Jim Cramer is seeing strong signals from stocks that Hillary Clinton is not only just pulling away from Donald Trump in the 2016 election polls, but that Democrats could be ready to sweep both houses of Congress.
This is a major reason why stocks haven't been performing as well as expected, he said.
"I think it is important to frame the stock market in the context of a potential Democratic landslide come election day," the "Mad Money" host said.
If both houses of Congress were to go Democratic, it could put the banks back in Washington's crosshairs, Cramer said. That means more regulation and multiple discussions on whether banks are too powerful.
And forget about mergers. Cramer expects to see the Justice Department's anti-trust division block anything that could create excessive concentration. That means the Bayer-Monsanto, Dow-DuPont or even the Walgreens-Rite Aid deals could be in jeopardy.
"The tepid action in the winners so far this earnings season simply does not indicate that the results are sub-par. It is a reflection of the fact that money managers are worried about a Democratic landslide come election day, so they are selling anything that the government could potentially squelch," Cramer said.