Cramer reveals the market's top 10 actionable negatives
- "Mad Money" host Jim Cramer shares his biggest concerns about the stock market that could be cause for selling.
- A number of stocks are too ahead of themselves and at risk of getting taken down, Cramer says.
- But negative commentary won't necessarily prevent stocks from going higher, he says.
In a red-hot stock market that can't seem to slow its winning streak, CNBC's Jim Cramer has been inundated with requests from viewers to lay out the market's negatives.
"Now, I have endlessly told you how errant tweets, dysfunctional tax policy and 'little Rocket Man' can all create a hideous backdrop at any given moment," the "Mad Money" host said. "But those are all 'big think' issues, the kind of thing that drives me a little crazy, steams me, because it's total thumb-sucker journalism. It's central casting. It requires nothing that's even remotely like homework. It's by rote."
So, to give investors something to consider while they make decisions about their portfolios, Cramer decided to detail 10 overall negatives in the market.
1. Banks
If Friday's non-farm payroll data is weak, some market commentators might come out and say that it will stop the Federal Reserve from raising interest rates in December, Cramer said.
That would add to the bank stocks' risk of decline, since the high-flying group is set to report earnings in two weeks. Cramer said Bank of America and JPMorgan are particularly vulnerable.
2. Rails
With barely any pickup in cargo shipments, a recent downgrade for Union Pacific and a seemingly dim future for coal despite President Donald Trump's support for the industry, the rail stocks seem to have gotten too far ahead of themselves.
"CSX's stock is up 44 percent for the year thanks to the miracle man at the helm, Hunter Harrison, and it seems so overdone that even I, a railroad fan, have to say enough is enough," Cramer said.
3. Semiconductors
Cramer has heard recent murmurs on Wall Street suggesting that shares of Western Digital should be sold in case the price of flash memory chips rolls over.
"Well that would also be a reason to sell Micron ... which would in turn be a reason to sell semiconductor equipment maker Lam Research," he added.
And with worries about Apple's new iPhones abounding, the stocks of suppliers like Cirrus Logic, Texas Instruments, Qorvo, Skyworks Solutions and Broadcom are at risk of declining.
Cramer also pointed out that earnings reports from Intel and Cisco were not very well received by investors and cautioned that the same thing could happen with other tech companies.
4. Aerospace
Boeing, the top stock in the Dow Jones industrial average, and United Technologies, the huge aircraft manufacturer that just acquired air parts maker Rockwell Collins, both report earnings in late October.
If the aerospace giants don't beat analyst estimates and raise forward-looking guidance, Cramer expects "aggressive profit-taking."
5. Starbucks
Cramer expects an earnings "reset" at Starbucks as the company undergoes structural changes, which he thinks will initially cause a dip in the coffeemaker's stock.
6. FANG
FANG, Cramer's acronym for the stocks of Facebook, Amazon, Netflix and Google, now Alphabet, has been letting Cramer down of late.
Facebook is caught in the middle of a politically-charged investigation; Amazon hasn't revealed much about its plans for Whole Foods, which could be a letdown for some; Netflix continues running higher, raising concerns about how much higher it could go; and Alphabet hasn't said much about its self-driving car segment, Waymo, as the narrative becomes increasingly dominated by General Motors and Tesla.
7. Chemicals
Hurricane season may have complicated the earnings that the market's top chemical companies are set to release, Cramer said.
"There are always some investors out there who haven't factored this stuff in," he said.
8. Machinery
Construction materials stocks like Caterpillar and Cummins have been soaring, but Cramer is worried that they won't keep pace after earnings.
"Better wait to buy more of them if you aren't in them yet. I'd be more likely to trim," the "Mad Money" host said.
9. Oil
"The oil stocks have had quite a run lately," Cramer said. "Call me nervous about number cuts."
10. Cloud
Cloud plays Workday, ServiceNow, Salesforce and Microsoft have been running, but if the big players don't talk about companies adopting their platforms, Cramer thinks there will be profit-taking, however short-lived.
Final Thoughts
"So, for those of you who think I'm a Pollyanna and an aggressive cheerleader and an all-bull all-the-time guy, there's my list of worries. You know about what I'm concerned about," Cramer said. "Doesn't mean that these stocks can't go higher. But the bottom line is that the strong action in so many stocks has turned into a headwind for the stocks, a self-fulfilling headwind, which means we'll need to get some extra blowout numbers if these names are going to continue to advance."