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Aug.07
7:24 PM ET
Friday, 7 Aug 2009
The Most Important Data of All

The stock market finished the week strong, but with the rally continuing its upward momentum Cramer poses this question to faithful Cramericans: should we take a step back, in the midst of all this positive stock market action, and wonder if the market has gone too far, too fast?

There is a mixed bag of positive and negative news, from Cisco [CSCO  Loading...      ()   ] signaling a shift in orders and big banks back on the rise to Deutsche Bank’s [DB  Loading...      ()   ] report on more underwater mortgages and homebuilders losing money, so what should you think? Has the market simply too bullish? 

In truth, Cramer can’t give you a definitive, straightforward answer, because, well, it’s complicated. On one level, Cramer says that this rally is “nuts” as some things could get worse despite the recent rise in the stock market. On the other hand, it is totally reasonable and right thinking things are getting even better from here. 

Today’s jobs report was one of the biggest signs that the economy has done a recessionary about-face and will continue to improve in the coming months. Compared to other “important” economic numbers that come out, Cramer reminds you that not all pieces of data are created equal, and job numbers trump them all. 

Cramer sees today’s number as “glorious,” showing a continuation of the trend that pushed this market higher and higher. Things are going from less bad to better. Cramer trusts it, and he thinks you should too.

The Mad Money host has said time and again that if unemployment keeps skyrocketing, all bets are off for the market. But he also reminds you that the reverse is true. Now, he says, companies are trying to determine whether they have actually cut too many jobs. No matter what the industry, companies beginning to adopting a “wait and see” mentality: a cessation of layoffs until the smoke clears.

But back to the rally: These new job numbers are beginning to reassure us that this rally is for real, as the economy is moving from somewhat bad to better. Everything from homebuilders to hotels and advertisers are going to move upwards on an ever-improving employment landscape and they’ll adjust their operations accordingly. Every company in America keys on this data, Cramer says. 

Cramer’s bottom line: We can’t suddenly downplay the importance the jobs number. The moves we’re seeing? It’s rational now that the “less-bad-to-getting-better” thesis can be confirmed.

For Cramer's full-on analysis, check out the video!



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