Mad Money

Cramer’s week ahead: DC heat melts market?

Reasons to stay in the market
VIDEO12:2612:26
Reasons to stay in the market

(Click for video linked to a searchable transcript of this Mad Money segment)

Get ready. An exciting new drama is coming next week. Kind of the ultimate reality show, in a way.

Here's the plot.

Unless lawmakers can reach some kind of accord by late Monday, the federal government will no longer have the authority to spend money, leading to a partial shutdown of the government on Tuesday.

Exciting huh? Unfortunately if you don't like the way the story unfolds you're stuck.

This drama is all too real and it will happen in real time. Without question Wall Street will be watching.

"We should call it a Washington nightmare," Cramer said "All week we're going to be hearing about how much the gross domestic product will be hurt by the government shutdown. Or maybe we hear about a government debt downgrade. And there's bound to be rhetoric about the Affordable Care Act and how it will hurt business."

In the event of a shutdown Cramer thinks the market will go into 'sell first and ask questions later' mode.

However, as a sell-off gets underway, Cramer says get ready. "Ultimately, our elected leaders will make a deal, and when that happens you want to be a buyer. We've seen it before, even a lousy resolution will let us rally."

Adam Jeffery | CNBC

Of course there will be other developments in the market, too. And Cramer says every responsible investor must be aware of these other catalysts as well. Aside from the shutdown, following is a list of events that Cramer will be monitoring.

MONDAY SEPTEMBER 30TH

On Monday Cramer will also keep one ear open to chatter overseas. "We get manufacturing statistics from China and I think they'll be terrific. China's rebounding and it may act, somewhat, as a counterweight to Washington."

Also Cramer will be looking for a small business tell. "We hear from Paychex on Monday after the close. This payroll processing company, which dominates the small business market, has been advancing of late thanks to optimism that things were getting better. Will Paychex give up that gain because of Washington? We'll soon find out."

TUESDAY OCTOBER 1ST

Aside from the obvious federal fiscal fiasco, Cramer will also be looking at over the counter drugs. In this case he means results from Walgreen. "This company is spreading its wings, going international, and at the same time taking back market share that it lost during its fight with ExpressScripts. What can I say about WAG, other than I hope Washington brings it down so the stock can be bought on the cheap."

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WEDNESDAY OCTOBER 2ND

On Wednesday Cramer will be listening to commentary from Ben Bernanke, who is scheduled to speak to community banks in St. Louis. "I'll be glued to this looking for any signs that Bernanke's truly worried about what a government shutdown could do to the economy. I want to know this because it impacts how to interpret Friday's employment number."

On the same day Cramer will also have fertilizer on the brain.

"Genetically modified seed maker Monsanto reports on Wednesday, and here's one that's been roaring of late. But what happens if we hear that farm subsidies are going to be cut back as part of the budget talks? Then Monsanto gets hit, even if it reports a good number."

THURSDAY OCTOBER 3RD

On Thursday Cramer will be listening to commentary from Clorox and Eli Lilly with both companies talking to analysts.

However, Cramer is hard pressed to imagine what they might say that will matter more to these stocks than rate moves. "They remain higher yielding stocks, 3.4% for Clorox and 3.8% for Eli Lilly, and investors are still using these high-yielders as bond market equivalents."

FRIDAY OCTOBER 4TH

Assuming a government shutdown has either been averted or resolved by Friday, the latest jobs report will steal the spotlight. "I think the number will be good," Cramer said. I'm hoping to see unemployment drop slowly. If hiring is very strong the market could take it as a sign that tapering is imminent. If that's the case rates should rise and therefore I'd expect the market to sell bond equivalents, that's utilities, the master limited partnerships, and the real estate investment trusts."

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