Insightful analysis and commentary for the US and global equity investor
Contributors: Douglas McIntyre Jon C. Ogg

Previous Posts

Wednesday, November 08, 2006

Cramer Keys In On the Elections (4)

Jim Cramer has been on CNBC this morning at the floor of the NYSE and he discussed the elections. He says as a result of a democratic congress that the potential tax increases, the tax hikes against oil, the potential reduced cuts in spending, and the cuts in Big Pharma negotiated drug prices could essentially act as a Price-to-Earnings multiple reduction on almost everything. Cramer also said you have to wonder if all the healthcare groups that essentially got to write the latest healthcare policies can hold up under a democratic congress. While Cramer was a little solemn, these groups are all the same ones he has been saying were at risk or would do well under the scenario.

Pfizer (PFE) and Merck (MRK) could be at real risk since they wrote Medicare D according to Cramer. Cramer also said that Alliant Techsystems (ATK) could be at risk on the Iraq because they are the largest bullet manufacturer for the government.

Cramer said this could still be good for homeland defense stocks and biotech stocks. Gilead (GILD), Genzyme (GENZ), and Celgene (CELG) may actually benefit from a democratic congress because of AIDS drugs and other humanitarian aid.

Cramer thinks that Fannie Mae (FNM) could go back into favor and he doesn't think homebuilders will do poorly under a democratic congress.

Cramer also said TECHNOLOGY needs to be bought here for Q4. He noted Cisco (CSCO) positively ahead of earnings today. Cramer also said you want to be long the steel companies. Cramer said ADM (ADM) and the Andersons (ANDE) could also win as he thinks every candidate will go to Iowa touting ethanol to win farmers support ahead of 2008.

That should be it out of Cramer until later on regular scheduled events.

Jon C. Ogg
November 8, 2006

Powered by Blogger