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Cramer: Earnings mean nothing; stocks headed lower

Cramer: Earnings mean nothing. Stocks headed lower

Jim Cramer has a message for CEOs and shareholders about the market on Thursday; it doesn't matter how well a company is doing, or how much it beat estimates. Good news won't stop stocks from going down.

"With a few exceptions that are worth being constructive about, we have a first class bear market going and as I tell CEOs all the time, you need to stop taking the losses personally," the "Mad Money" host said.

Cramer thinks this market stinks, and it will keep sinking until it gets so low that the weak hands who keep expecting something better surrender their selling.

Positive action within companies simply won't have a notable impact on the market, so investors should stop being frustrated. Cramer went down the list of a few examples.

First are the horrendous problems of Volkswagen, which are spilling over to hurt all automakers. But what is bad for the goose is good for the gander, meaning every other auto company in the world could benefit.

We get reprieves but they are often sucker reprieves. One day they won't be. We have not reached that day yet, and we need to go still lower. So stay patient
Jim Cramer
Boeing Dreamliner 787
Source: Boeing

Just because Volkswagen has some serious problems on its hands does not mean that people will stop buying cars; it means they may stop buying Volkswagens, which is more business for every other company in the industry.

"It is nuts to think that people will stop buying cars because VW rigged the emissions tests. Yet, nobody cares right now. At some point they will, just not now," Cramer said. (Tweet this)

The second example Cramer cited was Boeing. Did anyone notice that it just won $38 billion in orders from various Chinese airlines for 300 planes? The aircrafts ordered were the most lucrative on Boeing's product line. But that did not impact the stock as it sank more than 1 percent on Thursday.

Another symptom that Cramer noted is that yield protection has also been thrown out the window. Many investors tend to rely on protection from yielding stocks. When a stock goes low enough, the rising dividend yield is supposed to be attractive enough to curb selling versus low-yielding bonds.

However Cramer saw that higher-yielding stocks have now ceased to protect investors from losses, which is another sign of a bear market.

"These stocks are no longer acting as bond market equivalents, and it's not due to fear of the Fed. It's because we fear falling stocks," Cramer added.

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The last positive sign that failed to excite investors were the companies that reported fantastic earnings. Companies like General Mills, ConAgra and Lennar knocked it out of the park. Cramer couldn't believe how great their earnings were, yet the stocks barely budged.

Ultimately, Cramer found that right now it does not matter how strong a company's results are because investors are selling the good with the bad.

"We get reprieves but they are often sucker reprieves. One day they won't be. We have not reached that day yet, and we need to go still lower. So, stay patient," Cramer said. (Tweet this)

Rationality will creep back into the market one day. That time just isn't now.

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