (AME) , Amphenol (APH) , Pentair (PNR) , Praxair (PX) , Air Products (APD) and so many others.

In fact, the ones that aren't stick out like sore thumbs: General Electric (GE) is the most obvious. We own it for Action Alerts PLUS and it seems almost forlorn, a statement that it simply can't be as well run as others. Many of these companies have sizable overseas businesses, which could be the kicker no one is counting on, as well as a weaker dollar, which is an additional spur.

I know these stocks have the appearance of Trump stocks, but they've gotten no help from the administration to speak of -- they are not natural resource-based. If anything, these are all candidates to slash and burn American factories and move them overseas -- something that now seems to be a bygone era.

There are so many medical device and diagnostic companies, as well as companies with tools to develop drugs, that it is tempting just to buy any that aren't on the list -- like Medtronic (MDT) -- betting it is just a matter of time.

Illumina (ILMN) and Thermo Fisher (TMO) stand out as classic tool examples. Abott Labs (ABT) , Boston Scientific (BSX) and Baxter (BAX) are prototypical devices makers. Intuitive Surgical (ISRG) has, for years, been a standout. However, it is only recently that Hologic (HOLX) has been strong. Stryker's (SYK) a new one after stumbling. Quest Diagnostics (DGX) seems to have gotten its footing when it became clear that Theranos wasn't a real threat.

One look at the outsized strength of the stocks of Aetna (AET) , Anthem (ANTM) , Cigna (CI) , Humana (HUM) and UnitedHealth (UNH) tells you who the winners are in the repeal-and-replace movement, like we thought it could ever be anything else. One of my favorites, Centene (CNC) , seems to be winning, too, even as it was the one that had figured out how to make money in the exchange movement. I have to believe all of these companies will benefit from not being under the watchful eye of the government.

You would think the home story would eventually run out of steam, but the lower rates swept it right back up. Remember, it isn't the home builders per se, but the accoutrements and providers, basically everything you can get at a Lowes (LOW) or a Home Depot (HD) : Sherwin Williams (SHW) and PPG (PPG) for paint, Masco (MAS) and Fortune Brands Home and Security (FBHS) for kitchen and bath, Stanley Black & Decker (SWK) for tools (what a monster), Mohawk (MHK) for carpets, and Briggs & Stratton (BGG) for lawn mowers and power washers.

Sometimes, I wonder if a combination of Trump's travel ban and a fear of Airbnb had reduced the travel, leisure and hotel market to its knees. Now the fear has vanished, so Priceline (PCLN) and Expedia (EXPE) shine, while Marriott (MAR) and Marriott Vacations Worldwide (VAC) (although it suffered a tough Friday) and Wyndham (WYN) are amazingly strong. Every cruise line -- Carnival (CCL) , Norwegian (NCLH) , Royal Caribbean (RCL) -- just seem to know no limits.

Interesting that the airlines aren't there, but they have too much capacity and the others obviously have too little or no competition. The casinos are all flying again. MGM Resorts (MGM) had missed because of some surprising upfront costs for its Washington D.C. casino, National Harbor, but those are behind it. Wynn (WYNN) and now even Las Vegas Sands (LVS) are doing much better.

There are some contained bull markets like video games, notably Activision Blizzard (ATVI) , Electronic Arts (EA) and Take Two Interactive (TTWO) . Again, it doesn't seem like there's any price that's too high for these to go.

You can't stop the three cellphone towers: American Tower (AMT) , Crown Castle (CCI) and SBA Communications (SBAC) . You can only imagine how much more tower space you need with these unlimited packages. If you don't, T-Mobile's (TMUS) John Legere will shame you into it.

The semiconductor boom-bust cycle is in boom mode, which is excellent news for Applied Materials (AMAT) , Teradyne (TER) , KLA-Tencor (KLAC) and Lam Research (LRCX) . I think these stocks must be heavily shorted as people wait for the bust portion of the cycle to take hold. Talk about sucker's bet.

There are some real estate investment trusts that are strong, including apartment REITs, but the stars are Digital Realty (DLR) , which is last mile warehousing for e-commerce and CoreSite (COR) and Equinix (EQIX) , the data farm warehouses. The big cloud companies need these farms so badly, they can't only build their own.

Cloud's still rolling, and if you can insinuate yourself into the cloud, you are now getting special status. Pure plays RedHat (RHT) , Salesforce (CRM) and Adobe (ADBE) share the platform with Oracle (ORCL) and Microsoft (MSFT) .

The endless love for anything payment processing seems patently absurd to me, but they all have growth: Mastercard (MA) , Visa (V) and Paypal (PYPL) are all obvious. But how about Square (SQ) , Global Payments (GPN) , Equifax (EFX) , Alliance Data (ADS) and Fidelity National Information Services (FIS) ? These all look like pseudo-banks to me.

We expect a great deal from Apple's (AAPL) iPhone 8 and we are already getting good numbers from the Samsung 8 and it's reflected in the strength of both parents, but also the offspring Universal Display (OLED) , Corning (GLW) , Broadcom (AVGO) , Western Digital (WDC) and Skyworks Solutions (SWKS) .

I know some analysts are trying to call the top in defense stocks, but I think that's an inaccurate readthrough, because that presumes only the U.S. is ordering. But other countries need to defend themselves, chiefly from Iran, and you see Lockheed Martin (LMT) , Northrop Grumman (NOC) , Raytheon (RTN) and Leidos LDOS (new one) having powerful moves. Little Kratos (KTOS) , one of my faves, just reported a fantastic quarter and leapt forward, thank heavens.

We know that health and beauty is in bull mode; there just aren't enough of them. Estee Lauder (EL) and Ulta Beauty (ULTA) will work as part of the Look Your Selfie Best era.

I struggle to figure out where to put Costco (COST) and Walmart (WMT) -- perhaps just under bargains? That makes sense; after all, Ollie's Bargain Outlet (OLLI) is the strongest in the entire group. I have to believer that Dollar Tree (DLTR) can advance here on the coattails of the thesis.

Oh, and FANG -- Action Alerts PLUS holding Facebook (FB) , Trifecta Stocks name Amazon (AMZN) , Netflix (NFLX) and Alphabet (GOOGL) -- and Tesla (TSLA) always figure in. You don't need me to tell you about those, now, do you?

Just as notable as these bulls are the groups that can't seem to muster real togetherness strength here: banks, packaged foods, restaurants (save Darden (DRI) ), drug stocks except for a couple of biotechs, notably Vertex (VRTX) and BioMarin (BMRN) , and finally anything oil, with the offshore names actually, in some cases, taking out their fabled 2016 lows. Non-bargain retail's being eviscerated by Amazon. They report this week -- maybe there can be an oversold pop.

It's a wonder to me how split this market really is. It's a polar extreme market, with the companies that need the best growth and those that need the most anemic to do well.

Amazingly, the areas where the bull is not to be found include some of the biggest sectors of the entire market. No wonder it's so hard to outperform!

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