A "giant reset" is looming for the markets because the improving economy is simply not trickling down to companies' bottom lines, CNBC's Jim Cramer said Thursday.
"Macro is great, but when you have to go deal with companies, it's bad," Cramer said on "Squawk on the Street."
"We have to deal with the four walls of the corporate canvas, and they are simply not able to turn this macro positive into micro earnings gains, and that's a real conundrum, particularly when the 10-year is signaling that happy days are here again," he said.
"There's a giant reset going on," he added. "It's just playing out right in front of us," pointing to disappointed expectations that are simply too high in places like retail sales and technology.
"It's almost like the CEOs are saying 'whoa' " to the market bulls, Cramer said, because the boots on the ground—the companies providing guidance—are seeing that things are just "OK" and "inconsistent."
For example, Cramer pointed to the underlying message in Cisco's earnings—that the "stock got ahead of itself."
(Read more: Cisco CEO Chambers explains layoffs, Q4 earnings)
"In the end, the market comes down because of the reset," he said. "I'm in love with macro, but I'm swimming in the toxic pit here."
Disclosure: Jim Cramer's charitable trust owns shares of Cisco.
— By CNBC's Paul Toscano. Follow him on Twitter and get the latest stories from "Squawk on the Street"