It’s never a good thing for the stock market to go in hot into earnings season, Jim Cramer says.
« We want things cool. There is too much heat. That is why I’m hoping we get some more down days this week, just in case the earnings aren’t as perfect as they need to be after this historic run, » the  » Mad Money  » host said.
Looking at the overall context of the market, Cramer wasn’t impressed. In fact, he thinks that is the major reason why the Dow failed to hit 20,000 again.
The banks have led the rally, especially Bank of America , which has jumped to $22 from $17 since the election, and Goldman Sachs , which has gained 46.5 percent in the past three months.
« The issue with these stocks, so vital to the next leg of the rally, is that they need interest rates to go higher if they are going to keep rising, and interest rates seem to have peaked for the moment, » Cramer said.
JPMorgan , Wells Fargo and Bank of America all report on Friday and Goldman reports next week, and the backdrop right now is sub-par for Cramer. It would be better if the stocks sold off ahead of their quarters, he said.
The second problem Cramer found was in healthcare. The group has bounced since the election, but investors don’t know when Donald Trump could tweet about drug prices. As the market heads into the important JPMorgan health care conference this week, Cramer suspects that the event has been more muted because of worries over pricing.
Many pharma companies also have a large amount of overseas currency exposure, which could hurt earnings when compared to the strengthening dollar.
Cramer also worried about the price of crude at $52, as it could prevent oil stocks from going higher. If anything, he expects them to move lower. Thus, investors may not be able to count on the oil patch to do the heavy lifting in the market.
The final worry on Cramer’s list was technology, especially Apple , which was anointed as a top pick by Morgan Stanley because of the impending iPhone 8 and the possibility of repatriation relief.
« I much prefer downbeat talk that keeps expectations low, » Cramer said.
That is why moving into earnings season, Cramer is hoping for more downgrades and negativity in the stock market in general. More sell ratings could create much-needed pessimism to cool stocks down.
After all, when everyone is bullish, that means there’s no one left to buy. More negativity could help sustain the move.
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The stock market may pull back this year, but earnings should ultimately push it higher, JPMorgan’s David Lebovitz told CNBC on Monday.
In fact, he’s anticipating earnings for the S&P 500 could grow somewhere between 3 percent and 5 percent for 2017.
« A lot of the headwinds to profit growth over the past couple of years, namely the dollar and energy, are largely now behind us, » the global market strategist for JPMorgan Asset Management said in an interview with CNBC’s  » Power Lunch.  »
Add in the dividend yield and he sees a mid- to high-single digit return for U. S. equities over the next 12 months.
And that doesn’t factor in the potential of « animal spirits.  » While those animal spirits have powered the market higher since President-elect Donald Trump won the election, a lot of it has now been priced in, Lebovitz said.
« Anything we get from animal spirits in the form of multiple expansion would really be icing on the cake, » he noted.
Jim McDonald, chief investment strategist at Northern Trust, is also bullish on U. S. equities.
The growth picture looks « pretty dependable »; there’s been an improvement in momentum and consumer confidence; and there may be tax reform and regulatory relief, he pointed out.
In this environment, he would be overweight U. S. stocks, U. S. high yield and natural resources.
However, McDonald warned inflation could be a risk.
« If the economy starts to heat up, inflation ticks up, the Fed raises rates more than people expect. We think that’s the number one risk to a continued rally in 2017, » he noted.
As for Trump’s recent tweets that have targeted specific companies, McDonald said he believes it is more important to focus on what the new administration will do versus what it says.
« There have been several circumstances where they’ve raised a lot of ruckus around individual areas or initiatives of the government but then have proven to taken relatively centrist approaches. So, I wouldn’t be too worried about that individual company risk, » he noted.
Meanwhile, in addition to U. S. stocks, JPMorgan’s Lebovitz thinks Europe is attractive in the medium to longer term. He also thinks there is value in emerging markets, although he would cautious.
« After five years of pretty significant underperformance, the fundamentals feel like they’re beginning to turn. There are some risk from trade, but I think the story is evolving there, » Lebovitz said.

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The Obama administration cut mortgage-insurance premiums charged under a government program that’s popular with first-time home buyers with little money for a down payment, a move that may ease the burden of rising interest rates.
The annual fees the Federal Housing Administration charges to guarantee mortgages it backs are being cut by a quarter of a percentage point, the Department of Housing and Urban Development said in a statement on Monday. With the reduction, the annual cost for most borrowers will be 0.60 percent of the loan balance.
The change — which could be reversed after President-elect Donald Trump takes office — may hurt bond investors, as it speeds up repayment on some securities. Private insurers that compete with the FHA also could suffer. Shares of insurers MGIC Investment Corp., Radian Group Inc. and Essent Group Ltd. fell 2 percent to 3 percent after the announcement.
