• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Doug Kass
    • Bruce Kamich
    • Jim Cramer
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Financial Services

Cramer: Watch Bank of America; It Will Tell You What Will Happen

Banks and insurers have surged on hopes of rate rises. What now?
By JIM CRAMER
Sep 06, 2016 | 06:36 AM EDT
Stocks quotes in this article: BBT, FHN, KEY, C, BAC, JPM, WFC, AIG, TRV, AON, MMC, ICE, NDAQ, DFS, MA, V, BRK.A, BRK.B

Have the banks gone as far as they can go? Here's a group that has ridden the wave of talk about one or two rate hikes and just climbed relentlessly.

Call these stocks Stanley Fischer stocks -- the stocks that the vice chairman of the Fed gave a huge boost to when he didn't want to rule out two rate hikes.

It was a gratuitous and confusing statement, but it's kept a bid underneath the banks, every bank, whether it be the diverse regionals like BB&T (BBT) and First Horizon (FHN) and KeyCorp (KEY) or the majors like Citi (C) , Bank of America (BAC) , JP Morgan (JPM) and Wells Fargo (WFC) .

In fact, anything financial remains incredibly strong. There have only been a couple of weeks when the insurance stocks haven't advanced. They are just horses.

They have broadened the loved insurers of late. You are seeing a big move in AIG (AIG) after that recent good quarter. That had been a real laggard. Travelers (TRV) is back going for new highs after a pause. The insurance brokers, like AON (AON) and Marsh& McLennan (MMC) haven't ever cooled.

Same with the exchanges: Intercontinental (ICE) and Nasdaq (NDAQ) have so many buyers you have to believe that's just people believing there's even more consolidation coming. Intercontinental keeps taking out costs too.

But now the credit card companies, led by Discover (DFS) but followed by Mastercard (MA) and Visa (V) are looking incredible.

We own Visa for Action Alerts PLUS and it hasn't been able to take out this $80 level and it sliced through, knife through butter, as if there had never been any resistance.

Oh, and Berkshire Hathaway (BRK.A) , (BRK.B) , because of its interest rate sensitivity from its insurance portfolio, has joined the run.

But here's the rub. That employment number sure throws cold water on the Fischer scenario, and if that's the case, it is hard for me to believe that these stocks can all keep running.

So, here's what I am thinking. Watch Bank of America: it's the company where you can take numbers up the most if there are two hikes. It will tell us straight away.

Otherwise, the betting here is that the group has to stall out. Too much hot money. But we will know soon enough, and BAC will tell us what's going to happen.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

Action Alerts PLUS, which Cramer co-manages as a charitable trust, is long C, WFC, V.

TAGS: Investing | U.S. Equity | Financial Services | Industrials | Markets | How-to | Jim Cramer | Risk Management | Stocks

More from Financial Services

Wells Fargo's Quant Downgrade Signals the Stagecoach May Be Slowing Down

Bruce Kamich
Feb 25, 2021 12:23 PM EST

This is a good time to check out the charts of WFC.

Upwork Needs Some Consolidation Before Renewed Gains

Bruce Kamich
Feb 25, 2021 9:05 AM EST

The shares have made a good run since early April.

Brink's Safely Delivers an Upside Breakout

Bruce Kamich
Feb 24, 2021 8:30 AM EST

Here's how to play BCO stock.

Tyme for Asia as HSBC and South African Online Bank Expand

Alex Frew McMillan
Feb 24, 2021 7:30 AM EST

Europe's biggest bank, HSBC, is in an impossible political situation, caught between London and Hong Kong. South Africa's TymeBank will have it easier expanding into the Philippines.

Square Reports Tuesday, Be Ready to Take Profits

Bruce Kamich
Feb 22, 2021 9:48 AM EST

Now that prices are within striking distance of our target, let's review the charts.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 11:51 AM EST REAL MONEY

    Watch Bob Lang and Doug Kass Discuss Short-Selling!

    Bob Lang and Doug Kass with an engaging and educat...
  • 11:32 AM EST JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    Navigating a Market Correction
  • 11:29 AM EST GARY BERMAN

    Where Does the Nasdaq Go From Here?

    Where does the Nasdaq Composite (CCMP) index go fr...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2021 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login