Cramer: Investors pouring money into stocks with international exposure

Sometimes it is hard for investors to see clearly what type of environment cultivates higher stock prices. With the averages headed higher on Tuesday, Jim Cramer went down the list of what makes this market so special right now.

"When you have the basics working for you, not against you, investors find reasons to throw money at the market. And right now it sticks on the stocks with the best international stories," the "Mad Money" host said.

The first positive sign Cramer pointed to was low inflation. Investors love low inflation, as that means the long-term value of stocks are going to be preserved. High inflation will erode value because earnings will have less purchasing power.

Money Counter, coins
Billy H.C. Kwok | Bloomberg | Getty Images
Money Counter, coins
"Investors find reasons to throw money at the market. And right now it sticks on the stocks with the best international stories" -Jim Cramer

The employment number on Friday signaled to Cramer that there was no inflation in the system besides mandated inflation that comes from higher state and local minimum wages.

"Tame inflation means that all stocks are worth more, so even if you hear that the stock market is expensive,it might not be as expensive as it seems given inflation isn't eroding the value of the gains you get from higher stock prices of future dividend payments down the road" Cramer said.

The next positive sign was that the bond market is no longer in competition with stocks, now that the Federal Reserve is likely to not raise interest rates. That means all stocks with good dividends will become a lot more attractive.

A weakening dollar also contributed to the positive environment. That means when U.S. based companies with international exposure report earnings, they translate into a lot more than when the dollar is strong. It will also allow for more competitive pricing versus overseas customers.

The fourth positive was higher oil prices, which signals a stronger global economy. Oil stocks carry a huge amount of weight in the market because there are so many of them. When the price of crude goes higher, they can sell oil for more money, which in turn allows them to pay back debts, which will trigger bank stocks to do better.

Ultimately the basic pieces of the puzzle were all in place for stocks to head higher on Tuesday. Cramer attributed the stocks with international exposure as the ones to watch.

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