The reduction, which lowers the cost of a home for those who use the FHA, is charged to mortgage borrowers. HUD on Monday said the fee cut would save new FHA-insured homeowners an average of $500 this year. The cut would take effect on Jan. 27.
The Obama administration’s decision may cause tension with some Republicans who say a fee cut could put taxpayers at risk by reducing the amount of money the agency collects to buffer against mortgage defaults. The FHA is part of HUD, whose secretary sets the fees. The decision will put the spotlight on Ben Carson, nominated as HUD secretary of under Trump. Carson declined to comment on whether he would reverse the decision, according to a spokeswoman.
HUD Secretary Julian Castro said on a call with reporters that he had no reason to believe the cut would be altered by the Trump administration. Trump’s transition team received notification of the premium cut shortly before its public announcement, he said.
“It’s time the FHA passed along some modest savings to working families,” Castro said.
Mark Calabria, director of financial regulation studies for the libertarian Cato Institute in Washington, described the cut in an e-mail as a “bad idea, and irresponsible for an administration on its way out the door.”
The FHA doesn’t make mortgages. It sells insurance, paid by borrowers, on loans protecting investors in case of default. The program allows borrowers to get a mortgage with a down payment of as little as 3.5 percent and a credit score of as low as 580, on a scale of 300 to 850. That makes it one of the most forgiving mortgage programs and popular among first-time home buyers.
Some in the real-estate industry have been calling for another fee cut and heralded Monday’s move.
“Dropping mortgage insurance premiums today will mean a whole lot more responsible borrowers are suddenly eligible to purchase a home through FHA,” William Brown, president of the National Association of Realtors, said in a statement.
The FHA last cut premiums two years ago. That cut, which came as rates dropped and lowered the annual fee for most borrowers to 0.85 percent from 1.35 percent, led to a wave of refinances.
The cut announced Monday will likely have less of an impact, in part because mortgage rates have risen sharply since Trump’s election. The effective FHA mortgage rate at the end of last year was about 4.32 percent, according to the Mortgage Bankers Association, compared to 3.71 percent for the week ended November 4.
Some of the cut’s impact could also be washed out if investors in Ginnie Mae-backed mortgage bonds, which include loans insured by the FHA, drive rates up after the cut.
The FHA required a $1.7 billion taxpayer infusion after the financial crisis, and just in 2015 met its statutory minimum capital requirements for the first time since then.
There is precedent for a change in mortgage fees shortly before a change in leadership. In 2013, Edward DeMarco, then acting director of Fannie Mae’s and Freddie Mac’s regulator, announced that he would direct the mortgage-finance companies to increase fees. Incoming director Mel Watt soon after said he would put a stop to the fee changes.

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There’s no substitute for the depth and breadth of information in a book that’s written by a successful person with a specialized point of view. Instead of quick fixes and hacks that rely on current trends, each of these 12 best-selling personal finance classics promote concepts that stand the test of time.
We listed these books by financial goals for 2017, so you can pick and choose. Or you can read all 12 — say, one each month — to really grow your knowledge of personal finance from many different angles.
Read: The Total Money Makeover by Dave Ramsey
Dave Ramsey’s ideals and advice are an extreme example of a debt-free lifestyle, but learning that the key to success is a laser focus on one goal at a time made all the difference. Diluting your efforts makes it take much longer to see results, making it more likely you will give up, Ramsey says. The first of these goals is saving $1,000 cash in a starter emergency fund, and he outlines how to do it.
The second is paying down debt using the « debt snowball » method, which we love because it pays off the smallest credit card first, again giving you that feeling of accomplishment and also freeing up money from that monthly payment to go to the next smallest balance card. And you can’t beat the sheer volume of debt payoff success stories that outline how they did it.
Read: The Automatic Millionaire by David Bach
We think David Bach coined the term « The Latte Factor » over a decade ago because he plainly illustrated the value of that same daily $2.50 spent on coffee (or whatever else) if saved and invested over 10, 20, or 40 years. Even though he wrote the book when interest rates for savings vehicles were quite a lot higher, the wisdom still applies.
He was also the first loud proponent of automatic bill pay, always paying yourself first (so savings start sooner rather than later) along with your bills so you never miss a payment, incur a late fee, or get any type of late payment penalty such as a ding to your credit score.
Read: Rich Dad, Poor Dad by Robert T. Kiyosaki
His business bankruptcy and lawsuit trouble aside, what we took away from this book is a new thinking about assets and liabilities. « An asset is something that puts money in my pocket, » Kiyosaki writes. « A liability is something that takes money out of my pocket.  » If you buy an expensive car and pay a big loan payment, it never puts money back in your pocket, so it is actually a liability.
