Jim Cramer's Market Minute Recap, Dec. 18

Recap of Jim Cramer’s comments on Market Minute, December 18. Click on a stock ticker for more analysis:

Hangover Remedy with Stocks: Boeing (BA), Honeywell (HON) and Ford (F): In an interview with Alan Task of TheStreet.com, Cramer described the sluggish market as an "options hangover" that usually happens in the morning until 1 pm as investors with call options are anxiously awaiting good news. These investors exercise options, get common stock and tend to be margin players and "kick it out" if there is good news. As mutual funds put money in the market after 1 p.m., the market experiences "a bountiful afternoon." Cramer has noted this hangover pattern since the Fed raised rates in May, and while it "freaks people out," he suggests giving the market a chance. His message to retail and mutual fund investors who haven't gotten into the market yet was: "You will have to pay higher prices this time next year." Looking at the fees companies like Goldman Sachs are making, returns from private equity firms and the cash they are putting to work, and a bond market that "is desperate for any kind of high yield," Cramer concludes that moving away from the market would be "premature." Concerning comments that the current market is a bubble, Cramer points out that this was also said of real estate in 2003, and the bubble lasted two years. He suggested staying away from industrials with the possible exception of Honeywell and Boeing. Cramer remarked that the Fed tends to cut on a crisis and "I believe the crisis is going to be with Ford." Even though he likes CEO Alan Mulally, he doesn't think that Ford can get itself out of its tailspin, and although it has raised $18 billion, he thinks that the money will go fast. Cramer adds that he "loves the fact that is subprime is blowing up," which should also encourage the Fed to cut rates.

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