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Cramer: Putin-ordered sanctions bullish for stocks

Considering all the bad news and negative developments, shouldn't stocks be worse? Jim Cramer thinks that question demands attention.

Dig down into the market, and Cramer says there are at least seven catalysts that should have given bears a field day.

1. Sprint is walking away from T-Mobile. "Developments have wrecked the big consolidation play," Cramer said. That's negative for the stock, but moreover, "the Justice Department's involvement in blocking this deal suggests to me that antitrust might be making a comeback." That could be an enormous headwind for mergers and acquisitions.

2. Reports suggest the White House is weighing actions to deter U.S companies from acquiring foreign firms, and then reorganizing overseas, simply to benefit from a lower corporate tax rate. "If that happens so-called inversions could rapidly be a thing of the past. Fortunes would be lost to shareholders," Cramer noted.



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3.Fox walked away from its bid for Time Warner. "Again, shareholders have lost fortunes in potential value."

4. Parker-Hannifin reported earnings that missed expectations. "Industrials have been challenged and these developments should compound the pain," Cramer said.

5. Disappointing growth data out of Italy suggests the nation is slipping back into recession. "Is it a sign that Europe is sinking? That's a huge fear of mine," said Cramer.

6. Interest rates are going down again. "Lately, as interest rates fall, banks take hit as investors fear profits will be dinged." Again, that's negative.

7. Oil traded lower. "Typically a strong economy drives the price of oil higher," Cramer said. The price action is somewhat ominous.

Given all these negatives in the market, why on earth did the S&P and Dow Jones industrial average close higher on Wednesday? Cramer says whenever the market advances in the face of serious headwinds, no matter how modest the advance, investors need to examine the price action

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Cramer thinks he knows the answer: Russian sanctions; "Vladimir Putin slapped some sanctions on companies from countries that are sanctioning his companies."

Although that may sound like the standoff with Russia is growing worse, Cramer said that's not how the market sees it. "Pros are saying, if Putin is introducing sanctions, then it's incrementally more likely the conflict will be resolved using diplomacy. They say, why would he tinker with sanctions if he was going to invade Ukraine in the next 72 hours."

Therefore, Cramer views Wednesday's gains as confirmation of something he's been saying for a while; developments in Russia will move the market, higher if they suggest a resolution will be peaceful, if only because it will trigger a short-covering rally. Conversely, negative reports out of Russia should send stocks lower.

"That's right, in the absence of Putin marching into Ukraine, this market can rally even with seven issues that normally would have led to a very serious selloff. Individual investors must realize, this market is all about Russia."

(Click for video of this Mad Money segment)

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