By this view, even purchasing real estate (which most people view as their greatest asset) must be with an eye toward future value or current rental income. And you cannot depend on that future value. If you already took the equity out, or have no equity, or are upside down on your mortgage, you can see how it can quickly turn into a liability as well as how values can plummet, as so many found out when the real estate market crashed beginning in 2006.
We also learned from Kiyosaki that in real estate, to always be looking and to make a lot of low offers.
Read: Your Money or Your Life by Vicki Robin and Joe Dominguez
In this book, you’ll learn to evaluate whether your career choices are costing you « life energy, » and whether your job and spending are really in alignment with your life goals and values. When you do the math as laid out in the book, you may see your « true » hourly wage driven down in an eye-opening way. You can also see how you might be wasting time and money on things that aren’t really important to you at all.
Read: Think and Grow Rich by Napoleon Hill
In Think and Grow Rich, originally written in 1937 and based on interviews of more than 500 wealthy people of that time, Hill lays out the secrets he uncovered, arranged in 13 steps. What really spoke to us was a chapter about persistence. Do not miss the chapter called « The Devil’s Workshop.  »
Read: The 7 Habits of Highly Effective People by Stephen R. Covey
For anyone who is committed to changing a habit or reaching a goal, this book is a must-read. In it, you’ll learn that to successfully change any habit, you need not only the very strong desire to do it, but also the knowledge of how to do it and the skill to do it. And it all starts with how you view the world, yourself, and the people around you. You might be thinking, « Just tell me the seven habits already, » so if you want to know, get the book.
Read: The Money Book for the Young, Fabulous & Broke by Suze Orman
Need a book to give your young adult kids as they get their first jobs and move out on their own? A book that would answer any financial questions they might have, such as « What should I do about this 401(k) I was offered at my first job? What even is a 401(k)?  » This tome outlines the basics for every financial problem, choice, or term young adults might come up against. We especially liked her list « Don’t Do It, » as well as her usual spiel, « People first, then money, then things.  »
Read: Linchpin by Seth Godin
If you have any career aspirations, this is the book for you. In this book, you’ll learn that in order to be indispensable to the company you work for (thus, not fireable), you have to contribute something special that no one else does. You’ll learn that just doing the job as it’s written makes you a cog in the big wheel, as replaceable as any other cog. And who wants to just be a cog? The other thing we loved learning about in this book is how your « lizard brain » controls your daily thoughts and actions, and how to resist it.
Read: The Millionaire Next Door by Thomas J. Stanley, Ph. D., and William D. Danko, Ph. D.
The majority of the wealthy in America don’t live the stereotypical way we think they do, according to research conducted over the 20 years prior to the publication of this book in 1996. The authors studied the results of surveying and interviewing over 11,000 high-net-worth or high-income individuals and more than 500 millionaires to come to this opinion.
The secret that spoke most to us was, « They believe that financial independence is more important than displaying high social status.  » If you’re a data geek, this book is for you.
Read: The Way to Wealth by Benjamin Franklin
What could be more classic than a book written by Benjamin Franklin more than 200 years ago? What struck us in this book was Franklin’s connection between being debt-free and being independent. And who wants to give up their independence just to buy stuff?
Read: The Intelligent Investor: The Definitive Book on Value Investing by Benjamin Graham
The smartest thing we learned from this classic, originally published in 1949, is to take a long-term view of investing. If you have neither the time nor interest in researching a stock purchase to see that it meets a set of value-investing criteria, then you should stick to index funds or mutual funds.
This book’s basic advice has guided many investors solidly to this day because it urges you to never skip any part of the research process when making a purchase. Get the revised edition, which includes more modern perspectives.
Read: How to Win Friends and Influence People by Dale Carnegie
Why is this book on a list of personal finance books? Because without other people’s cooperation, you cannot be successful at work or with your finances. The lessons encourage you to shift your thinking and relate differently to people, and the many stories show how they work. For example, the book advises you to forget about what you want and what you want to say, and focus on the needs and wants of the other person and listen. That, and not to criticize.
This book has a lot of advice you can put into place immediately, but it takes time for these ways of interacting to become habits. This book is a must if you’re in any kind of sales position — or want to have friends!
Whether these books were written 100 years ago or very recently has no bearing on the basic financial concepts described. And it doesn’t matter whether you agree with every concept outlined or every author’s opinion. Find what you like, what might work for you, and leave the rest.
This story originally appeared on Dealnews.com .

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