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Cramer Explains Stock Market’s Gains

Thursday, 8 Mar 2012 | 6:26 PM ET
Cramer: Bull Market Has Not Run Its Course
Mad Money host Jim Cramer explains why the markets still have room to rally, saying, with Bernanke leading the charge, we can keep buying domestic banks and domestic housing as ways to play the "by any means necessary" strategy.

After U.S. stocks finished higher for the second straight session, Cramer on Thursday noted that most issues that had worried investors earlier in the week have since been addressed.

“One by one, the fears have been answered,” the “Mad Money” host said. “And you can see how the averages could bounce back with an alacrity that surprised the skeptics, including yours truly.”

Take the Greek debt crisis, for example. There is now a high level of optimism that Greece would secure its bond swap deal with private investors. Nearly 95 percent of bondholders have signed up to participate in the bond swap deal, according to officials, exceeding the 90 percent rate the country had been aiming for.

Elsewhere in the market, Cramer said the emerging markets had been sagging because their interest rates are set too high. In turn, the economies of China, Brazil and India are slowing down. Brazil’s central bank recognized this, though, and again cut its interest rates considerably. Cramer thinks China could follow suit with an interest rate cut of its own as soon as this weekend.

Meanwhile, Cramer thinks the U.S. economy is picking up. He has high hopes for the monthly government jobs report, which the Labor Department will release on Friday.

(RELATED:Cramer's Play Ahead of Friday’s Jobs Report)

“The Fed is worried, as I'm worried, that the higher price of energy could throw this economy back into recession by crimping profits, curtailing consumer spending, and most important, undoing the nascent housing recovery,” Cramer said. “Just when the stock market started rolling over again yesterday, the Fed let it be known yesterday afternoon, that it's ready to start still one more round of easing to blunt the higher price of gasoline.”

Finally, recent remarks by President Barack Obama erased any doubt that the U.S. would allow Iran to develop nuclear weapons. There seems to be a sense that talks between both sides may ease tensions, Cramer said. It’s certainly helped slow the rise in oil prices, at least temporarily.

All things considered, Cramer is pleased policymakers around the world are “actually responsive to the needs of the marketplace.” He recommends taking some profits while buying domestic banks and domestic housing plays, so long as government leaders are taking such prudent action to combat the problems before them.

—CNBC.com and Reuters contributed to this report

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