Banks have been hurt by low interest rates, but that may change in 2015, says Jim Cramer on TheStreet.com. With a robust 5% growth in GDP data the past month, there seems little justification for the Fed to keep interest rates low to prop up the economy. That means that higher interest rates are likely to be on the cards for 2015, and with loan growth strong, the combination could be a good sign for banks.
Bank stocks have been anticipating this with an uptick, but they are probably not done going higher. Another plus is the departure of Tony West of the Justice Department, who had been a “hammer” against the banks. Cramer thinks there will less of a punitive attitude against financials like JPMorgan and Bank of America. Cramer would “accelerate” buying of these stocks, and particularly likes SunTrust and Bank of America.
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When it comes to oil stocks, the picture is much less rosy. While low prices at the pump are a boon to consumers, oil stocks have tanked. Oil maven Boone Pickens is confident oil will see the $80s or $90s by the end of next year, because he says the issue is demand, and believes demand will increase. Cramer thinks oversupply will continue to be an issue with more oil coming out of the Gulf of Mexico. Cramer doubts oil will rise above $80 and thinks it is more likely it could revisit the $52 level. Naturally, this is not a good time to buy oil stocks, except for those who have their production costs hedged out a few years.