Cramer Says Banks Could Bounce on Homebuilder Earnings and Strong Jobs Report (TOL, HOV)

June 2, 2008 9:11 AM EDT

On Friday's Mad Money, Jim Cramer predicted that a bounce in bank stocks could spark a marketwide rally this week. He said that this possible return will depend on several factors, including a solid jobs report on Friday and good earnings from Toll Brothers (NYSE: TOL) and Hovnanian (NYSE: HOV). Toll and Hovnanian are expected to report Tuesday and Wednesday, respectively.

Cramer pointed out that problems with mortgage-backed securities "have been at the center of the credit crisis", meaning that if homebuilders show stabilizing prices, a bottom could form, which could also signal a bottom for banks.

While negative results from Toll and Hovnanian, as well as a weak jobs report, could be bad for financials this week, Cramer said he is "positive about the outcome overall."

Toll Brothers, Inc. engages in designing, building, marketing, and arranging finance for single-family detached and attached homes in luxury residential communities in the United States.

Hovnanian Enterprises, Inc. engages in homebuilding and financial services businesses in the United States.

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