Mad Money

Putting Consumer Confidence Into Perspective

Cramer on Tuesday offered what he thought was a reason for February’s precipitous drop in consumer confidence: President Barack Obama’s seemingly blind and continued push for massive health-care reforms, rather than passing a jobs-creation bill. It’s the reason the Dow had plummeted about 63 points in today’s trading session.

Sure, investors could look to Toyota Motor’s recall controversy, and its top executives' testimony on Capitol Hill. Or they could point to the government’s attack on the banks, especially Goldman Sachs and its poster boy for corporate excess, CEO Lloyd Blankfein. But Cramer thinks this is more about President Obama’s reaction to the Republican’s Senate in Massachusetts, where Scott Brown won the seat long held by Senator Ted Kennedy.

The result? The White House is in potential employers’ heads, making them balance the costs of increased health-care coverage for their employees and the hiring of new people. If anything, Cramer said, business owners now have more reason to fire than hire.

The plan then, the Mad Money host said, was to stick with the winners: Home Depot , which blew away the numbers today and boosted its dividend. Sales of big-ticket items contradicted that negative consumer confidence report, and the payout increase means that HD is doing well.

Investors should keep reports like Home Depot’s in mind, Cramer said, the next time we see a disappointing metric like consumer confidence. Whether it’s a similar economic data point or the health-care debate, HD and its outperforming peers tell the real story. 

Cramer's charitable trust owns Goldman Sachs and Home Depot.

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