Jim Cramer: 10 Themes Taking Shape for 2014
NEW YORK (Real Money) -- Only two full weeks into 2014 quarter, and we are already tracing out the themes of the year -- themes upon which large bets are being placed as if they are done deals. This kind of thinking isn't unusual at the beginning of the year. In fact, it is kind of endemic, as we're seeing what has resonance and what doesn't.
Without further ado, here's what I am seeing, with the positives first and the negatives second.
1. It's another year when aerospace is ascendant. We know from Alcoa
2. Nonresidential construction may be, at last, increasing in the country. This gigantic generator of jobs has been stillborn since the Great Recession. It can be considered the lone area of the economy that's been holding the U.S. back. Nonresidential construction needs everything from big financing -- great for banks -- to robust white-collar companies that are running out of space, to a definitive end to the glut of office towers that had been built in response to the early-2000s boom. We are getting this theme from a host of banks that have reported. United Technologies has a gigantic heating, ventilation and air conditioning business, as well as its Otis elevator segment. So, again, this company will be able to tell us much more and cinch the theme for 2014.
3. The end of the decline in personal computers. Lost in the shuffle of the widely perceived disappointment from Intel
4. More mergers and acquisitions than last year. Of course we now know that, other than a couple of very large deals -- noticeably in Berkshire Hathaway's
5. The troubles with the banks are now winding down, and being replaced by the rewarding focus on net interest margin. For two years during the mortgage boom, the bank stocks were duds. Analysts kept waiting for the far a rise in the more lucrative and less risky net interest margin, which is what banks make on your deposits. This was the quarter when it finally happened, and it is looking mighty joyous, particularly because of the rather remarkable increases in deposits. This, when added to a peak in prosecutions and mortgage putbacks, is a major reason why Bank of America
6. The return of Europe to the fold of growth. So many companies that are based in the U.S. expanded rapidly across the pond during the period of European Union growth. The result was a huge drag on earnings during the European Great Recession, requiring dramatic cutbacks in labor forces. Now, as we are hearing from Alcoa, General Motors
7. Spending for telco equipment, both domestic and in China, seems to be making a comeback. We have heard that in burgeoning orders for Ciena