What’s Behind The Market's Resilience?
Stocks showed a confidence-building sign of resilience on Friday. Even despite a disappointing existing-home sales number, the Dow fought off earlier losses to climb back to just under even. So what’s behind the move?
Some might say that reports of manufacturing strength or a turn in oil are the catalysts here, but Cramer sees a different force at work: hedge funds and mutual funds.
He said the end of the month brings what are called “bids underneath,” or when money managers buy up their holdings to boost their funds’ performance. This, in turn, attracts more clients, and their money, to the funds in question. This is a long-held practice, called “marking up,” Cramer said, and it went into full effect this morning after that housing report.
The trend was readily apparent in three stocks that are crucial to many money mangers’ performance: Google , Apple and JPMorgan Chase . Cramer called them the generals for the most important segments of the market: tech and finance. And when they rallied, it was obvious to him that managers were marking up GOOG, AAPL and JPM.
This may sound overly cynical, but remember Cramer has been working on Wall Street in some capacity for 25 years.
So, “Trust me, that was the turn,” he said. “And nothing more.”
Cramer's charitable trust owns Apple and JPMorgan Chase.
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